U.S. GOVERNMENT PRINTING OFFICE

62–932 CC WASHINGTON : 2000

SALARY OF THE PRESIDENT OF THE UNITED

STATES

HEARING

BEFORE THE

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT,

INFORMATION, AND TECHNOLOGY

OF THE

COMMITTEE ON

GOVERNMENT REFORM

HOUSE OF REPRESENTATIVES

ONE HUNDRED SIXTH CONGRESS

FIRST SESSION

MAY 24, 1999

Serial No. 106–91

Printed for the use of the Committee on Government Reform

(

Available via the World Wide Web: http://www.gpo.gov/congress/house

http://www.house.gov/reform

(II)

COMMITTEE ON GOVERNMENT REFORM

DAN BURTON, Indiana, Chairman

BENJAMIN A. GILMAN, New York

CONSTANCE A. MORELLA, Maryland

CHRISTOPHER SHAYS, Connecticut

ILEANA ROS-LEHTINEN, Florida

JOHN M. MCHUGH, New York

STEPHEN HORN, California

JOHN L. MICA, Florida

THOMAS M. DAVIS, Virginia

DAVID M. MCINTOSH, Indiana

MARK E. SOUDER, Indiana

JOE SCARBOROUGH, Florida

STEVEN C. LATOURETTE, Ohio

MARSHALL ‘‘MARK’’ SANFORD, South

Carolina

BOB BARR, Georgia

DAN MILLER, Florida

ASA HUTCHINSON, Arkansas

LEE TERRY, Nebraska

JUDY BIGGERT, Illinois

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

JOHN T. DOOLITTLE, California

HELEN CHENOWETH, Idaho

HENRY A. WAXMAN, California

TOM LANTOS, California

ROBERT E. WISE, JR., West Virginia

MAJOR R. OWENS, New York

EDOLPHUS TOWNS, New York

PAUL E. KANJORSKI, Pennsylvania

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

ELEANOR HOLMES NORTON, Washington,

DC

CHAKA FATTAH, Pennsylvania

ELIJAH E. CUMMINGS, Maryland

DENNIS J. KUCINICH, Ohio

ROD R. BLAGOJEVICH, Illinois

DANNY K. DAVIS, Illinois

JOHN F. TIERNEY, Massachusetts

JIM TURNER, Texas

THOMAS H. ALLEN, Maine

HAROLD E. FORD, JR., Tennessee

JANICE D. SCHAKOWSKY, Illinois

———

BERNARD SANDERS, Vermont

(Independent)

KEVIN BINGER, Staff Director

DANIEL R. MOLL, Deputy Staff Director

DAVID A. KASS, Deputy Counsel and Parliamentarian

CARLA J. MARTIN, Chief Clerk

PHIL SCHILIRO, Minority Staff Director

SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY

STEPHEN HORN, California, Chairman

JUDY BIGGERT, Illinois

THOMAS M. DAVIS, Virginia

GREG WALDEN, Oregon

DOUG OSE, California

PAUL RYAN, Wisconsin

JIM TURNER, Texas

PAUL E. KANJORSKI, Pennsylvania

MAJOR R. OWENS, New York

PATSY T. MINK, Hawaii

CAROLYN B. MALONEY, New York

EX OFFICIO

DAN BURTON, Indiana HENRY A. WAXMAN, California

J. RUSSELL GEORGE, Staff Director and Chief Counsel

BONNIE HEALD, Director of Communications

MASON ALINGER, Clerk

FAITH WEISS, Minority Counsel

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C O N T E N T S

Page

Hearing held on May 24, 1999 ............................................................................... 1

Statement of:

Ferracone, Robin, chair, Executive Compensation Advisory Board, American Compensation Association; Jane Weizmann, consultant, Watson

Wyatt Worldwide; and David Hofrichter, vice president and managing

director, Hay Group ...................................................................................... 105

Gressle, Sharon, specialist, American National Government, Congressional Research Services; Gary Ruskin, executive director, Congressional Accountability Project; Paul Light, director, Center for Public

Service, the Brookings Institution; and Donald Simon, acting president,

Common Cause ............................................................................................. 55

Jones, Ambassador James R., counsel, Manatt, Phelps & Philips, former

Special Assistant to President Johnson; General Alexander Haig, chairman, Worldwide Associates, former Chief of Staff to President Nixon;

Robert T. Hartmann, former Counsel to President Ford; Kenneth

Duberstein, chairman, the Duberstein Group, former Chief of Staff

to President Reagan; Governor John H. Sununu, president, JHS Associates, former Chief of Staff to President Bush; Samuel Skinner, cochair, Hopkins & Sutter, former Chief of Staff to President Bush;

and Thomas F. ‘‘Mack’’ McLarty III, chairman, McLarty International,

former Chief of Staff to President Clinton .................................................. 7

Letters, statements, et cetera, submitted for the record by:

Duberstein, Kenneth, chairman, the Duberstein Group, former Chief of

Staff to President Reagan, prepared statement of ..................................... 26

Ferracone, Robin, chair, Executive Compensation Advisory Board, American Compensation Association, prepared statement of ............................ 107

Gressle, Sharon, specialist, American National Government, Congressional Research Services, prepared statement of ....................................... 58

Haig, General Alexander, chairman, Worldwide Associates, former Chief

of Staff to President Nixon, prepared statement of ................................... 11

Hartmann, Robert T., former Counsel to President Ford, prepared statement of ........................................................................................................... 22

Hofrichter, David, vice president and managing director, Hay Group,

prepared statement of ................................................................................... 124

Horn, Hon. Stephen, a Representative in Congress from the State of

California:

History of presidential pay ....................................................................... 144

Letter dated May 21, 1999 ....................................................................... 139

Letter dated May 24, 1999 ....................................................................... 134

Memo dated April 21, 1999 ...................................................................... 136

Prepared statement of ............................................................................... 3

Prepared statement of James F. Vivian .................................................. 151

Light, Paul, director, Center for Public Service, the Brookings Institution,

prepared statement of ................................................................................... 71

McLarty, Thomas F. ‘‘Mack’’ III, chairman, McLarty International, former

Chief of Staff to President Clinton, prepared statement of ....................... 41

Ruskin, Gary, executive director, Congressional Accountability Project,

prepared statement of ................................................................................... 64

Simon, Donald, acting president, Common Cause, prepared statement

of ..................................................................................................................... 77

Skinner, Samuel, co-chair, Hopkins & Sutter, former Chief of Staff to

President Bush, prepared statement of ...................................................... 34

Sununu, Governor John H., president, JHS Associates, former Chief of

Staff to President Bush, prepared statement of ......................................... 30

Page

IV

Letters, statements, et cetera, submitted for the record by—Continued

Weizmann, Jane, consultant, Watson Wyatt Worldwide, prepared statement of ........................................................................................................... 116

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SALARY OF THE PRESIDENT OF THE UNITED

STATES

MONDAY, MAY 24, 1999

HOUSE OF REPRESENTATIVES, SUBCOMMITTEE ON GOVERNMENT MANAGEMENT, INFORMATION, AND TECHNOLOGY, COMMITTEE ON GOVERNMENT REFORM, Washington, DC.

The subcommittee met, pursuant to notice, at 1:30 p.m., in room 2154, Rayburn House Office Building, Hon. Stephen Horn (chairman of the subcommittee) presiding. Present: Representatives Horn, Turner, and Kanjorski.

Staff present: Russell George, staff director/chief counsel; Mat- thew Ebert, policy advisor; Bonnie Heald, director of communications; Faith Weiss, minority counsel; Ellen Rayner, minority chief

clerk; and Earley Green, minority staff assistant.

Mr. HORN. A quorum being present, this hearing of the Sub- committee on Government Management, Information, and Technology will come to order.

Thirty years ago, the salary of the President of the United States

was set at its current level of $200,000 a year. I’m sure that to

most Americans a salary of that amount seems like a lot of money.

It is. However, it is pay for one of the most difficult, demanding

and important jobs on the face of the Earth.

The President’s salary, unchanged in 3 decades, serves as a ceiling for almost every other salary in the Federal Government. I said

‘‘almost’’ every other salary because, as will be discussed during

this hearing, it could soon be surpassed by a limited number of

government officials.

This hearing is not about whether President Clinton should get

a pay raise. The Constitution prohibits Presidential pay changes

until the end of the current President’s term in office.

Article II, Section 1 of the Constitution states:

The President shall, at stated Times, receive for his Services, a Compensation,

which shall neither be increased nor diminished during the Period for which he

shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.

In other words, the President’s salary cannot be changed during

his term in office. The effect of that prohibition is that if no action

is taken before the next President is sworn into office, he or she

could be paid less than the Vice President.

Vice President Gore as well as the Chief Justice of the United

States and the Speaker of the House currently earn $175,400 a

year. These officials also receive cost-of-living adjustments to their

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salaries. As we will hear today, the Vice President, the Chief Justice and the Speaker of the House could earn each more than the

President before the next Presidential term ends in 2005.

When President George Washington took office in the year 1789,

the salary of the President was established at $25,000 a year. At

that time, Vice President John Adams earned $5,000 a year, Chief

Justice John Jay earned $4,000 a year, and members of the President’s Cabinet made $3,500 a year.

According to computations made by the Congressional Research

Service, by one measure President Washington’s $25,000 salary

equates to more than $4.5 million today. Now a number of the witnesses have made that calculation, and I was reminded of President Truman’s great comment that I want a one-armed economist

here because they’re always saying on the one hand or the other

hand, and he was tired of listening to it. And we have several figures in the record today. But, in any case, we know that it was

substantial; and $4.5 million is certainly a significant figure.

On May 14th, the House Appropriations Subcommittee on Treasury, Postal Service and General Government included a provision

in the Treasury appropriations bill that would increase the President’s salary to $400,000, effective January 20, 2001. The full Committee on Appropriations is expected to act on this recommendation

shortly.

And at today’s hearing we will hear from the most distinguished

assortment of witnesses who will testify about whether the President’s salary should be changed.

Before I introduce the first panel, I’ll yield to the ranking member, Mr. Turner of Texas, for an opening statement. Mr. Turner.

[The prepared statement of Hon. Stephen Horn follows:]

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Mr. TURNER. Thank you, Mr. Chairman.

It’s interesting to note that when Babe Ruth was asked in the

early 1930’s how in the world he could ask for a higher salary than

President Hoover’s, he replied, ‘‘I had a better year than he did.’’

And of course that was true because Babe Ruth had 46 home runs

in 1929 and Hoover presided over the crash of the stock market.

I guess that’s a humorous example of problems inherent in trying

to compare private sector pay with the President’s salary. Clearly,

the factors considered while negotiating salary with baseball players differ significantly from those considered setting the President’s. But, nonetheless, it is true that the salaries of typical chief

executive officers in this country are increasing rapidly, while the

salary of our President remains static.

People enter public service, of course, for reasons other than financial compensation, as all of us understand. Clearly individuals

with qualifications and contacts to be elected as President could

garner extremely high salaries in the competitive business market,

yet they choose not to do so.

Presidents run for office because they believe in making a difference and improving the lives of American citizens. In fact, President George Washington announced that he would forego his constitutional compensation, declaring that his sense of duty required

him to serve the country without pay. Congress didn’t allow him

to do so, however, and passed a statute setting his pay at $25,000

per year.

John Page of Virginia stated at the time that the Constitution requires that the President shall receive compensation, and it’s our

duty to provide it. The constitutional intent is to assure the financial independence of the President so that he would not be impoverished and not be susceptible to corruption which might jeopardize

the public interest.

Alexander Hamilton noted in the Federalist Papers, ‘‘Power over

a man’s support is power over his will.’’ The restriction against increasing the President’s salary during an administration ensures

that the Congress cannot influence the President by appealing to

his avarice. Certainly the past concerns of our Founding Fathers

remain true today, and the question of whether the current level

of salary would likely make the President susceptible to corrupt influences should be explored.

The prospect of the Vice President’s salary overtaking that of the

President will also be discussed, and there is reason to learn the

lessons of history on this point as well. While the Constitution said

nothing about the Vice President’s salary, it did create the office;

and the first Congress made it clear that some compensation was

necessary. Fisher Ames, one of the first Members of Congress, suggested that if competent support is not allowed for the Vice President, the choice will be confined to opulent characters. This is an

aristocratic idea and contravenes, I think, the spirit of the Constitution.

When a House committee proposed paying the Vice President

$5,000 a year, John White of Virginia objected to the princely sum;

and Representative Page responded that he would never have created the Office of the Vice President, but since we’ve got him, he

said, we must maintain him.

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From these comments we can draw two additional important conclusions. First, the salary provided to the President and the Vice

President, indeed to all high-level Federal officials, should be adequate to maintain qualified individuals; and, second, the salary

should allow for those who are not independently wealthy to serve

in these positions.

I think these two simple principles should guide us in our consideration of the President’s compensation: the assurance that a President’s financial condition will not make him or her susceptible to

corruption, and the allowance for those who are qualified and not

independently wealthy to hold office if so elected or appointed.

Having said that, I look forward, Mr. Chairman, to the distinguished panel that you have gathered here before us today.

Mr. HORN. I thank the gentleman.

And let me just note the way the procedure will follow. The witnesses have been arranged so that the earliest, shall we say, of the

group in the Johnson administration would be the first witness,

and the last in the group will be the current administration. I will

do an introduction on each one of you before you speak.

This is an investigating subcommittee of the full Committee on

Government Reform, and our tradition is to swear in all witnesses.

So you’ve taken the oath many times. And if you all will stand we’ll

swear you in and then begin.

[Witnesses affirmed.]

Mr. HORN. The clerk will note that all the witnesses have affirmed the oath.

We will begin with the first witness, from the Johnson administration, Ambassador James R. Jones.

Now, when I introduce you, your full statement is automatically

part of the record and any attachments you want to add to it. And

then we’d like to have mostly a dialog when you’re all done. And

if you would like to summarize, we would not be offended by that.

Ambassador Jones a number of us have known for 30 years. He

was a Member of Congress. And I remember when I was in Education he did a wonderful job to help get the budget moving for

higher education in this country. And he began his career at the

White House, which was very unusual. Usually, it’s a more senior

person that begins the career there, after they’re 30 or 40 or 50.

He graduated from law school and then became staff assistant to

President Lyndon Johnson. At the age of 28, he was appointed Special Assistant and Appointment Secretary to the President. He was

the youngest person to ever hold that post.

After leaving the White House, he represented his Oklahoma

congressional district for 7 terms in the House of Representatives.

While a Member of the House, he served as chairman of the Budget Committee and a member of the Ways and Means Committee,

the most prestigious committee in the House, and the one that goes

back the furthest in our constitutional history.

He was then appointed Ambassador to Mexico in 1993 and during his 4-year Ambassadorship Mexico faced serious economic crisis

with the devaluation of the peso and other economic challenges involving implementation of the North Atlantic Fair Trade Agreement, otherwise known as NAFTA.

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The Ambassador has been honored by both the United States

and the Mexican Governments for his leadership. We welcome you,

Mr. Ambassador, to what was once your home here; and we look

forward to your testimony.

STATEMENTS OF AMBASSADOR JAMES R. JONES, COUNSEL,

MANATT, PHELPS & PHILIPS, FORMER SPECIAL ASSISTANT

TO PRESIDENT JOHNSON; GENERAL ALEXANDER HAIG,

CHAIRMAN, WORLDWIDE ASSOCIATES, FORMER CHIEF OF

STAFF TO PRESIDENT NIXON; ROBERT T. HARTMANN,

FORMER COUNSEL TO PRESIDENT FORD; KENNETH

DUBERSTEIN, CHAIRMAN, THE DUBERSTEIN GROUP,

FORMER CHIEF OF STAFF TO PRESIDENT REAGAN; GOVERNOR JOHN H. SUNUNU, PRESIDENT, JHS ASSOCIATES,

FORMER CHIEF OF STAFF TO PRESIDENT BUSH; SAMUEL

SKINNER, CO-CHAIR, HOPKINS & SUTTER, FORMER CHIEF

OF STAFF TO PRESIDENT BUSH; AND THOMAS F. ‘‘MACK’’

MCLARTY III, CHAIRMAN, MCLARTY INTERNATIONAL,

FORMER CHIEF OF STAFF TO PRESIDENT CLINTON

Mr. JONES. Thank you very much, Mr. Chairman, members of

the committee, for giving me an opportunity to testify.

In brief, let me just state that the proposal to double the President’s salary to $400,000 is something I totally support. I will tell

you that in my 14 years in Congress, this is the first time I’ve had

to take the oath to testify in that pay raise proposal. But I do believe it’s a great favor to do so.

Basically, there are two or three reasons why I think the committee and the Congress should move rapidly and approve this proposal. The last budget of the Johnson administration, 31 years ago,

was the last time the President received a pay raise. This took effect the first year of President Nixon’s administration. And it is

high time after 30 years that it be revisited for a number of reasons.

No. 1 is the symbolism of the respect we have for that office.

Having been in the private sector now for several years since leaving the Congress, I can tell you that the President’s salary would

rank at about mid-level management of an average company in the

United States; and if you raised it to $400,000, it would be about

equivalent to the CEO’s salary of a mid-level company in the

United States.

Now, as was said by Mr. Turner, people don’t go into public service for the salary, for the wages, the benefits; you go in to serve.

But the fact of the matter is, in this country, particularly with

business having such a dominant part in our lives, people do respect or not respect an office based upon what we consider that office’s worth to the person who holds it.

Second, there are expenses incurred when you’re President; and

those expenses are both the living in the White House, in addition

to what is provided to the President, but also in maintaining your

outside commitments, whether that be a personal home or payments for education, all the things that go with the normal family.

Presidents have those expenses, and even if most Presidents can

fully afford to pay them themselves, there ought to be some recVerDate 11-MAY-2000 07:09 Jul 21, 2000 Jkt 000000 PO 00000 Frm 00011 Fmt 6633 Sfmt 6633 C:\DOCS\62932.TXT HGOVREF1 PsN: HGOVREF1
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ognition that those who cannot should be able to be President and

meet their expenses.

The final reason that I think is very important is the effect that

the President’s salary has on other incomes. I have served as a

Member of Congress, as you say. As an ambassador and as a Member of Congress virtually every year, every month. We breathed a

sigh of relief when my wife and I made it over the line, were able

to educate our kids, et cetera, without having to borrow a lot of

money, et cetera.

Before being an ambassador, I had had time in the private sector

and was able to afford the costs that most Ambassadors pay from

their personal resources to meet the regular expenses of running

an embassy and representing the United States. I think that’s

clearly true of most people in public office. And if the President’s

salary is not raised, as was pointed out in your opening remarks,

other incomes of high-level officials in our Federal Government will

start bumping up or exceeding the President’s salary, and there

will be no opportunity for another 4 years to raise that and to raise

the other salaries.

I personally think that if you took the salaries of all Federal officials from the President throughout, and including Members of

Congress, at the time the salaries were established and brought

them forward with nothing more than cost-of-living adjustments,

also adjusting for times of depression when you have a depreciation, everyone in the Federal Government would be substantially

underpaid on that particular scale.

So, I think the effect on the salaries of other Federal officials of

holding the line of the President’s salary is terribly important, because we do want to attract the most competent, the best people

we can to public service. And when these public servants have to

support sometimes two homes, et cetera, and all the expenses of

living, you need to pay those competent people what they’re worth.

Mr. HORN. I thank you very much, Ambassador.

We will now introduce General Alexander M. Haig, Jr., a very

long and distinguished career that most Americans know about. He

served more than 3 decades in the U.S. Army and rose to be a four

star General. That included tours in Japan, Korea, Europe, and

Vietnam, highly decorated for all of the posts he held in the military.

And in 1969 he was assigned to the staff of Dr. Henry Kissinger,

then the assistant to the President for national security affairs in

the Nixon administration. During that tenure in the White House,

General Haig made about 14 trips to Southeast Asia on behalf of

the President to negotiate the Vietnam cease-fire and the return of

United States prisoners of war.

He resigned from the military service when President Nixon appointed him White House Chief of Staff. General Haig remained in

that position until 1974 when President Ford recalled him to active

duty as Commander in Chief of the United States European Command and later as Supreme Allied Commander in Europe.

Two years after he retired from the Army, General Haig became

the Nation’s 59th Secretary of State in the Cabinet of President

Ronald Reagan.

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Mr. HORN. We welcome you, General. We look forward to your

testimony.

General HAIG. Thank you very much, Chairman Horn. I want to

compliment the subcommittee for holding these very timely sessions which I think are overdue. I hope they will result in action.

The only complaint I have is you should put me in the first chair

because I sat alongside General Douglas MacArthur during his

telecon discussions with President Harry Truman at the time of the

North Korean invasion of South Korea. So I go back through eight

Presidents, seven of whom I served fairly closely, four at intimate

range. The most learning experience I got with President Nixon,

during 18 months of Watergate.

I also served with Bob Hartmann here during the transition of

President Ford. I served President Kennedy as a member of his

Cuban Coordinating Committee, where a lot of nefarious actions

took place that they are only recently being written about. I also

served as Pentagon liaison to the Johnson administration and

knew President Johnson well and admired him greatly.

Beyond that, as NATO Commander, President Ford and, of

course, President Carter, and I met almost monthly. So I think I

knew some of the Presidential travails. And finally, I served as

Secretary of State for President Reagan.

All of these gentlemen testifying today bear scar tissue, but I

think I have the largest load of it. And, having said that, I heartily

endorse everything Ambassador Jones has said. I’m not going to repeat any of the points he made.

I will say that I think today the Presidency is more unique, more

challenging and more complex than it has ever been historically;

and, in that context, what I mean to say is that Presidents are

learning these complexities. They don’t have the luxury of choosing

between foreign affairs and domestic affairs in the conduct of their

office. As the last two Presidents have learned you have got to deal

with both foreign affairs and domestic affairs simultaneously, and

you can’t succeed in one if you fail in the other.

So that’s a reality which has added to the complication in a new

world in which globalization is the native of this world.

Second is the impact of the explosion of information sciences on

the institution of the Presidency. Today, the President lives in a

world of real time. Whether it be video or voice, people demand answers almost instantaneously to every national crisis that develops

or any international crisis that develops.

Needless to say this has not had what I call a complimentary impact on the institution of the Presidency. It means that todays

President has got to proceed almost immediately to make decisions

on things that should be thought about for weeks, if not months;

and it leads to what I call miscalculations and misjudgments by

our chief executive.

Also, I think it has developed a new character to the Office of the

Presidency. It has produced the modern populist, the fellow that

has to run his office with his finger to the wind, rather than

bequided by the principles and values which he brought with him

into the job.

Now, having said all that, I can tell you, as a former chief executive or chief operating officer of one of our Fortune 500 multiVerDate 11-MAY-2000 07:09 Jul 21, 2000 Jkt 000000 PO 00000 Frm 00013 Fmt 6633 Sfmt 6633 C:\DOCS\62932.TXT HGOVREF1 PsN: HGOVREF1
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national companies, that government pay is very, very poor. Also

today the thought of a Vice President or Chief Justice or someone

else in the government exceeding in pay the President of the

United States is just simply unacceptable.

To give you an idea of poor pay in government service—when I

was with United Technologies Corp., left command of—5 million active and reserve troops in Europe, I received a 20-fold pay increase

in moving from four star General to Chief Operating Officer of

United Technologies Corp. Had I stayed with that job and been

successful, today I would be being paid over $3.5 million in annual

salary with hundreds of millions of dollars in stock options, to say

nothing of a retirement pay built on about $20 million of interestproducing revenue which is guaranteed and insured.

However, we know we can’t pay Presidents in accordance with

their unique job requirements. There is no tougher job in the world

than the Presidency of the United States. He is not just head of

state, he is also head of government. So both operations and also

presentation of values and heritage are all mingled into one job. If

you fail, you fail. You are the one that’s held responsible. When

Truman said the buck stops here, he wasn’t off the mark.

I don’t think we can match what private sector presidents earn.

We know Presidents don’t seek the job because of the emoluments

that it brings. But I do think we have to guarantee the dignity of

the individual. And that means his clothing, his family monetary

requirements, the education of his children if he has them; and,

above all, we shouldn’t put in jeopardy what assets the Presidents

bring to the office.

I served one President who left $400,000 in debt having to pay

the legal fees that sometimes develop during the modern Presidency. So I think we have got to move and move promptly. In that

sense I would strongly recommend that we go even above the Appropriations Committee recommended salary to a level of $500,000,

which is very low compared to comparable commercial salaries.

If this committee believes that it would be quicker and a bipartisan consensus could be developed and it would be more efficiently

done, than $400,000 is better than nothing.

I also believe that the legislature, the Congress has got to look

at the President’s retirement pay, which is also less by a large

measure than what it should be.

And, finally, I would suggest that these benefits or allowances be

reviewed in the third term of every Presidency to be sure that pay

is keeping pace with the dynamics of our economy. That’s my feeling, Mr. Chairman.

Mr. HORN. Thank you very much, General.

[The prepared statement of General Haig follows:]

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Mr. HORN. We now move to Mr. Robert T. Hartmann, highly acclaimed reporter and writer before his 1974 appointment by President Gerald Ford as counselor to the President.

During his tenure in the Cabinet-level position, Mr. Hartmann

participated in White House policymaking sessions, accompanied

the President on numerous campaign trips and visits to Europe,

the Far East and Soviet Union. In addition, Mr. Hartmann oversaw

the research and correspondence writing staffs at the White House,

personally drafted and edited most of President Ford’s statements

and speeches.

Before joining the President’s staff, Mr. Hartmann spent more

than 2 decades as a journalist for the Los Angeles Times; and he

was the Washington Bureau head here in the late 1950’s and

1960’s. Before he became the Times Washington Bureau Chief, he

covered Congress and the White House, later established the newspaper’s Mediterranean and Middle East Bureau in Rome, Italy; and

throughout his career in journalism Mr. Hartmann has received

numerous honors for his reporting and writing.

We’re glad to welcome you today, Mr. Hartmann.

Mr. HARTMANN. Thank you, Mr. Chairman, members of the committee.

Although President Ford’s term as President was one of the

shortest in our history, I hope to approach the subject from a somewhat broader perspective than that of the White House I spent a

great deal of time covering the Hill and working on the Hill when

he was the minority leader of the Congress of the House.

When I arrived in Washington the year was 1954. It was sort of

a general understanding that I was going to be paid about the

same as a Member of Congress. At that time, this sum was $2,500.

President Eisenhower got $100,000. The Chief Justice, former California Governor Earl Warren got $35,500; and Vice President

Nixon, also a Californian, was cut $500 and got $35,000 even. I expect that annoyed him quite a bit.

I detail all this to make the point that’s already been made, that

Federal salaries, in Washington particularly, depend on the President’s pay. The President’s pay helps set the benchmarks for almost everybody else in town.

A dozen years after I got here to serve as chief of the Los Angeles

Times Washington Bureau, I went to work for Gerry Ford, who had

just been elected House minority leader; he and a group of relatively young, Republican Congressmen hoped to create a new,

more vigorous and more progressive image for their party than had

been represented by Charlie Halleck and Ev Dirksen, who appeared on television every week to conduct ‘‘The Ev and Charlie

Show,’’ as it was called.

Now, Ford had just succeeded Halleck, and was waging an uphill

battle trying to get equal time with Dirksen, which wasn’t easy. I

didn’t volunteer to offer to help win that one. But we did shift the

battlefield by challenging President Johnson himself at every opportunity. We even demanded equal time from the networks to put

on our reply or rebuttal to the President’s annual State of the

Union message.

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I must add that I was in no way responsible for the public’s

prompt abbreviation of our constructive Republican alternative proposals.

Now, a few thoughts about how we should pay our Presidents.

Some of them have already been uttered, but I can’t revise my

script now.

First, you can never match the President’s salary, to the depth

and degree of responsibility that he carries in that job. It is a totally consuming responsibility without any equal of which I’m

aware and of a magnitude which can be appreciated only by another President.

Second, the compensations of the office are considerable, but

money is really only a minor one of them. Power, perks, pensions,

protection and a place in history loom much larger in most Presidents’ minds.

As the minority leader in the House, Congressman Ford was debating Vice President Hubert Humphrey before the Gridiron Club’s

annual dinner, and he assured Humphrey that he had absolutely

no designs on the Vice Presidency. Nevertheless, Ford admitted,

every evening as he drove by the White House on his way home,

he heard a small voice saying, ‘‘If you lived here, you’d be home

now.’’

I expect he’s still using that joke.

In 1969, after the President had remained at $100,000 for 2 decades, Congress doubled that sum to $200,000 and fixed its own pay

at $42,500. This gave me a welcome $6,500 raise as an assistant

here on the Hill, and it also raised almost everybody else’s.

Now, after 30 years, you are considering doubling this to

$400,000 because the salaries of other Federal officials not limited

by the Constitution are pushing upward on the chief executive’s.

I won’t say that public servants—as we love to style ourselves—

are poorly paid or that their pensions are miserly. As Richard

Nixon was wont to say, that would not be right. But the question

before you today is not primarily about the next President’s pay;

it is about everybody’s pay who works for the government. If I may

paraphrase a wise old paraphrase, we have seen the government,

and it is us.

Thank you, Mr. Chairman, and members of the committee.

Mr. HORN. Thank you very much. We appreciate your comments.

[The prepared statement of Mr. Hartmann follows:]

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Mr. HORN. Our next representative is well known in Washington.

Mr. Kenneth M. Duberstein is chairman and chief executive of the

Duberstein Group, and he served as chief of staff to President Ronald Reagan. Since then, I might say, he’s regarded as one of the

most effective advocates on Capitol Hill. So he learned a lot, and

he brings a great deal of experience to this particular panel.

Prior to assuming the post in 1987, Mr. Duberstein had served

as an advisor to the President on legislative affairs. Although he

came from the private sector, he was no stranger to public service;

and from 1972 to 1976 he held the position of Director of Congressional Intergovernmental Affairs for the General Services Administration, later served as Deputy Under Secretary of Labor during

the Ford administration. He was awarded the President’s Citizen

Medal by President Reagan in 1989.

And as well as presiding over his Washington-based consulting

firm, he’s a member of the Council on Foreign Affairs and Foreign

Relations and serves on the Board of Governors of the American

Stock Exchange and vice chairman of the Kennedy Center for the

Performing Arts, one of the great centers of performing arts in our

Nation.

Mr. HORN. We’re glad to welcome you back and look forward to

your testimony, Mr. Duberstein.

Mr. DUBERSTEIN. Thank you, Chairman Horn, Congressman

Turner. It’s a pleasure to be here; and it’s a privilege to be on this

panel with so many distinguished colleagues, all of whom were taller, much taller before each served as a White House Chief of Staff.

I am pleased to testify today strongly in favor of a long-overdue

substantial salary increase to $400,000 for the next President of

the United States. This is not even a close call, Mr. Chairman. This

needs to be addressed now. It is a case of simple equity. This is

not about a President, this is about the Presidency. This is about

the compensation of the leader of the free world, not about the salary of the chief of a not-very-well-run small startup company or the

head of a Third World country.

This is about our chief executive officer, not the retired chairman

of the board who has been put out to pasture. This is about the

stature and prestige of the leader of the government of the United

States and the person charged with truly awesome responsibilities,

here at home and throughout the world.

To put this in some perspective, the salary of the President of the

United States has not been increased since those long-ago days

when the Dow Jones average was below $1,000, Neil Armstrong

had not yet walked on the moon, the ‘‘Amazin’’ Mets hadn’t won

their first World Series, Strom Thurmond was a mere child of 66,

Charles DeGaulle was President of France, and Golda Meir was

the Prime Minister of Israel.

It was the age of Aquarius, before Woodstock, before the

Concorde’s maiden flight, and construction of Walt Disney World in

Orlando, FL. It was a much easier time before C–SPAN, cable TV,

the Internet, and 24 continuous news cycles.

No one should run for the Presidency for the money. But it deserves remuneration well beyond public housing, public transportation, and maid service.

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Keeping up with the inflation alone since 1969 should result in

a sizable pay increase. I support strongly, Mr. Chairman, the proposal for a $400,000 salary for the President.

I am concerned, as other members of the panel have stated as

well, with the pay compression for senior executive service personnel as well as for the Vice President, the Chief Justice, and others.

I hope this committee and the Congress will move expeditiously

to increase the salary of the Presidency beginning in January 2001.

Thank you very much.

Mr. HORN. Thank you. Appreciate your testimony.

[The prepared statement of Mr. Duberstein follows:]

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Mr. HORN. Our next speaker is probably fairly widely known

across the country. That’s Governor John H. Sununu, former Governor of New Hampshire. He served as Chief of Staff to President

George Bush from 1989 to 1991. In his high-level advisory position,

he oversaw the daily operations of the White House and its staff.

He also served as Counselor to the President, remains a member

of the Board of Trustees for the George Bush Presidential Library

Foundation.

Before joining the President’s staff, Governor Sununu served

three consecutive terms as New Hampshire’s 93rd Governor. He

gained regional and national recognition as chairman of the Coalition of Northeastern Governors, chairman of the Republican Governors Association, and chairman of the National Governors Association.

From 1968 until 1973, the Governor, who holds a doctorate degree in mechanical engineering from probably our leading institution of science and engineering, the Massachusetts Institute of

Technology, served as Associate Dean of the College of Engineering

at Tufts and Associate Professor of Mechanical Engineering. So he’s

had experience in the academic world which some would say is

tougher than the political world because they never forget.

But he took the easy route. He elected himself three times as

Governor of New Hampshire; and he follows in a great tradition of

one Sherman Adams, who was also a great Governor of New

Hampshire and Chief of Staff to President Eisenhower.

Welcome, Governor Sununu.

Mr. SUNUNU. Thank you very much Chairman Horn, Mr. Turner.

I, too, appreciate this opportunity to talk about an issue that I do

believe is a very significant one. I have no disagreement with any

of the comments made by my colleagues on the panel. I just want

to emphasize a couple of points and then make one what I hope

is an additional point for your consideration.

Mr. Chairman, the $4.5 million that the $25,000 salary that

George Washington received in 1789 represents merely a 2.5 percent inflation rate on an annual basis, and as we look around at

historic inflation rates we realize that we are patting ourselves on

the back when we keep it that low. So it is an underestimate of

what that might have been scaled up to if it had continued to be

scaled in a fair way.

I think it’s important to recognize, though, that the issue before

you, if we look at it in economic terms, we would come with these

huge salaries. But you are sensitive, as I think all of us here on

the panel have to be sensitive, to the fact that we are talking about

a political issue; and, therefore, I believe that you will be forced

and, in fact, will have to examine the level of this salary in the context of what is politically acceptable to the public of the United

States at this time.

And, therefore, in the paper I presented as my prepared remarks,

I had a number of—which was selected before you focused on the

$400,000. I suggested a number of $500,000. But I can wholeheartedly endorse the $400,000 that you are examining as a specific increase.

But the second point I would like to make is that I do suggest

that one of the problems—we have reached this position of a lack

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of equity is that the review in the change of the salary of the President of the United States has incurred, in fact, too infrequently;

and, therefore, I would recommend to the committee that they seek

a way to establish in law a statutory review period which would

require the Congress not to raise the salary on a periodic basis but

to review the salary for the possibility of raising it on a periodic

basis. And I would suggest that a statutory obligation of an 8- or

12-year period be established for that review.

I would suggest that with the obligation of review on that periodic basis and what we would hope would be a series of enlightened Congresses that would follow that over a period of time a salary that is politically acceptable would begin to approach one that

is economically appropriate for this, which is arguably the position

of responsibility which deserves probably the highest salary of anyone in the world.

It is, I think, that mechanism which I present for your consideration which could begin to alleviate the historic disparity that

seems to exist in the salary of the President and comparable levels

of responsibility around the world.

Thank you very much, Mr. Chairman.

Mr. HORN. Thank you.

[The prepared statement of Mr. Sununu follows:]

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Mr. HORN. Our next panelist is Mr. Samuel K. Skinner, who

served President George Bush both as the President’s Chief of Staff

and the Secretary of Transportation. As a Senior Aide to the President, Mr. Skinner coordinated the President’s activities and managed the White House staff.

During his service in the President’s Cabinet, Mr. Skinner was

responsible for overseeing the Department of Transportation’s $30

billion budget and 105,000 employees. He’s been credited with numerous successes in transportation policy, including the development of the President’s national transportation policy and passage

of the landmark aviation and surface transportation legislation.

Mr. Skinner also developed the administration’s open skies policy, which liberalized the Nation’s international aviation policy and

significantly increased the number of international flights to and

from the United States.

We welcome you, Mr. Skinner; and we look forward to your testimony.

Mr. SKINNER. Thank you, Mr. Chairman, Congressman Turner.

I’m delighted to be here as one of the latest to serve as Chief of

Staff to the President. I also think I can bring a little different perspective to this discussion because, while I agree with what everybody has said, I have had the opportunity to be in and out of government on several occasions.

In 1968, as a salesman at IBM making $50,000 a year I left to

join public service for $7,500 a year with a wife and three children.

Some would say that was foolish, but it was clearly one of the best

things I ever did in my life.

I think any comparison of corporate salaries or private sector income to the salary of the President of the United States is basically

irrelevant. You don’t do it for the money. The benefits and the rewards that you get go well beyond that. While there is great disparities, I think there will continue to be disparities.

I do, however, think that the standard that we have to set deals

with basically two factors. No. 1, we should not have a salary that

is so low that people who are serving in government who have not

had the opportunity to go in and out of government will not be able

to serve as President or offer themselves as a candidate for President because they have no money and it is impossible to meet the

requirements absent compromising one’s integrity or going without.

I have a 3 year old and a 5 year old. I can afford to educate those

children because my wife and I both work. Most people in government today, many of them in this room and others come from a

family where both couples work. It’s very hard for the spouse of a

President to work. So if you take those two incomes together, we

may actually require a family to take a cut from current salaries

and compensation to serve as President if they don’t have independent income.

A President needs to educate his children or her children. To put

money away for education today is no small challenge unless you

have independent wealth.

In Illinois as I left today, the schools in Illinois—and President

Horn would be familiar with this—they all announced they were

raising their tuition in the State by about 5 percent, and one raised

the tuition 15 percent. Tuition is increasing at a rate greater than

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the rate of inflation, and our President should have the right and

the ability to at least send his children to college with some assistance as well.

And, finally, we should avoid the appearance of impropriety. And

the idea that a President should have to accept gratuities or put

himself or herself in a situation where they have to take dresses

or gifts or suits or ties or free tuition or anything like that to make

ends meet is not what we want the President to find themselves

in that situation. He must meet—he or she must meet basic individual needs, personal living expenses, and they’re greater than

normal Americans.

And, No. 2, he should be able or she should be able to conduct

themselves in their office without worrying every moment about

how they’re going to meet basic financial needs.

And, finally, obviously when you raise the President’s salary

every 30 years, unless we’re going to change the mechanism as

Governor Sununu suggested, which I think is worthy of serious

consideration, you have got to bump it up at a level sufficient

enough so what we don’t find ourselves in the same situation without any kind of remedy 5 years from now.

What that amount is, is somewhat controversial. I have been

conducting my own independent poll the last several days. And

while I don’t live my life by polls, I asked—I read my remarks to

my wife, and I suggested $500,000 to my wife, and she reminded

me that that was a substantial amount of money, that a lot of

other people weren’t making that money and that, you know, that

it might not be acceptable, politically, or practical.

I then had the opportunity to fly last week—this weekend with

a distinguished public servant who will remain anonymous because

he may run for elected office or reelection again, but he suggested

the number of $500,000.

And then, of course, I flew out this morning and conducted the

final leg of the poll, which was a management consultant who

serves both in government and private sector; and, ironically, he

came up with the number of $500,000 which Governor Sununu had

mentioned in his earlier remarks.

The point is, it is a very politically sensitive number. But if

you’re going to do it, let’s do it in a way that accomplishes what

we want to accomplish; and that is allow the President to serve

and others to run for the Presidency and meet their basic minimal

expenses of a personal nature as well as their family educational

expenses. Lift it high enough so that we can really avoid the wage

compression that exists for other government officials who are similarly situated. And, No. 3, put it at a level that will be acceptable

to the American people. I believe they understand the need for a

significant change.

And I applaud this committee for the political strength it takes

to even have this hearing, let alone take a position on what can be

a very controversial issue; and I welcome your questions.

Mr. HORN. Thank you very much for those thoughtful comments.

[The prepared statement of Mr. Skinner follows:]

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Mr. HORN. Our last panelist is Thomas F. McLarty III. He is well

known on Capitol Hill and highly respected by members in both

parties in his initial job in the Clinton administration as Chief of

Staff and then Counselor to the President and then Special Envoy

for the Americas.

After joining the White House as President Clinton’s Chief of

Staff, Mr. McLarty helped enact the 1993 deficit reduction package,

the North Atlantic Fair Trade Agreement [NAFTA], Free Trade

Agreement, and the family and medical leave law, which didn’t

quite get eliminated, I mean, or passed.

In 1994, Mr. McLarty organized the Summit of the Americas in

Miami. He played a critical role in structuring the 1995 Mexican

peso stabilization program; and in his role as Special Envoy for the

Americas Mr. McLarty made more than 50 trips to the region,

planned U.S. participation in the 1998 Summit of the Americas in

Santiago. In addition, he’s participated in several G–7 summits and

traveled to the Persian Gulf on the President’s behalf to build financial support for the Bosnian peace process.

Before his White House tenure, Mr. McLarty served in the Arkansas State Legislature at the age of 23, which is probably the

all-time record, and as chairman of the Arkansas State Democratic

party and also the chairman of one of the major utilities in Arkansas.

Mr. HORN. We welcome you, Mr. McLarty, and look forward to

your testimony.

Mr. MCLARTY. Mr. Chairman, thank you very much, Congressman Turner. It is certainly a privilege for me to appear before you

today for this very timely, very important hearing; and I certainly

appreciate the opportunity to do so, particularly with my distinguished colleagues from previous administrations.

It is an honor to serve one’s country; and we do not and should

not expect, any of us, to profit or become rich from government

service. But sometimes I wonder if we’re having the opposite effect.

Secretary Bob Rubin used to joke that the only way to leave

Washington with a small fortune is to arrive with a large one. And

while I’m not worried about Mr. Rubin’s personal finances, his

humor I think has a ring of truth to it.

Mr. Chairman, as you noted, I am a product of the private sector,

both from a third generation family business endeavor which we

are still active in and having the privilege to serve as chairman

and chief executive of a publicly traded Fortune 500 natural gas

company before I came to Washington.

I am truly grateful for the opportunity to serve the people of our

country. But I think it’s fair to say the opportunity costs are high

and they are increasing, and I am worried that we are attracting

fewer citizens who have proven successful careers in private life to

serve our country.

This committee has documented a number of concerns about the

effect of a fixed Presidential salary. Lloyd Cutler, who served with

distinction both in the Clinton administration and the Carter administration, led a commission 10 years ago that recommended the

President’s salary be raised to $350,000. Congressman Jim Kolbe’s

committee I believe has suggested an increase by the year 2001 to

$400,000, a figure that we have discussed today.

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While I was privileged to serve President Bush on two Presidential commissions and, of course, served President Clinton in the

White House, my primary concern is not about the personal income

of them or any future President, although I think that’s important.

My colleagues have pointed out the reasons very eloquently and

thoughtfully. But I am particularly concerned with the fixed Presidential salary compressing the wages for others who serve in the

public sector; and that goes from the civil service to the military,

General Haig, and certainly to political appointees.

I think all of us would agree very strongly that the best government is one that attracts talented people from all walks of life. You

certainly should not have to be independently wealthy to serve in

government. But we have raised the cost of serving in government

rather dramatically.

Detailed filings that we all have to make for appointed positions

can literally cost thousands upon thousands of dollars. You have to

sever existing business relations, which others have spoken of; and

I think that’s proper. But I think these are very real costs, including the cost of relocation that should be included when we evaluate

government service.

In short, whether it be career civil servants, our men and women

in uniform or the people who serve in appointed offices, all of these

people are real American families with mortgages and tuitions and

all of the other challenges of modern life; and the bottom line is

that private sector salaries are increasing and government salaries

are not; and we should really not put people in the position of making a difficult choice between their family and their country.

Now, Congressman Turner has already suggested that it was big

news when Babe Ruth earned more than the President, and I’m

not suggesting that we should pay Presidents as much as major

league athletes or even CEOs. That is not the real reason one seeks

public service. But I do think that, as has been pointed out, that

the President’s salary should reflect the importance the American

people place on this job.

As you have noted, Mr. Chairman, the President’s salary has

been fixed since the Johnson administration. There are a number

of calculations we can make, including the George Washington calculation. But if we adjust it for the gross domestic product from

1969, we would have a salary of about $1.7 million. If we did that

on a per capita basis, it would be about $1.3 million. A more modest suggestion is the President’s salary should increase along with

average hourly wages. Other measures might reflect inflation of

the size of the economy, but no measure perhaps reflects the importance of the connection of the President to American families.

Since 1969, the last time the President’s salary was changed, average hourly wages have increased 425 percent; and that would

equate to about $850,000. Now, again, I’m not wedded to any one

number. I fully support the $400,000 figure that has been talked

about in the appropriation bill, and perhaps a larger number is justified, and I think it is an appropriate one for the challenge and

responsibility and the demands that we make on public people that

serve in public life today.

Mr. Chairman, common sense I think tells us that Presidential

salaries should not be fixed for 30 years. Fairness suggests that we

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end the pay compression for other public servants, and the economic reality is that government competes with the private sector

for talent and experience, and we should recognize that.

I commend you and this committee for holding this hearing on

a very important matter, and I hope Congress will move forward

to address this issue in a timely fashion. Thank you.

Mr. HORN. Well, thank you for your very helpful remarks.

[The prepared statement of Mr. McLarty follows:]

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Mr. HORN. Let me just go down and have you all hear each colleague. I will like to start with Ambassador Jones and say did anybody convince you here that you ought to move from $400,000 to

$500,000? That’s one part of the question. The other is Governor

Sununu’s point of we should have a system that reviews this on an

automatic basis of either every two terms or 10 years or 15 years,

whatever.

In the case of the Comptroller General of the United States, for

example, he gets one salary, and that salary follows him into retirement—he has a 15-year term, et cetera, and we haven’t gotten

into the retirement yet, but we will. Let’s start with you, Ambassador.

Mr. JONES. Well, on both of those points, I will opt for a higher

level of salary increase to at least $500,000; but recognizing as the

others have, the political difficulty, $400,000 would be the minimum. As far as an annual review, I think Governor Sununu makes

a very good recommendation and at least as we review the census

every 10 years, we ought to review Presidential salaries, and the

impact of that salary on the rest of government, at least every 10

years, if not earlier.

Mr. HORN. General, what’s your feeling?

General HAIG. I recommend the third year of every term of every

President you should take a look at this subject. I would hope that

the committee would look at the $500,000 level. But, again, there

has to be an assessment of the possible and what can be most efficiently done in a bipartisan way.

Mr. HORN. Mr. Hartmann.

Mr. HARTMANN. I can’t think of anything more.

Mr. HORN. OK. Do you agree with the $500,000?

Mr. HARTMANN. I agree with it.

Mr. HORN. And the review that Governor Sununu is talking

about?

Mr. HARTMANN. Yes.

Mr. HORN. OK. Mr. Duberstein.

Mr. DUBERSTEIN. I would support $500,000, but my vote isn’t the

one that is important; I think you have to look both to the American people and your colleagues in the Congress of whether doubling to $400,000 is more politically feasible than $500,000.

On the second issue on John’s suggested review, the quadrennial

commission is not charged with responsibility for a President’s salary; but certainly looking forward every 4 years, I think, makes the

ultimate sense as Al Haig said in the third year of a President,

looking forward to the next Presidential term. So I would strongly

support a regular review of Presidential salary.

Mr. HORN. Governor.

Mr. SUNUNU. I came in to propose $500,000. I yielded to the

$400,000 that you have, but if you twist my arm, I will go back to

the $500,000. I don’t have any argument with utilizing an existing

mechanism like the quadrennial commission or whatever—I picked

8 years or 12 years as a period—because thinking in terms of either two or three Presidential terms. But whatever the period is,

I think we can go a long way to regularizing the process and that’s

the key to it.

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Mr. HORN. OK. Mr. Skinner, you started all of this with that

vast universe of polling that you told us about.

Mr. SKINNER. No, you know where I stand. I would say that if

you’re going to set a mechanism in place, which I agree should be

set, we ought to do it right. The idea of putting this on some bill

that, you know, is a trailer of some sort, rather than, you know,

really giving some thought to the mechanism so that it will go

through a regular review, I think is most appropriate so we don’t

find ourselves in the situation that where every 30 years and it’s

subject to all of these others.

We’ve done that with Federal pay a number of years ago. It

works. There has been a pay compression problem because of some

other issues. But clearly—and I think that mechanism ought to be

in place and it ought to be adhered to.

I would also add I have a number of friends that sit on the Federal judiciary, served with me in the U.S. Attorney’s Office and

other places, and this compression problem has also created a very

major problem there where we’re just not—we’re attracting candidates, but we’re not attracting really qualified candidates because

of that.

And the compression would help there, too, but what has happened is sometimes we don’t go through it. We set the mechanism

in place and for one reason or another, because it’s tied to congressional salaries, we don’t go through it, and I don’t think anything

we set should be tied to congressional salaries. That’s an issue that

Congress has got to work through themselves.

But all of these other people should not be tied to those salaries,

because I think that creates the same compression problem you

have otherwise.

Mr. HORN. Any change in your position, Mr. McLarty?

Mr. MCLARTY. No, there’s not. I think I can certainly support

$500,000. It’s got to be tempered, obviously, with political judgment. I think you can make a case for greater than that. I strongly

support some type of review that is thoughtful and appropriate. I

think that would be a great deal of help in this situation.

Mr. HORN. I now yield to the ranking member on the committee,

Mr. Turner of Texas, for questioning.

Mr. TURNER. Thank you, Mr. Chairman.

Mr. McLarty, I think you were the last to mention the problem

of compression of Federal salaries. It’s interesting to know that the

Congress legislated a freeze on congressional salaries which also

applied to the top Federal office, the top Federal positions as well,

not only in 1994, 1995, 1996, 1997. There was a pay increase in

1998 and in 1999.

And, in fact, if Congress had not legislated that freeze and had

allowed the automatic adjustment, the cost-of-living adjustment to

take place, if my math is correct, the Vice President would be making the same as the President is today. So it is a problem that we

should address.

Obviously, the Congress has been part of the problem in trying

to deal with it, and I certainly think it reflects the political charge

of nature of the issue to note that for all of those years that I mentioned the Congress denied itself and the other top level Federal

officials a pay raise.

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And I guess the question I would want to ask each of you is

what’s the best way to explain this problem to the American people? We’re going to hear on one of our next panels testimony that

shares some results from a Pew Research Center poll which basically says that the people of this country understand the President’s entitled to a pay raise, but the majority of them think it’s

somewhere in the range of $10,000 to $20,000. And in fact, there

appear to be virtually no support for a doubling of the President’s

salary.

So to help us through this issue, which obviously is fraught with

political minefields, would any of you like to offer up a suggestion

as to how to best make the case for this kind of change?

Ambassador, would you like to start helping me on that one?

Mr. JONES. It was very difficult. There’s never a good time for

a congressional pay raise. There’s never a good time for a government pay raise in general, politically speaking. And it’s very difficult to convince the American people that one is deserved. Part

of that, I think, Congress brings on itself by raving and ranting

against a pay raise and not giving the kind of respect that this institution of Congress deserves.

I think that carries over to the American people and the respect

they have for the institution. It was attempted a few years ago

back to make an independent method of assessing what congressional salaries and other salaries should be, so that they could

occur automatically.

The problem is the appropriations process denies that. It seems

to me some sort of independent mechanism that would give an

independent review and an assessment of Federal salaries is a better approach, something that would equate to the independence of

our Federal judiciary.

But it’s going to have to be something that’s proactive. It’s going

to have to be something that you can constitutionally mandate the

appropriations process to fulfill.

Whether it’s in some form of a trust fund, I’m not sure, but I

think that you’re never going to get around the political obstacles

as long as Congress goes through the regular annual debate on a

pay raise. So some sort of independent mechanism is the way that

I think you can go about doing it.

Mr. TURNER. Mr. Haig, do you have a suggestion for us?

General HAIG. I just suggest to you that we’ve had every member

of this panel recommend $500,000 or $400,000. I don’t think it’s the

job of the Congress any more than it is the job of the President to

be dictated to by polls. I think the American people are ready to

take this, if it’s given to them, with the factual data that was presented here at this hearing.

And if it’s done and the Congress moves courageously. I think it

will get through.

Mr. TURNER. Thank you. Mr. Hartmann, do you have a suggestion?

Mr. HARTMANN. I have nothing to add.

Mr. TURNER. Mr. Duberstein.

Mr. DUBERSTEIN. I want to echo what General Haig said. I think

this is not a business of polling; this is a question of equity. I think

the American people will, in fact, support a significant pay raise for

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the President of the United States. I don’t think the selling job has

been done, as far as there being no pay raise since 1969. That’s

why I used the examples that I used.

I think people will understand $10,000 or $20,000, but only in

the sense of a year or two. If you talk about 30 years, I think people will understand the fundamental change in the Office of the

Presidency with C–SPAN, with cable television, with the 24-hour

news site, et cetera. And I think it is not a losing issue.

Mr. TURNER. Governor.

Mr. SUNUNU. Mr. Turner, I think it is an issue that the public

can be educated on. But going back to your poll, I suggest, like all

polls, there is a problem in the question not in the answer. And the

question was probably the President of the United States makes

$200,000. What do you think a good pay raise for the President

would be? $20,000 is an absolutely appropriate answer to that

question.

But if the question was not even how much should we pay this

President of the United States, but how much should we pay the

next President of the United States, what is a fair salary for the

next President of the United States? I suggest to you the poll would

probably come in with numbers around $1 million. And so with all

due respect, there are polls and there are polls and there are polls.

$500,000 I think is a good compromise.

I think that’s an educable number, and I commend the committee for having the hearings. And I think you will have no trouble

selling that point.

Mr. TURNER. Thank you. Mr. Skinner.

Mr. SKINNER. Well, every once in a while in government you’ve

got to follow the slogan I think Nike has, ‘‘Just Do It.’’ And I think

this is one of those issues that, if we sit around waiting for all of

the input and everybody else and full education, you will miss this

opportunity. I mean, this is really the first realistic time in 30

years that Congress has addressed this. And I think you’ve got the

ball moving.

You’ve got, certainly, a record; and I think if Governor Sununu’s

point—if you also said the President of the United States, the Office of President of the United States salary has not been raised

for 30 years, how much do you think the next President should

make if we’re not going to raise it for another 30 years? I think you

might get a far different answer than $20,000.

Mr. TURNER. Thank you. Mr. McLarty.

Mr. MCLARTY. I would agree with the comments that have been

made. I think it should be approached in a very direct, straightforward manner. I don’t think most people realize the President’s

pay has not been raised for over 30 years, and I think that’s the

first point. And I think common sense and equity will be a strong

point to make. It certainly should be done in a bipartisan manner.

I think that will go a long way in terms of how people react to the

proposal.

Mr. TURNER. Mr. McLarty, I know that most Americans and to

all of us $200,000 is a lot of money. Most people don’t make that

kind of money. But one of the issues I raised in my opening remarks was my belief that the President’s salary should be sufficient so that he would not be susceptible to corruption.

47

And you’ve been there most recently of this panel. It seems our

current President has had a lot of expenses come his way for various reasons. He’s had to raise money privately to cover legal costs.

Could you describe for us just from your own personal experience

the kind of pressure that exists in the White House today with regard to finances for a President and the First Lady or First

Spouse?

Mr. MCLARTY. I don’t think some of the pressures are singular,

Mr. Turner, for this administration. I think it’s probably been

building over the last several terms of the Presidency. I think,

clearly, disclosure is one of the areas that I noted, and I think certainly from an overview or a legal side that the expenses have

grown over the years. But I think we have seen that growing over

the years.

It’s a very real number, but I think it’s a very large number. But

I think it also, of course, reflects not just the President but those

that serve in government as well. And that was part of the point

I was trying to make. I don’t think this particular measure should

have as its focus the legal bills or anything of that aspect.

I think that the cost of public service, of serving in public service,

should be the focus of that. There’s no question that the point you

raise is a valid one. It is expensive, not only in terms of real costs,

in many cases moving to Washington.

It is certainly expensive in terms of opportunity costs. And I

think the last thing we want, whether it be at the Presidential

level or anywhere in the government, is to have any kind of setting

for less than fully appropriate conduct.

And I think in the President’s case—you have also seen with

President Carter—there is great ability to do great public works

after tenure as President. So I think that should go into play as

well. And there is other Presidents as well, not just singling out

President Carter.

But there is no question there are stresses. I think Mr.

Duberstein and others have pointed out many of the reasons for

that, and they in all likelihood will continue to grow, whether we

have a Democrat or a Republican in the White House.

Mr. TURNER. Thank you. Thank you, Mr. Chairman.

Mr. HORN. I now yield time to the gentleman from Pennsylvania,

Mr. Kanjorski, for the questioning of witnesses.

Mr. KANJORSKI. Thank you very much. Does anyone on the panel

know what the President’s salary would be today if we took all the

inflation over the last 30 years into consideration? Have they done

the math on any of that?

Mr. HORN. We will have in the next panel.

Mr. SKINNER. In the last 30 years, sir?

Mr. KANJORSKI. I am just wondering when we think of the 1970’s

when we had double-digit inflation, where we would be today if

every year we increased the President.

Mr. SUNUNU. A little under a million.

Mr. KANJORSKI. A little under a million.

Do any of the presidents of our major universities, would it be

reasonable to say that they are certainly in the $400,000 or

$500,000 range?

Mr. SUNUNU. And some higher, I believe.

48

Mr. KANJORSKI. I know one of our universities in Pennsylvania

is so high the legislature is not allowed to know it.

Mr. SKINNER. Good pay for a coach is a million a year. It all

packages a year. Some coaches in major institutions have a total

compensation package of $1 million or $1.2 million.

Mr. KANJORSKI. It seems that those who criticize this the most

appear on the media on a regular basis. It seems to me that we

in Congress should think about making sure that if they appear on

a licensed television or radio station, the commentators’ salaries

should be disclosed.

When you have a newscaster being paid $7, $10, $12 million a

year, it seems hypocritical for him to start the ball rolling against

these unusual high political salaries. Most people are completely

unaware of the fact that these media celebrities are paid these extraordinary amounts of money.

I do not know who made the observation—I think my good friend

Mr. Jones how we tend to beat ourselves to death up here. It will

be a pleasure to know sometimes we get down there and it is only

one or two Members of Congress.

Invariably, someone is running for Senate or somebody is running for Governor and they see a political opportunity and get out

there and criticize public salaries, whether they be judges or Congress or the President.

WHile it will happen again, I tend to agree with the panel, Mr.

Chairman. We just have to bite this bullet, and we should not play

around with the fact. Quite frankly, I think we ought to pay the

President of the United States $1 million a year.

If anyone is not worth $1 million a year to lead this country, he

or she probably should not be President of the United States. As

we all know, it is a 25-year commitment to rise to the level to aspire to that office. It is not just a convention meeting. As we all

know—those conventions do not meet that way.

It is a long protracted loss of income in private life that people

would have. On the judiciary level, I have been a little annoyed

with the idea of my friends in the legal profession who entertain

seven-figure salaries on a regular basis, and they are very difficult

to persuade to sit on the bench, whether it be a district court or

an appeals court or a supreme court for that matter.

It seems now almost the only people that will decide to sit on a

supreme court already have amassed sufficient money, that they

are relevantly independent, several millions of dollars in net assets.

That’s unfortunate because some people will not have that opportunity and therefore have to make terrible choices.

Talking of this President and being familiar with tuitions, I am

sure Stanford University is not cheap. To my knowledge, elected officials do not get the opportunity to have any scholarships, et

cetera, so they pay the full tuition. That amounts to probably

$160,000 after-tax income, just to educate one child.

If a President has three or four children, as I think the next

President may have, not to state who that may be, that could be

a very difficult expenditure.

I am also interested in the President’s staff. Assume we pay $1

million a year to the President or half a million dollars to the

President. How are we going to attract people of your caliber to

49

leave private life in seven-figure incomes and come into administrations and serve for 4, 8 years and then sometimes have to spend

$1 million to defend yourselves with the litigation now that is almost endemic to the system?

There is one other thing I would like the panel to answer. Have

you given any thought about giving an exemption or a moratorium

to a civil lawsuit to the President of the United States while he

serves in office so these extraordinary expenses are not required to

be incurred when, quite frankly, I would say anybody that stands

in a rope line to get to shake the hand of the President could sue

the President for assault and battery if they were willing to go

through that process.

It would necessitate hundreds of thousands, if not millions, of

dollars in legal expenses to go through the legal process at this

point. Address just what type of insulation we should give to the

Office of the President and these inordinate expenses that are a

new political phenomena in our society? Let’s start with Al and

move down the panel.

Mr. JONES. With regard to your last recommendation, yes, I

think Congress should give some consideration to an appropriate

constitutionally proper exemption, I mean, deferment of civil suits

against a President.

Obviously, Congress will have to do it if it’s going to be done, because the Supreme Court has ruled on this question. And so I

think that’s something that Congress should consider.

With regard to attracting people to other levels at the White

House, et cetera, I think the salary is important, and it should go

up somewhat. But I think you’re going to have to change the attitudes about public service and the people who come to public service and their motivations. My experience is that people are truly

properly motivated to serve the public when they leave private sector and come into government service.

But when you fill out the forms and when you answer all of the

questions, the assumption is that somehow you’re going to try to

cheat, lie, and steal; and in order to prevent you from doing that,

you answer a number of questions that leaves you open to tremendous legal liability if politically motivated suits are desired.

And then second, you are required in many instances to divest

of whatever you have accumulated for yourself and your family, as

opposed to a total blind trust or something else.

So I think the presumption that many people who would come

into public service and would be asked by a President is that somehow they think I’m a crook and just going to try to cheat. I think

that presumption needs to be changed, because my experience is

just the opposite is true.

Mr. KANJORSKI. General.

General HAIG. I would like to add also the observation I think

I’m the only one at this table who actually ran for President, or at

least tried to run. It probably cost me $2 million of my own personal funds to do that, despite the money that was raised in the

campaign. I got into the legal disputes with the Federal Election

Commission. If you really wish to look at something which makes

lawyers rich for little, that Commission is a very, very good thing

to look at.

50

But having said that, I know there are candidates running this

year who are willing to give $20, $25 million of their own personal

money for the opportunity, the honor, and the challenge of leading

this land.

I don’t think the money side of it is nearly as important as ensuring that the incumbent can live in dignity, educate his children,

et cetera. As you quite rightly pointed out, we most recognize that

these are very dynamic amounts that must be assessed regularly

so that we assure that the incumbent is paid in a way that he can

enter that office and not draw down on the assets he brought with

him.

That gets right back to what you said, Mr. Turner, that, by God,

it’s not a rich man’s club. It’s got to be an office open to every individual in this land. So I just don’t want to get too astronomical because I’m afraid if $1 million went up there you would get the regurgitation that we’re talking about, although it is justified.

Mr. HARTMANN. Well, I would make the observation that

government——

Mr. HORN. Do you want to get the microphone a little closer?

Thank you.

Mr. HARTMANN. I would make the observation that it seems to

me that right now we’re in a period of our history in which government service is at a rather low ebb in public opinion. I won’t say

that government service is necessarily to blame for that, but I do

think that when you start waving around half a million dollars or

$1 million in the face of ordinary people, they aren’t going to like

it.

I mean we’ve made very persuasive arguments here for why it

is necessary in the case of government people and particularly at

the top level of government people. But I don’t think the public is

going to buy it, not in its present mood. If you want to get an Eisenhower in here to propose it, you might succeed. I don’t think

you’re going to succeed right now.

Mr. HORN. Mr. Duberstein.

Mr. DUBERSTEIN. Congressman Kanjorski, I don’t think salary is

the issue. Government service shouldn’t be a punishment; government service should be the highest calling. The idea of attracting

people who have to run the maze of a confirmation process in the

other body deters so many now. I’m not talking about the elected

officials; I’m talking about those of us who have been appointed to

either confirmable jobs or nonconfirmable ones.

The price you pay, your family pays, is astronomical; but it’s

worth it if you can make a difference. If the salary had been

$10,000 higher when President Reagan asked me to be his chief of

staff, it wouldn’t have made any difference. It’s the opportunity to

make a difference to serve. That’s what it has to be all about.

Mr. SUNUNU. I think Ken makes a very important point. When

I had to go out and solicit potential Members of the Cabinet for

President Bush, the issue was never salary. The issue was abuse

in the public domain; and, therefore, that is the biggest deterrent

to participation in government by good people.

I don’t mean to suggest that salary is not any factor at all. I remember my news conference in May 1988 when I announced I

wasn’t going to run for a fourth term and the press asked me how

51

come, and my answer was when you send $20,000 a year to MIT

and $20,000 a year to Stanford and $20,000 a year to the IRS, it

doesn’t leave much from a $60,000-a-year salary.

So there are times in which the salary issue is an important one,

but in terms of what we’re addressing at the Cabinet level for the

President, I don’t think it is the issue.

Mr. KANJORSKI. Mr. Skinner.

Mr. SKINNER. Well, I have done it twice. The first time I took a

60, 80 percent pay cut, and the last time about the same. But every

time I did it, I knew I wasn’t going to do it for life. I knew I wasn’t

going to be excluded from having an opportunity to go back to the

private sector to make up for the costs, as well as maybe to even,

frankly, enhance one’s position.

And so I think in recruiting people at the very top for a relatively

short period of time, it’s not a problem. I do, however, agree with

your comments with the judiciary; and as the only, I guess, practicing lawyer, at least at the table here today now, I know; and having been a U.S. attorney and been recruited for that job, it wasn’t.

But I, again, knew I was going to go back to the private sector.

When we recruit judges, we recruit for life or good behavior; and

only three, I think, have been removed in the last 30 years. We are

recruiting good judges who are good lawyers. I think it is very difficult, except for the Supreme Court, to recruit great lawyers with

great experience for the judiciary.

And I think it is very difficult to keep great judges on the judiciary for an extended period of time because of the opportunity that

exists or the impossibility to educate, because we’re recruiting

them at a time when they have all of these expenses building up.

And as we recruit younger candidates to run for the Presidency,

they have educational expenses that some of the others don’t. So

I think as all of this plays a role, we’ve got to give them the ability

at least to minimally meet the expenses that Governor Sununu and

others talked about.

Mr. MCLARTY. I believe we have two or three issues related here:

one is the Presidential pay, which I think really just goes to the

appropriateness and dignity of the office which we’ve all spoken to.

I think, second, it is clearly more difficult to recruit people of

standing, of accomplishment, from the private sector, whether they

be from industry or academia or wherever to serve than it was 5,

10 years ago. I think that probably regrettably will continue.

Perhaps there’s some way we could at least evaluate some of the

findings required, but I think all of us are for transparency and

openness and none of us would—we would want to be very careful

of how we did that. I do think the salary level makes a difference,

however, in some of the civil servants and some of the younger people in government, not so much recruited at a Cabinet level, but

in a working level.

I think that does make a difference, and I’ve seen that time and

time again where very capable, bright young people come into government and just really determine they cannot stay because of the

financial requirements or burdens of the responsibility. And I think

in that case the Presidential salary does drive that equation to

some extent.

52

Mr. HORN. I thank the gentleman. Let me followup on some of

this. The compression problem without question does have a real

effect on the ability and capacity of an administration to staff the

executive branch, particularly, with the political appointees. And I

certainly remember that under President Eisenhower when the

Secretary of Labor asked me, as his Assistant, to go out and check

them out for solicitor.

There was a year and a half to go into the administration, and

you face a real problem trying to recruit in the last year and a half

of any administration, and you also face the salary problem.

I think the way your heads nod, you all agree that this is a problem we have to deal with here, if we’re going to get people for the

last half of the administration. I think the figures used to be that

Cabinet officers sort of stick it out for 4 years; Under Secretaries

maybe you’ve got 3 years; Assistant Secretaries are maybe 2, 21⁄2

years. I think all of you have faced that problem, if you have been

in your role as chief of staff.

Do you have any further advice to us? I’ve got one more question

then.

OK, one more question, retirement, and how we deal with it.

President Truman once said, and I think he’s right on the mark,

when he’s out of the Presidency, a lot of boards wanted him to

serve, and so forth. He said they don’t want me, they want the

Presidency. I think he’s absolutely right. Now the question is, if we

pay the President adequately, if we tie his retirement or her retirement to it, should we say, OK, you’ve got that retirement, you’ve

been President of the United States, the highest honor any citizen

of the United States can give. Can we say you aren’t going to serve

on private boards?

What do you think? I know you’ve been on that, General. We’re

not picking on generals; we’re just saying Presidents.

General HAIG. Well, I think you ought to be very careful about

that, because every President is of a different mold. Some are older

and have been through their careers and hopefully we will not forget that wisdom sometimes pays off. Some are younger and more

visionary and have a whole life ahead of them when they leave the

Presidency.

I would be very careful. I think we should look at the retirement

pay of the President on the same cycle that we look at his salary

on active duty: there should be a relationship.

But most Presidents are pretty well taken care of. If I’m looking

at the figures that the committee gave us in preparation for this,

in retirement. And I think maybe a very modest increase is all

that’s in order. I think it’s about $150,000-some and then it gets

aumented with allowances and benefits, up to a rather substantial

number with recent Presidents.

But it requires more. You know, even an ex-public servant is—

every day I have five or six letters a day that I have to answer and

send out and I have to have a staff to handle for me.

If I were an ex-President, I would be getting thousands of letters

a week. This is a huge burden. And we’ve got to handle it, but I

don’t think I would want to put any ground rules other than to link

active and retirement pay in a responsible way.

Mr. HORN. Any other comments on this?

53

Mr. SUNUNU. Mr. Horn, I would not attempt to limit what a

President does, either in public service or private service afterwards. I just think the act of doing that suggests to the public a

conventionality that is not there. And I just would recommend that

that probably carries more of a public service burden than benefit

in the long run.

Mr. HORN. Mr. Skinner.

Mr. SKINNER. Well, I think that the retirement should take into

consideration his service and length of service to our government

in many cases, and it should be an appropriate level. I don’t think

we should penalize him by giving his retirement less than what

that person would have gotten had they saved the full time.

Most Presidents don’t serve on any significant public boards. I

think they’ve got plenty of opportunities, as we know in today’s

world, to take care of some of the financial responsibilities they

have late in life and still have a comfortable life; and many, like

President Carter and others, have decided to devote their time in

a very, very meaningful way in the public sector.

And they should have that opportunity. And I think a fair retirement program consistent with government retirement programs is

appropriate.

Mr. HORN. Well, in the 19th century we had the problem with

many Presidential spouses had hardly any means to exist and continue once their husband died. I mean should we look at that also?

Mr. SKINNER. I think we still have that problem with the Federal

judiciary. We allow someone to retire from the Federal judiciary,

and they keep their compensation for life and can serve as a senior

status in a less active role and continue to maintain their salary

and all that goes with it. But as I recall, the pension for widows

is basically nonexistent. And that is just an additional price of public service that’s unwarranted, in my opinion.

We should treat people, you know, consistently as they serve in

government, and I think in doing that, we ought to have a consistent, fair retirement program for all public servants.

Obviously, it won’t be at the level that some of these huge, you

know, programs that exist from the private sector—I’m the beneficiary of one of those, so I appreciate that—but it ought to be at

a level that recognizes their contribution and allows them to serve

out the rest of their life and their family and the rest of their life

with some dignity.

Mr. HORN. Mr. Duberstein.

Mr. DUBERSTEIN. Mr. Chairman, I think that on retirement, on

retirement benefits, it should be looked at periodically as the President’s salary is reviewed as well. As far as postemployment limitations, I would strongly advise you not to do that and place anything, any curtailment, on a former President of the United States.

Mr. HORN. Any other thoughts?

Mr. KANJORSKI. Mr. Chairman, while we have this distinguished

panel, may I ask something totally unrelated to the hearing?

Mr. HORN. OK. You will have one last question.

Mr. KANJORSKI. All of you have dealt with the Office of the President and the Congress and the various committees and their jurisdictions. Do you think this would be an appropriate time for the

Congress to form a commission to reorganize the executive and legVerDate 11-MAY-2000 07:09 Jul 21, 2000 Jkt 000000 PO 00000 Frm 00057 Fmt 6633 Sfmt 6633 C:\DOCS\62932.TXT HGOVREF1 PsN: HGOVREF1
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islative branches of government and take the advantage of three

living Presidents, and have that commission return sometime in

the next term so that functionally we can line up the Congress

with the executive branch of government?

Have you found that frustrating in your experiences as chief of

staff that your officials have to be testifying before seven or eight

different committees and the games we play up here to draft legislation to get the specific committees and avoid others, the pit

stops?

Do you think this would be an appropriate time for us to put a

Hoover Commission together, both for the executive branch and for

the legislative branch, do it together, get the advantage of your experiences now and the living Presidents while they are here?

Mr. JONES. I chaired a committee for the National Academy of

Public Administration several years back on this very subject and

made some recommendations in that respect. And I think those

recommendations are still sound. I’m not sure that a full Presidential—or a commission needs to be organized to study this. I

think this is something your relevant committees and the Congress

should deal with on a regular basis, seek the administration’s opinion.

But you put your finger on two of the most frustrating or the

most frustrating problem, is the proliferation of jurisdiction that

overlaps and forces one Cabinet officer to spend most of his or her

time on the Hill testifying basically the same testimony. But I

think that’s something that Congress ought to look at itself.

General HAIG. I would comment just briefly, we hear a lot about

the power of the Presidency; and having served as many as I have,

I left that experience with my main concern focused on the limitations on the power of the Presidency, which today have gotten out

of hand, whether it stems from the courts or, more importantly, the

legislature.

So I would love to see the legislature examine itself and let the

executive branch examine itself rather than to get into a partisan

branch brouhaha that is also bureaucratic in character; but your

question is very well taken and long overdue.

Mr. HORN. Mr. Duberstein, any comment? Then, Governor.

Mr. DUBERSTEIN. No, I agree with Al. I think doing it separately,

the legislative branch and executive branch is the way to do it

rather than forming one Presidential commission. I agree. I think

it is long overdue. I think it should be looked at, and what better

committee of the Congress to do it than this committee.

Mr. HORN. I’m tempted to say that you’re suggesting we rewrite

the Constitution as in 1787. But go ahead, Governor.

Mr. SUNUNU. I support the idea of separate branch review. I

think with all due respect to the question asked by Mr. Kanjorski

that I suspect any Congress will be clever enough that no matter

what structure you come up with that in about two congressional

cycles they will figure out how to reparcel it out to the committees

and create the same problem all over again.

But in terms of improving efficiency and bringing government

into a modern structure, I think there is a great need for it.

Mr. HORN. Mr. Skinner.

55

Mr. SKINNER. Well, having served as a statutory Cabinet officer

of a pretty big department with a lot of different jurisdictions, I did

not find that an insurmountable program. I was able to work with

most of the committees. I did take probably a little more time than

necessary.

You do become concerned, although I think General Haig said,

is are we really in balance and have we by the creation of multiple

commissions—I mean, multicommittees with multiple jurisdictions,

have we kind of thrown the balance of powers, which I thought was

three equal branches of government, a little off kilter.

And if a joint effort would solve that problem, rather than an

independent effort, I would be all for it, because I think it is a good

idea to visit on occasion whether or not we’ve got that constitutionally provided balance of power really and balance—and sometimes it gets out of kilter.

Mr. HORN. Any comments, Mr. McLarty?

Mr. MCLARTY. Well, I think we were asked to address a very serious and heavy list of a subject in the one we’ve discussed. This

is an equally, I think, serious one. I believe there’s a more efficient,

effective way to do it, the vehicle, whether it’s legislative or joint.

I think I would leave this an open question.

But I do think that there’s got to be a bit more effective way than

we’re currently doing it, stopping short of rewriting the Constitution, Mr. Chairman.

Mr. HORN. Well, thank you gentlemen. We really appreciate you

coming here. We might have some followup questions if you

wouldn’t mind, but thank you. Your perspective and experience is

a real help to us. And that’s why we have the committee system

in the Congress of the United States, be it weird sometimes. OK,

thank you very much.

Panel two will come forward.

You might know the routine, and first we will give you the oath.

So please stand and raise your right hands.

[Witnesses affirmed.]

Mr. HORN. The clerk will note all four affirmed.

And we will begin with Sharon Gressle, the specialist in American National Government of the Congressional Research Service,

which is part of our great Library of Congress, and they are part

of the legislative branch of the government. And we’re glad to have

you here.

STATEMENTS SHARON GRESSLE, SPECIALIST, AMERICAN NATIONAL GOVERNMENT, CONGRESSIONAL RESEARCH SERVICES; GARY RUSKIN, EXECUTIVE DIRECTOR, CONGRESSIONAL ACCOUNTABILITY PROJECT; PAUL LIGHT, DIRECTOR, CENTER FOR PUBLIC SERVICE, THE BROOKINGS INSTITUTION; AND DONALD SIMON, ACTING PRESIDENT, COMMON CAUSE

Ms. GRESSLE. Thank you, Mr. Chairman, Members of the committee. I would like to just place a short historical context for our

discussions today. I will not make a lengthy statement.

In the previous changes of salary for the Presidency, we had—

of course, the first for President Washington, that was in legislation for the President and the Vice President, that was the only

56

time in which the salary was not set immediately prior to the

change of administration.

The 1873 and 1909 changes were both part of general government appropriations, as is this proposal now for treasury appropriations to change it to $400,000. In 1949, it was legislation that

focused pretty much on top officials’ salaries, but it was taken in

the context of a larger discussion following the Hoover Commission

on the whole scheme of Federal salaries.

In fact, our general schedule which we have today was created

pursuant to those discussions in a separate piece of legislature.

And, of course, in 1969—that was a stand-alone piece of legislation—it only changed the compensation of the Presidency. And as

you know, we are now at a situation where the next possible

change in that compensation is January 2001.

No one has mentioned the expense allowance that is available to

the President on an annual basis yet today, that is, a sum of

$50,000. It was set in 1949 at that sum. And at this point in time,

it is changed as to whether or not it was funds directly to the

President and whether or not it was taxable.

At the current time, it is to be used for official purposes only.

Any sums not used for that purpose would revert to the Treasury;

and it is not taxable, because it’s not considered to be personal

sums to the Presidency.

I won’t go into, unless you want me to, detail on what might be

considered some of the specific perks of the Presidency. We have

touched upon the issue of the pension, however, that has been in

place on a systemic basis only since 1958.

At the present time, that pension is key to the salary of the Cabinet secretary. When that salary is increased, so too is the pension

of the President. And at current, it is $151,800.

Along with that comes the staff allowance and office space as

well as security. There’s currently a proposal in the 106th Congress

to make some changes in that system.

When we are talking about the relationship of the President’s

salary to other Federal salaries, I think that it’s sort of interesting

to look at how it started out.

The Vice President’s salary, for example, was 20 percent of the

President’s; the chief justices was 16 percent. And in 1856, when

Members first came into an annual pay salary, that salary was set

at 12 percent.

In 1949, the Vice President’s salary was 30 percent, and the chief

justice’s was 251⁄2 percent of the Presidency. The 1969 salary

changes resulted in 31 percent differentials for the Vice President

and the Chief Justice.

And while there’s been some changes, for the most part those two

positions, as well as the Speaker now, are on a par pretty much

with one another and have traveled forward to the point where

they are almost at 90 percent of the President’s salary.

And, of course, the question is, whether there is an appropriate

differential between those salaries? If we were to look at OPM figures, using an inflator of 31⁄2 percent would put those three salaries above the salary of the President by the year 2003, which

means, of course, if there’s no change in 2001, we will have a problem.

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The question is, then, do we keep those two down and not change

the Presidency, or do we change the President’s salary, allow those

salaries to progress, or is there a decision made that the salary of

the President shouldn’t bear relationship to salaries of other officials in the government?

At the current time, if you want to open the discussion of compression, the senior executive service, which is our standard core

of executives both in management and in their technical expertise,

most of whom, 90 percent, are career employees and not political.

We have in some localities in the country four of the six levels

of the senior executive service being paid at the same rate. They

are capped out at level three of the executive schedule.

The base rate for the senior executive service has three of those

six levels frozen. It has not yet reached the general schedule. The

general schedule top level of a GS–15 currently, depending on

which locality you’re talking about, ranges from $102,000 to almost

$110,000 at the current time.

The Office of Personnel Management has done a little bit of

thrust in terms of projections. We will get into that discussion on

their behalf today, and, that is, if they took the 1969 $200,000

mark, and they were to bring it forward based on the CPI, they

would estimate a little over $900,000 for 1999.

If you were to take what has happened with the general schedule

adjustments from 1969 on and apply those to the $200,000, you

would get a little over $685,000 as salary, and if you were to take

it in terms of the executive schedule for the Cabinet secretaries,

there you would reach $506,000.

One of our economists over in CRS took the different salaries at

the different points in history and brought forward using a differential—arrived at CPU, if you would, because those measures

did not exist back in the 18th century.

But they figure that the $25,000 salary would range—would be

about $240,000 using a very base inflator. As you said, we also arrived at the figure $4.5 million based on other counts. If you use

the CPI, you would take the $50,000 in effect in 1873, would bring

it to over $679,000; the 1909 $75,000 figure would be $1.4 million;

the 1949 $100,000 figure would be back down to $684,000; and the

1969 rate of $200,000 would be at just over $888,000. And that, of

course, would reflect fluctuations in price costs and inflation and

so on and so forth. But that just gives a bare bones.

We talk about the Commission on Executive, Legislative, and Judicial Salaries and their recommendations. In 1969, it was that

group which recommended the $200,000 increase for the President’s salary, and the time was right. The climate was right, and

that did go into effect through legislation.

The fiscal 1989 commission was the last time the quadrennial

commission was activated, and their recommendation at that time

was $350,000, as has been entered in the record today.

Basically, that wraps up my statement, sir.

Mr. HORN. That’s a very helpful statement. And thank you for

all the research. And all of those appropriate documents will be put

in the record at this point.

[The prepared statement of Ms. Gressle follows:]

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Mr. HORN. Mr. Ruskin. Mr. Ruskin is the executive director of

the Congressional Accountability Project. You might, you know,

mention to us what is the focus of that group.

Mr. RUSKIN. The Congressional Accountability Project works primarily on corruption in the Congress.

Thank you for inviting me to testify today regarding whether the

salary of the President of the United States should be increased.

The President’s salary has remained unchanged for more than 30

years, since January 20, 1969. The President earns a salary of

$200,000 per year with a generous pension, perquisites, a $50,000

expense allowance, living expense benefits that befit a king, plus

a near-certain prospect, if desired, of becoming a multimillionaire

upon leaving office.

The value of the Presidential pension is $152,000 annually in fiscal year 1999. Since the founding of our Republic, that has been

customary for the President who is the chief executive of our Federal Government to receive the highest salary in the Federal Government, as other top Federal Government salaries have risen to

approach an unchanged Presidential salary.

The Presidential salary now increasingly functions as a cap on

the salaries of Members of Congress and Federal judges. Some Federal judges and Members of Congress now criticize that cap. They

complain of pay compression at the top of the Federal pay scale.

They want a raise, presumably a large one. That’s why we’re here

today. The real question for today’s hearing is, does the Presidential salary cap serve the citizens well? I think it does.

The Congressional Accountability Project opposes the Presidential pay raise, not only because the President does not need a

raise, but because, more importantly, it would decrease the President’s moral authority to govern, lift the salary cap at the top of

the Federal pay scale, which restrains the energetic efforts of Members of Congress and Federal judges who wish to further raise their

salaries at taxpayer expense.

Of course, the public does not clamor for Presidential pay raise.

It would be wrong if the President’s salary were set so low that it

discourages the best, most honorable Americans from running for

President; but to the overwhelming part of Americans, $200,000 a

year plus enormous living expenses, benefits, is a great sum of

money.

The President suffers no real privations. The President does not

need more money except to pay legal bills. We have no lack of exceptionally bright and talented people in this country who would be

happy to serve as President for $200,000 a year.

Those people who would serve as President only if the salary

were higher are less interested in doing service than in getting to

be rich. We have no need for the greedy in the highest offices of

the Federal Government. In fact, we ought to weed them out aggressively. Good riddance.

Let them be will wealthy captains of industry or lobbyists on K

Street. The honest pleasures of serving the public, of diligently attending to their needs and earning their respect as well as the generous $200,000 salary is adequate compensation for the President.

It is mostly the people who have adopted the values of the corporation call for this pay raise.

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But the public sector is very different from the private sector.

This makes comparisons between the President’s salary and of corporate CEOs a case of apples and oranges.

The President’s salary and benefits are furnished by the taxpayers, more than 99 percent who earn far less than the President.

The taxpayers work hard to fill the coffers of the Federal Government, which is wrong for the differential between the Presidential

salary and the medium Americans to grow larger than it is, because such a high Presidential compensation package begins to

look as if the President were taking advantage of the taxpayers. It

erodes the President’s moral authority to govern.

To make matters worse, the Presidential pay-raise boosters propose a 100 percent increase in the President’s salary. The raise is

not to $250,000 or $300,000 or even $350,000 per year, but a full

doubling of the President’s salary. Try explaining that to a worker

who hasn’t seen a real salary increase in a generation. Everything

the President does sets the moral tone for America.

What tone will the President set, profligate or self-restraint? The

country is crying out for leadership by example. The President

draws a salary from a Federal Government that is currently $5.6

trillion in debt. If we are to reduce the Federal debt, the upper

reaches of government must lead by example and sacrifice for the

good of our country. That means the President first.

Our Nation’s frugality should begin in the President’s home. Citizens are pleased when their elected leaders show some dignified

self-restraint and humility and forego a pay raise. Their wallets are

thinner, but their moral authority grows. This intangible virtue is

very important.

As I mentioned before, this effort to increase the President’s salary is driven by Members of Congress and Federal judges who wish

to lift the President’s salary cap, which Members of Congress currently earn a salary of $136,700 per year with general perks, pensions, and benefits. Federal district court judges earn the same.

And appellate court judges, $145,000 per year.

Many Members of Congress and Federal judges chafe under

these salaries, even though they are lavish. In March, a wave of

avarice swept the upper reaches of our Federal Government. The

U.S. Judicial Conference announced that it would ‘‘vigorously seek’’

pay raises for the Federal judges, and it would also seek to increase

the salaries for Members of Congress and the President, the same

time the public was met with news reports that some House Members want to raise their salaries and cash benefits by as much as

25,000 per year.

The Presidential salary cap serves as a useful public function in

counteracting such efforts. It should not be lifted. This is especially

true with regarding its effect on congressional salaries.

The President, Members of Congress, and the Federal judges

ought to lead by example and sacrifice so that their moral authority might grow. They will be the richer for it and so will the citizenry in a way that is far more important than money. Thank you.

Mr. HORN. Thank you very much. We appreciate having your

perspective.

[The prepared statement of Mr. Ruskin follows:]

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Mr. HORN. Mr. Paul Light is director of the Center for Public

Service at the Brookings Institution in Washington, DC. Professor

Light.

Mr. LIGHT. It’s wonderful to be before you again on arguably the

most difficult issue that Congress faces regarding ultimately its

pay and the President’s pay. I appreciate the opportunity to talk

about a subject that is so important and a subject that appears to

be frozen in amber as we struggle to figure out a way to deal with

this effort to provide a salary that’s commensurate with responsibility. As you have in my statement, which I would like to revise

and submit to be the record, especially since it has been pointed

out to me that there is some very good scholarship on this

question——

Mr. HORN. Without objection, all the statements are subject to

your revision for another week.

Mr. LIGHT. Thank you very much. I would say that I do endorse

the effort to raise the President’s salary. I listened to hearings and

have listened through this hearing as we struggle for a rational

calculus by which to set the President’s salary, is it CPE, is it some

other CPI, is it some other index of wage growth, is it George

Washington’s salary adjusted for inflation, plus living expenses, et

cetera. But ultimately those calculus, the search for calculus fails

us because there really is none. It’s a question of how we value the

institution itself. Once we’ve raised the issue of raising the salary

we confront ourselves with a pressure to talk about the value of

this office, which no doubt everybody in this room would agree has

been tarnished over the last period of history. And we need to address that issue. What is a fair salary to pay the President is less

about Consumer Price Index, less about the recruitment of millionaires or not millionaires, it’s about how we value this institution

and it’s a symbolic gesture of where we think this great and important office belongs.

On the corporate salary scale, which most Americans say we

ought not to use, the Presidency right now would rank No. 785 on

a list of the top 800 salaries. Is that good? Is that bad? Is it an

abuse of our authority to argue that the President should move up

ever so slightly on that list? Today, Congressmen, by raising to

$400,000 we would move the President all the way up to position

670 or so.

We don’t intend that the President should be paid as much as

Michael Eisner or the other CEOs at the very top of that chart.

That would be an outrage. Some in this body and elsewhere around

this country might argue that it’s an outrage that Michael Eisner

and his colleagues make so much already. But all we argue here

today is a slight movement in the President in relative terms to

suggest a greater valuing of the office during this period of extraordinary run-up in those salaries.

In terms of the reasons for increase one can talk about comparability. I think that’s reasonable. One can talk about compression, the coupling of the President’s salary to other important offices. That’s reasonable.

One can talk about the impact of pay on public service, but I

would argue to you that there’s very little data to suggest that pay

is a motivator for the distinguished public servants who serve in

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this city and elsewhere in this country. Ultimately for me it’s the

symbolic impact of valuing this office properly during a period of

significant run-up in other offices. And most Americans actually acknowledge this. They do believe that the President’s salary should

be raised rather more frequently than once every 30 years.

My caveats about my recommendation are clear in my testimony.

We need to make general note that the higher we raise the President’s salary the more we move away from the experience of ordinary Americans, which is what my colleague Mr. Ruskin argues.

Ironically the general public reaction of the proposal for pay increases actually struck me as quite reasonable and more supportive

than I would have expected given the 15 to 20 years of stated decline in trust in government. The general division of opinion among

the American public toward the increase is about 45 to 45. When

you ask Americans, as our colleagues recommended here just a bit

ago, nuanced questions about the salary increase, you do get some

breaks. When you tell Americans only that the salary has not been

increased since 1969, 49 percent of Americans say it’s time for salary increase. When you tell Americans that the President’s salary

is currently $200,000 a year, the amount of support drops to 41

percent favorable. And yet in this particular climate 41 percent favorable is really quite extraordinary. I expected in the 20 to 15 percent, 10 percent range. I expected to find no support. Americans

tend to be moved, I think, here, if you talk about strategy, toward

the notion that occasionally you ought to address this issue. Occasionally you ought to address the President’s salary to keep pace

at some distant level with what we’re rewarding others in this

country, while at the same time the American public is also telling

us don’t let the President get too far away from us. Don’t let the

President move so far away that he or she won’t know what a grocery store scanner is for.

At any rate, we have the data from the Pew Research Center for

the people and the press to peruse and discuss if you wish. My conclusion is that symbolically we’ve raised the issue. Now we need to

more forward, that by not acting we’ll send a powerful signal not

to the public servants who seek the Presidency, lord knows several

of them, $200,000 pay increase would be rather somewhat of a

rounding error in their household budgets, but because we’ve made

a symbolic statement here that we value the institution. And that’s

why in my testimony, without going into it, I suggest that perhaps

we ought to link the Presidential pay increase with other ways of

burnishing the prestige of this great office, including campaign finance reform. But I know I’m preaching to the choir on that issue

and I shall be silent.

Thank you for the opportunity to speak.

[The prepared statement of Mr. Light follows:]

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Mr. HORN. Well, thank you. We always enjoy your testimony.

Mr. Donald Simon is the acting president of Common Cause. Mr.

Simon.

Mr. SIMON. Thank you, Mr. Chairman. I appreciate the opportunity to testify before you today on the views of Common Cause

regarding a salary increase for the President.

Common Cause has always taken a keen interest in the issue of

compensation for public officials because we strongly believe that

the public should be the sole source of compensation for public officials, a belief that reflects our deeply held view that public officials

should be accountable and beholden exclusively to the public whom

they are privileged to serve.

We also strongly believe that our government officials should be

paid an adequate salary commensurate to their vital responsibilities as our Nation’s leaders. For this reason we have in the past

supported pay increases for Members of Congress and other government officials. In the 30 years since 1969, when the President’s

salary was last raised, the Consumer Price Index, as others have

noted, has increased by approximately 350 percent.

Private sector wages have climbed, compensation for our Nation’s

corporate executives has soared, and salaries of other high ranking

officials in all three branches of the Federal Government have increased to an unprecedented percentage of what the President

makes, now, 88 percent in the case of the Vice President and the

Speaker.

As a result, it is our view that the President’s current salary no

longer reflects the high place of office in our Nation. It no longer

compares as favorably as it should to salaries of other Federal officials and it threatens to cause compression in salaries throughout

the Federal Government, a phenomenon in the past that has

caused serious problems in recruiting and retaining talented and

experienced individuals in Federal public service.

For all these reasons, Common Cause strongly recommends that

Congress act now to significantly increase the President’s salary.

Now, there are several ways to approach the question of how

much the increase should be. One approach would be simply to

apply increases in the Consumer Price Index to the President’s salary since the last adjustment in 1969. This increase, approximately

350 percent, would result in a Presidential salary of about

$900,000. Another approach would be to reset the President’s salary relative to congressional salaries at the same differential it was

set at in 1969. Then congressional salaries of $42,500 were set at

approximately 21 percent of the President’s salary of $200,000. Applying the same adjustment today, the President’s salary would be

increased to $640,000.

Although each of these calculations is supported by some logic,

they both result in salary adjustments that would probably be

higher than what the public would accept as appropriate. We believe a simpler approach is just to do again what Congress did last

time it faced this question after a long hiatus, which is to double

the President’s salary.

Now, doubling the President’s salary to $400,000 is certainly a

significant increase. But we do not believe this increase is too

great. This figure approximates the recommendation of the 1989

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Quadrennial Commission to raise the salary to $350,000. And if

cost of living adjustments since 1989 are taken into account, that

recommendation today would approach $400,000.

The $400,000 figure we believe also reestablishes an appropriate

differential between the President’s salary and that of the Congress

and other high ranking Federal officials. It would also alleviate the

problem of compression in the salaries of other Federal employees,

and it would again set the President’s salary at a level that clearly

reflects the importance of the office as compared to the salaries

paid to other public officials.

Finally, it’s important that Congress create a statutory mechanism to provide for more frequent, more regular and more modest

increases in Presidential salary. The President’s salary should not

be increased only once every three decades and then under extraordinary pressures and by extraordinary amounts. Congress instead

should add the President’s salary to those of other high ranking

Federal officials, including Congress, which are periodically adjusted for inflation, in order to make increases in Presidential salaries more routine.

Now, admittedly the mechanisms to produce regular modest increases for congressional salaries have not worked entirely as intended. But they have resulted in more frequent and reasonable

pay raises—12 increases since the congressional pay mechanism

was initially established in 1969—than has been the case with the

Presidency, which has been afforded no salary increase whatsoever

over the same period.

In sum, Common Cause strongly urges Congress to significantly

increase the salary of the President at this point by doubling it

from its current amount, to enact the increase now so that it can

take effect when our next President assumes office, and to create

a regular legislative mechanism to avoid lengthy periods in the future without an increase.

Thank you.

[The prepared statement of Mr. Simon follows:]

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Mr. HORN. Thank you very much. We appreciate that.

Now I’ll yield to the ranking member Mr. Turner to begin the

questioning.

Mr. TURNER. Thank you, Mr. Chairman.

Mr. Light, in your testimony, in your written testimony, you

mentioned in a little more detail the results of the Pew Research

Center survey than you mentioned in your oral testimony. Reading

your testimony and the details of that survey, it would seem that

the American people agree with Mr. Ruskin.

Am I correct in reading that I believe one of your statements

here is we can only surmise that there would have been virtually

no support for an increase of $200,000? Is that what the Pew study

shows?

Mr. LIGHT. Well, I can’t speak for the fine scholars at the Pew

Research Center. As an interpreter of public opinion, when the respondents were asked what size of increase they would be comfortable with, there was no support at all for anything in that

range.

I read in the general result that there is support for some sort

of increase, well rationalized and well argued. But when you start

asking Americans sort of what a standard increase might be the

notion of a $200,000 salary increase is beyond the realm of most

respondents to endorse. There would have been no one who said

$200,000. It just would have been beyond the pale.

Now, when you ask them—when you tell them that the President

is currently making $200,000 and do you support the notion of a

doubling of the pay, actually 41 percent in the Pew Research Center sample said yes. And I found that to be an extraordinarily high

response. So as we know from public opinion research, sometimes

the way the question is worded and presented produces a different

result. I find in these data more support for the increase than I expected. But in the specific question that you point to, significant

problems when you actually ask Americans how much to give, my

goodness, a $200,000 salary increase is beyond the comprehensible

for most Americans who would be interviewed in a survey like this.

Mr. TURNER. I notice in your written testimony you stated that

half of the respondents in the poll were first told that the President’s salary had not gone up since 1969 but they weren’t told

what the current salary was. And 55 percent of those said the

President should get an increase. But when the other half was only

told the current figure, the number that endorsed the raise fell to

just 39 percent. So does that tell me that even advising the respondents that the President’s salary hadn’t gone up in 30 years

didn’t seem to help a whole lot?

Mr. LIGHT. Well, actually, I have the data in front of me. And

the final analysis by the Pew Research Center was that if the respondent was just told that the salary had not been increased since

1969, 49 percent favored an increase. When they were told that the

President now earns $200,000 plus housing and travel expenses

and that the President’s salary has not been increased since 1969,

the number who supported was 49—41 percent.

You know, some can take a look at that and say there’s little

public support for pay increase. Given my view of what might have

been, I was kind of surprised by the rather significant support. I

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think you go forward and talk about this with the American public

in terms of what the institution needs, not what the occupant

needs.

These figures vary to a rather significant extent by whether you

think the President is doing a good job right now and whether you

trust government in Washington. You’re going to get this wrapped

up in partisanship and attitudes toward the current incumbent in

office if you don’t talk broadly about the need to make sure that

the institution of the Presidency, which Americans of both parties

and of various ideological leanings support, that this is important

for the institution itself. That’s how I would talk with the American

public about it.

Mr. TURNER. I suppose it is true that if you’re going to support

an increase in the salary you have to look at it in terms of what

the institution deserves. I think Mr. Ruskin is probably correct the

salary hasn’t kept anybody from running for office.

Mr. LIGHT. Correct.

Mr. TURNER. I’m not sure what effect it may be having on preventing corruption in the office. In the earlier panel I was trying

to ask Mr. McLarty what his personal experience had been working

in the Clinton administration in terms of the financial pressures

that exist there today. Some suggest that we may have a President

who very well could leave office bankrupt because of legal expenses. But it is important, I think, to be sure that a President

does not have undue pressure to cause him to want to seek funds

from outside sources just to ensure his financial future.

And there may be some pressures there. But it does seem in the

final analysis looking at it in terms of what the office deserves, it

may be the right way to do it.

Mr. Ruskin, you placed some emphasis on the fact that you believed the President’s current salary serves as a salary cap to hold

down all other high level government salaries. And I read between

the lines that one of the things you fear is if we raise the President’s salary somehow all these other salaries are going to be following shortly thereafter in an upward spiral and cost the taxpayers a lot more money than just simply increasing the President’s salary.

Realizing that 30 years ago the Vice President was making

$60,000-something while the President was making $200,000 and

today the Vice President is at $175,000, almost as much as the

President, it does seem like we need a little larger difference between the salary of the President and the Vice President than we

have currently.

Do you have any historical precedents to suggest that when the

President’s salary is increased all these other salaries are going to

shortly thereafter spiral upward as well? Or could we do something

to prevent that from happening to assure the public that that’s not

what is going to take place here.

Mr. RUSKIN. Well, I think that’s plainly the history here, that

once the Presidential salary goes up, so as well do other salaries,

maybe not exactly at the same time, but that’s clearly what is afoot

here. This is primarily, you could tell, an effort by the Federal

judges and some powerful Members of Congress to get a raise.

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I want to point out that, you know, congressional salaries are already so high that any increase in the congressional salary I think

brings a decrease in quality of Members of Congress, because you

get more and more people who are in it for the money as opposed

to in it for doing service.

I also want to note that many Members of Congress receive large

raises when they get to Congress. There was a study done in 1996

by the newspaper Roll Call that found that all but 6 of 73 newly

elected House members will receive large pay hikes when they take

office compared with their previous employment. During the last 10

years House Members gave themselves five pay raises, Senators

gave themselves six pay raises. Congressional salaries grew by

$47,200, which is more than $15,000 above inflation. In 1989 the

base congressional salary was $89,500 a year. It’s come a long way

from there. So given that history, Members of Congress don’t need

a raise, the President doesn’t need one either.

Mr. TURNER. Ms. Gressle, how do you respond to Mr. Ruskin’s

argument that the President’s salary serves as a salary cap and

that if we raise it then we’re going to see all these other salaries

follow right on up the ladder rapidly as well?

Ms. GRESSLE. I don’t know how rapidly you would see them go.

Mr. HORN. Please get the microphone directly in front of you.

Ms. GRESSLE. I think that it’s fair to say that if the President’s

salary is increased, then that provides an opportunity within which

the salaries for other Federal officials can be a little more flexible

in terms of a rise. I would not fear that there would be a grand

and rapid rise in the salaries of other Federal officials.

Congress is constantly faced with a political expedient in terms

of their own salary, and I think if there were nothing else to put

the brakes on that somewhat, that would serve.

As I recall, about the only time in history that you can look at

the President’s salary in conjunction with other Federal officials’

salaries all coming together in sort of a crisis point was in 1873,

when the President’s salary was increased. That was part of a larger pay increase for many, many Federal officials, and there was

quite extreme reaction to it. In fact, there was an attempt to decrease the President’s salary after that. And largely, as I understand it, the reason that they wanted to decrease the President’s

salary was because of the reaction they got to increasing the Members’ salaries at that time.

But in terms of if the President’s salary were increased today,

would everyone else’s salary take a rapid gain, I don’t think so. I

don’t think that it would happen any faster than it would just in

the normal automatic mechanisms in place under statute right

now.

Mr. TURNER. What do you think is primarily responsible for the

reluctance of the Congress—and I’ve only been here two terms—

but I noted in the last 6 years in 5 of those years the Congress has

received no pay increase and has declined even a cost of living adjustment. From your perspective, what do you think accounts for

the fact that the Congress seems to be even more sensitive in recent years to increasing its own pay than it has in years previous?

Ms. GRESSLE. A personal observation would be that it could very

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gress as an opportunity to serve and not one to which there should

be a great deal of monetary recompense. And that in combination

with, again, the political expediency of going to the constituents

and saying we’re going to be raising our salary. We’ve seen over

time that it’s difficult for Members to really explain what the costs

of serving in Washington are, in terms of the two domiciles that

they must maintain, the travel expenses and so on and so forth.

Some Members have lost their election because they bought into

a pay raise. You know, history proves that out. And so I think that

with political expediency, it is a very value-laden, shall we say, experience to raise a salary on the part of a Member of Congress. But

I think those two things encompass in combination one with another, help explain the hesitancy.

Mr. TURNER. Thank you, Mr. Chairman.

Mr. HORN. Thank you. And I now yield 5 minutes to Mr. Kanjorski for questioning.

Mr. KANJORSKI. Mr. Ruskin, your argument is interesting. Moral

force goes with lower salaries. You think if we were to do away

with any salary for the President it would make the office more respected?

Mr. RUSKIN. Absolutely not. I think that the President ought to

be paid. There are compelling reasons for the President to be paid

a fair salary so that they don’t fall prey to the highest bribery, and

that they’re paid enough so that we can attract the most honorable

people to the Presidency. So——

Mr. KANJORSKI. What do you think of the candidate who runs for

President and because they are independently wealthy they announce they will not accept a salary. That becomes very appealing

to the electorate people. They think they are getting something for

nothing. You think they really are getting something for nothing

when we allow people to politically mix the salary of the President

or the salary of a Member of Congress, whether they are going to

receive it or not. Would you prefer most Members of Congress to

have no salary?

Mr. RUSKIN. No, I think Members of Congress ought to be paid,

though I think they ought to take a pay cut. And I think it was

wrong——

Mr. KANJORSKI. Do you think they ought to take a pay cut now

or pay cut when they get elected to office?

Mr. RUSKIN. I think Members of Congress are overpaid right

now. I think $136,700 plus perks, pensions and benefits is too

much.

Mr. KANJORSKI. You are familiar with the practice of law. Would

you be aware of the fact that a 4-year member of a major law firm

in Washington DC, exceeds the salary of a Member of Congress or

Member of the Supreme Court? Would that surprise you or disappoint you?

Mr. RUSKIN. No, it doesn’t surprise me. The issue here is not the

respect that we pay to our Congress or to our President, but rather

the respect that the President and Members of Congress pay to the

taxpayers, who work exceedingly hard to fill the coffers of this Federal Government.

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Mr. KANJORSKI. I understand that perfectly well. Mr. Turner refers to the relationship of potential corruption and salaries. Do you

see a relationship there?

Mr. RUSKIN. Absolutely yes. That’s why we don’t want to pay our

Members of Congress or our President too little so that they would

fall prey to temptation of bribery. However, I don’t think that is a

problem with the Presidential salary right now. I don’t think you

can come up with evidence.

Mr. KANJORSKI. You made a point in your testimony to say that

there are a large number of people that would clearly come down

to Washington and serve as our President with the salary of

$200,000, and I tend to agree with you because it has nothing to

do with salary. But that is like an argument that there are an

awful lot of doctors that will perform brain surgery at a lower price

than a brain surgeon. Do you see the relationship?

Mr. RUSKIN. I don’t think so——

Mr. KANJORSKI [continuing]. Trying to attract to both the Presidency and to the judiciary and other high appointed and elected offices. Sometimes it is the best and the brightest if we can. And we

are competing with the private sector at different stages of people’s

lives. I tend to agree with you that if you want to fill the halls of

Congress with 28 and 30-year-old lawyers who are just getting

started in their profession, the salary of a Member of Congress appeals to them because it is about the same as what they would be

getting in a successful law practice. But if you are trying to get

members of the bar who are people in the private sector who

have—in their 40’s or 50’s who have now gone into a stage in life

where they are relatively successful, it would be highly unlikely. I

do not know that the chairman is, but we do have some former

presidents of universities here. I would tend to say there is not one

of those that has not had to take a significant decrease in salary.

And for the record will say that I still do not earn as a Member

of Congress what I did 15 years ago as a private practitioner in the

profession of law. You come up with these statistics that say all

Members of Congress are overpaid, and Presidents are potentially

overpaid, and appointed officials, I do not see that.

I see what’s happening is that those people who can afford to aspire to elective office, whether it be the Presidency or appointed office, whether it be a Cabinet position or something, they are being

constrained with their personal net worth and finances. If they are

independently wealthy, they have a much more likely opportunity

for putting in public service as opposed to if they are just average

people coming out of average walks of life.

And you’re not making a distinction there. I am sure Mr. Forbes

has no difficulty coming to the Presidency and accepting no salary,

as Mr. Kennedy did. But Mr. Truman would have a very difficult

opportunity to do that because he just did not have the personal

net worth to do that.

I remember when Mr. Eisenhower came to the Presidency the

Congress of the United States had to pass special legislation to

allow him not to pay taxes on his book so that he could get a commensurate amount of money to feel free to carry on the Office of

the Presidency, which I think is a 24 hour a day job. I do not think

I want the President worrying about his electric bill or his gas bill

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or his children’s tuition. I would prefer he would be worrying about

whether or not we are going to put planes in the air to bomb a

country or whether or not we’re going to attend to some emergency

in the country. You do not see those distinctions in your testimony.

Mr. RUSKIN. No, the main point that we’re trying to make here

is that, look, $200,000 a year, plus pension and other benefits is

a great deal of money. You know, I just don’t buy the theory that

the President is down and out on $200,000 a year and is in need

of some kind of dramatic raise. Just like I think that the, you

know, Members of Congress are not down and out on $136,700 a

year plus pension and perks and other benefits. So, you know, this

is just the fundamental.

Mr. KANJORSKI. Well, they are not down and out, but you want

your elected officials to be down and out?

Mr. RUSKIN. Absolutely not. But there’s no question that a Member of Congress earning $136,700 plus perks and pensions——

Mr. KANJORSKI. What are all these perks and pensions you are

talking about? I do not quite understand.

Mr. RUSKIN. For example, many Members of Congress retire with

pensions of $80,000, $90,000, $100,000 a year. Members of Congress get gifts, they get excellent medical benefits.

Mr. KANJORSKI. What gifts?

Mr. HORN. Wait a minute. You are not up on the laws, I guess.

Mr. KANJORSKI. Since 1989.

Mr. HORN. That is something that arouses me.

Mr. KANJORSKI. I hear these things roll out of your mouth. The

fact of the matter is, Members of Congress—I am going to address

Members of Congress because I think you brought that into the

issue. If a Member of Congress were in business in the United

States and didn’t have the restriction of a $3,000 a year tax writeoff, he could write off the cost of his living expenses in Washington

DC. He cannot do that. But if you as a business person came to

Washington and had a second home, you could write that off as a

business expense. So there is actually not a perk there, there is an

anti-perk. There is a denial of that expense.

Now, I know most Members of Congress have to expend $20 to

$25,000 a year to live in this community as a second home. You

do not put any value on that.

Mr. RUSKIN. Well, I think simply that $136,700 is a great deal

of money. And I just think that, you know, you all seem to exist

on a different planet. But back in planet America, $200,000 a year

or $136,700 plus generous benefits is——

Mr. KANJORSKI. Generous benefits, so that we can address that,

we have had the pension reform in Congress. To my knowledge

there is no one that can retire from Congress that served in the

last 10 years that could ever get $89,000 a year. It would take you,

what, 65 years service or something to get to that level.

So, I mean, I think it is important that we take some of the emotionally charged testimony as you have given today and comments

such as that out of the realm if we are really going to address this.

I do not think that I am suggesting that if we raise the President’s

salary, we are doing it to save him from hunger. I think it is very

essential that we send a message that the President of the United

States, who to my knowledge exercises the greatest power in the

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entire world, should be free of monetary considerations for his family and his household while he serves in the Office of President.

Certainly to compare him to the upper 1 percent of the population

of the United States is not unreasonable. Would you agree?

Mr. RUSKIN. To compare him to the upper——

Mr. KANJORSKI. The upper 1 percent of the population of the

United States. The upper 1 percent of the population of the United

States earns in excess of what the President of the United States

earns.

Mr. RUSKIN. Yes, but with benefits the President is well in the

upper 1 percent.

Mr. KANJORSKI. Are you talking about the retirement benefits?

Mr. RUSKIN. Well, retirement benefits you know plus the long list

of living——

Mr. KANJORSKI. Well, we could do away with that, Mr. Ruskin.

The point is when Mr. Truman was getting ready to retire and

these benefits were put into place, it was done for the purpose that

we would not have someone in poverty living in Independence, MO,

who was called the former President of the United States. The only

way you can overcome that, and quite frankly, most of the men

that occupy the Office of President, are multimillionaires. So that

they will be able to sustain themselves. But every now and then

we get a very talented person in America who the American people

desire to make President of the United States and he has to make

a terrible selection and decision, to spend 25 years of his life in

going after the Presidency, and foregoing personal wealth or to end

up without the benefits that we provide him, the minimum benefits

that he will put his family in poverty once he exercises the role of

being President of the United States. You don’t seem to put any relationship on that. I am trying to make it possible if we pass this

that someone like yourself could aspire to be President of the

United States.

Mr. RUSKIN. Well, I think you’re not talking about the reality

that I know. I mean, most people when they are President and

when they leave the Presidency they clearly have the opportunity

to become multimillionaires when they leave. In addition——

Mr. KANJORSKI [continuing]. I am glad you brought that point

up. Aren’t you annoyed that a President of the United States will

leave the Presidency and agree to make a $2 million speech, that

we may have to go and spend $3 or $4 million to guard his security

so that he could earn that $2 million? Wouldn’t it be much wiser

to pay him a sufficient salary and pension so he would not have

to engage in that type of opportunity? And potentially, or at least

for impressions, compromise his office position of the Presidency?

Wouldn’t you prefer that?

Mr. RUSKIN. Of course the Presidents and former Presidents

ought not to compromise their position. But given $200,000 a year

salary while they’re in office plus $152,000 pension while they’re

out of office, there should be no need for compromise.

Mr. HORN. The gentleman’s time has expired on the questions.

Are there any further comments from the ranking member?

Well, we thank you all for coming. We deeply appreciate it. We

will be asking the next panel some questions on compensation

which we would also like you to respond to, but given the shortage

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of time I think we’re going to do it by letter. And please file it. It

will go with the record either at this point or in panel three’s point,

because some of them are basic national comparisons to be made.

Thank you very much, all of you.

Panel three will come forward, please. Ms. Ferracone, Ms.

Weizmann, and Mr. Hofrichter..

If you would stand and raise your right hands.

[Witnesses sworn.]

Mr. HORN. The clerk will note that three witnesses have affirmed

the oath. And we will proceed with Ms. Robin Ferracone, chair of

the Executive Compensation Advisory Board of the American Compensation Association. Tell us a little bit about the organization

and then we all have your statements and we’ve all read them. If

you would like to summarize them, please feel free to. Because I

don’t want to hear them all read because we just don’t have the

time for it. But we want you to feel free to make your key points.

And then we would like to open it up to dialog of the Members with

you. So Ms. Ferracone.

STATEMENTS OF ROBIN FERRACONE, CHAIR, EXECUTIVE

COMPENSATION ADVISORY BOARD, AMERICAN COMPENSATION ASSOCIATION; JANE WEIZMANN, CONSULTANT, WATSON WYATT WORLDWIDE; AND DAVID HOFRICHTER, VICE

PRESIDENT AND MANAGING DIRECTOR, HAY GROUP

Ms. FERRACONE. Mr. Chairman, members of the committee,

thank you for the opportunity to address the issue. As you requested, I would like to start with a little background about the

American Compensation Association as a context for my remarks.

The association was founded in 1955. It’s an international association with more than 25,000 individual members. These members

design and administer employee compensation and benefits programs for their organizations.

Our membership includes compensation and benefits to professionals from Fortune 1000 companies as well as other organizations of all types, sizes and industries. And this includes people

from government entities as well as educational institutions.

The work of our members impacts the pay and benefits of every

employee in the United States and has significant impact beyond

our borders as well. The ACA is nonpartisan, a not for profit organization that does not lobby. It’s dedicated to maximizing the effectiveness of total rewards to enable people and their organizations

to achieve their full potential.

As a result, my testimony today is intended to provide information as a reference point for the subcommittee as you consider this

issue. It is not advocating for or against raising the President’s

pay. However, ACA is uniquely positioned to provide an objective

factual basis for your decisionmaking and consideration.

The first step that compensation professionals use in determining appropriate levels of compensation is to essentially establish a

pay philosophy and strategy. Typically this pay philosophy addresses such issues as external pay positioning to attract and retain

needed talents, fairness of pay or internal equity within the organization as well as a variety of other factors. And if we consider inVerDate 11-MAY-2000 07:09 Jul 21, 2000 Jkt 000000 PO 00000 Frm 00109 Fmt 6633 Sfmt 6633 C:\DOCS\62932.TXT HGOVREF1 PsN: HGOVREF1
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ternal equity you are faced with considerable compression, which

has been discussed today.

In the private sector, a CEO receives a salary of approximately

1.5 times the next highest paid position. Applying this multiple to

the Vice President’s salary, the President would need to earn approximately $260,000 a year to preserve this relationship.

The current compression between the President’s pay level and

that of senior officials is because the President’s salary has not

been adjusted since 1969. And as a reference point most organizations review their salary budgets annually to ensure that they remain current, competitive and equitable.

Each year for the past 25 years ACA has surveyed its members

to measure changes in salaries. ACA projected the values of the

President’s $200,000 salary today as if it had increased commensurate with other executive salaries from 1969 to 1999. Calculated on

this basis, the salary today would be slightly over $1 million.

ACA also projected the value of the $200,000 salary as if it had

kept pace with inflation, as measured by the Consumer Price

Index. And we calculate the salary would be about $935,000 today

calculated on this basis.

In addition, you may want to consider the external marketplace

for this position; for example, the pay of other world leaders or executives in the private sector. In the private sector, for your reference, the median salary for a CEO of a large U.S. company is approximately $1.15 million today.

When deciding compensation levels for any employee, including

the Nation’s chief executive, it’s also important to look at the total

package of compensation; that is, not only the financial package

but the indirect components of compensation as well or employee

benefits. Indirect compensation elements include protection programs such as insurance and retirement, pay for time not worked

such as paid vacations and employee services and perquisites such

as Air Force One or the White House. The many perquisites and

privileges while in the office as well as benefits should be factored

into the equation for the President. There is also the ‘‘psychic income’’ not found in many other jobs as well as the substantial future stream of income.

In conclusion, we consider—we encourage you to consider the following critical factors in evaluating the President’s salary: One, the

Federal Government’s pay philosophy; two, the internal equity of

the President’s pay relative to other senior Federal servants; three,

the erosion in value of the current salary during the past 30 years;

and four, the significant indirect compensation component available

to the incumbent in the position.

While these are important considerations, the position of the U.S.

President is clearly unique. Pay is a small component and there are

no formula solutions. Still the principles I have outlined today

should provide some useful guideposts. As an educational, not for

profit, objective entity, the American Compensation Association

would be pleased to provide additional information to help this

committee formulate an appropriate response to this challenging

issue. Thank you for your—for the opportunity to assist.

[The prepared statement of Ms. Ferracone follows:]

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Mr. HORN. Well, thank you. Because your data is very helpful to

us and we appreciate that, we’re assuming we’re going to have

some of the same from the next two witnesses. Ms. Jane Weizmann

is consultant to Watson Wyatt Worldwide.

Ms. WEIZMANN. Good afternoon.

Mr. HORN. Please put the microphone a little closer. It’s not your

fault. It’s just the way this hearing room was designed.

Ms. WEIZMANN. Thank you. Is that better?

Mr. HORN. Move it still closer. Great.

Ms. WEIZMANN. Thank you. This is indeed an honor and not typically, as an executive compensation and senior compensation consultant, something that I do often. But it has really caused me to

look at the congressional research information that you have assembled and the history and really put together what I believe to

be benchmark recommendations really in a rationale for determining appropriateness of pay of the President and senior officials.

Basically I’m here to present a rationale and really have four

broad categories of recommendations. First, I concur with all the

other testimony we’ve heard this afternoon. Presidential pay should

be set to be competitive with the level of accomplishment, status

and standard of living of similarly accomplished professionals. If

you use that as a guide, some of the ACA recommendations, you

then begin to stand back and say, then what are the benchmarks.

In thinking about benchmarking, how do you determine what is

the appropriate pay of similarly accomplished professionals. You

might begin to think about a proxy of benchmark occupations and

work against, perhaps, some pay level differentials, inflation indices, including the Consumer Price Index or the Employment

Change Index, to come up with a methodology against which to

gauge appropriateness of pay.

And from my own consulting experience and the issue I know

best, I’m here to say that I believe that to the extent that Presidential pay is set below competitive market levels, it does serve as

a cap to other Federal pay levels and truly does impede the attraction and retention of the talented not only elected officials, but career professionals that this country needs and deserves in the highest offices.

I would be here to say I believe that Federal pay levels are at

a national crisis point in terms of the ability to bring in the technical skills, know-how, and capability required of present day technology and required of the issues that they deal with.

Finally, the fourth point I would like to make is it seems counterproductive to put this in a political realm at the change of every

term. It’s very hard to separate this discussion from performance,

as I think ACA would also concur is one of the issues that often

goes into considering pay.

I would fully recommend that some methodology be established

as you go forward with considering this recommendation that uses

an index or a process by which you gauge change in the economy,

change in pay levels and therefore the appropriate recommendation

for future pay increases.

That basically concludes my testimony. Thank you.

[The prepared statement of Ms. Weizmann follows:]

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Mr. HORN. Well, thank you very much. Our last panelist on this

particular panel is Mr. David Hofrichter.

Mr. HOFRICHTER. Hofrichter.

Mr. HORN. Vice president and managing director of the Hay

Group. You might tell us a little bit about the Hay Group and what

the focus is.

Mr. HOFRICHTER. Thank you. Thank you, Mr. Chairman. It’s a

pleasure to be with you today. The Hay Group is one of the oldest

compensation consulting firms in the world. We operate through a

series of offices now in four countries around the world and conduct

some of the most comprehensive studies of executive as well as all

forms of compensation.

I think that you have the statement that we prepared. I think

that there are a couple of points I would like to reiterate and then

move to the recommendations. We approached this as something of

a consulting project. What would be the recommendations that we

would make to this body in looking at the data, and realizing that

this is, in fact, clearly a political situation.

We’ve all heard that if you took the CPI and moved it forward,

you would be looking at a salary in the neighborhood of $900,000.

If you took CEO pay and just applied those indicators to it, on just

base salary alone, you would be looking at approximately $1.2 million just on base salary.

When we look at CEO pay as a general kind of concept—and I

purposely in some of the data that I provided to you removed the

very largest corporations in the world, namely those over $10 billion, which is significant—the average remuneration for a CEO in

total is approximately $3.1 million. Now, that’s made up of a salary, of an annual incentive, of a long term incentive program, as

well as the benefits and perquisites.

Now, the importance of talking about that is relevant in this context. While it is clearly understood that people do not become the

President for money alone, it is on a measurable basis the largest

executive position in the entire world. On a measurable content

basis it’s larger than General Electric, Microsoft, et al, put together. So when we look at the complexities of doing the job, we

have to really understand what goes into it. And so while clearly

running the United States is not the same as running a public corporation, it is worthwhile to visit those numbers and to understand

what we’re talking about.

The movement of the salary of the President to the $400,000 to

$500,000 range is the equivalent of paying the President at the

10th to 25th percentile of a CEO running a $1 to $2 billion company.

Now, to put that in perspective, I mean, when we think about

the size and complexity of the United States, it dwarfs that size organization in every respect. So it’s an important avenue to look at.

Another thing has been—that has been discussed today—has

been the compression, and compression is a very real phenomenon.

And within the government there are jobs who of their own complexity, size, and contribution are worthy of $200,000 plus in their

own right today on a full-market value.

So the compression is a significant problem and it’s not just historical relationships that need to be looked at, it’s the fact that, you

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know, those jobs comparably found in other parts of the world

would be significantly—would be paid more.

Besides the disadvantage that that creates, there is also one rule

of thumb in compensation that has proven true. And that is that

the larger the compensation arrangements—and I understand

these have to be tempered by judgment and public will and so

forth—but the greater is the pool of the people with the right set

of competencies to do the job, and I think that’s an important consideration when we think about the highest office in the land.

So, in summary, we would like to recommend in our testimony

four points for consideration. One, that the movement to $400,000

be at least the minimum movement and we clearly could support

movement in the neighborhood of $500,000. $400,000 would be 45

percent of the current CPI adjusted rate and about 35 percent of

the real market adjusted rate. So we’re hardly making an egregious

adjustment over those 30 years.

The second piece of the testimony recommendation would be one

that was raised before, that this is a process that should be looked

at far more frequently. And we would recommend, again, that it be

reviewed once every 4 years. If possible we would even like to see

it reviewed earlier, but we understand the constraints on that, but

at least once every 4 years for two reasons. One is I think it would

certainly be more appropriate as a policy matter to do it that—in

that timeframe. And, second, I think the adjustments would start

to mirror a lot more what people have seen in their average paycheck, the general public as well.

The third issue is perhaps a little controversial, but that’s the

question of considering the uncoupling of other Federal pay rates

to that of the President. There is actually precedent in public service for that occurring. In my own city, my own hometown of Chicago, that was done a number of years ago so that the direct report

to the mayor could in fact be market priced, realizing the symbolic

nature of the role of mayor.

And last we think that a formal compensation review as outlined

by my colleague Ms. Ferracone from ACA where there would be a

statement of what is the particular compensation philosophy and

how do we move the entire Federal pay schedule in a more orderly

way, not just from a budget standpoint of how much is available,

but rather from a hard look at what is the market for the various

positions.

I thank you for your time.

[The prepared statement of Mr. Hofrichter follows:]

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Mr. HORN. Well, thank you. Let me start with a question for all

three of you. This is the question that I want to ask the previous

panel but we’ll do it in writing because we just didn’t have the

time. But, what is the relationship that ought to exist between

one’s salary during active years as a CEO or as President of the

United States and the retirement pay that follows that? Is there

any particular formula the private sector uses on this?

Mr. HOFRICHTER. In general we tend to see in the neighborhood

of 50 to 60 percent of final pay being represented in the retirement.

And that would be all in, meaning, you know, including social security as well as other forms of retirement benefit.

Mr. HORN. Ms. Weizmann, do you agree with that?

Ms. WEIZMANN. Yes, I would concur.

Ms. FERRACONE. I would as well.

Mr. HORN. OK. One of the questions, obviously, that comes up

in this situation, is the spouse. Spouses, if they’re female usually

outlive us all, but who knows what’s going to happen in the next

century, there will be several women Presidents, maybe they’ll all

be. And the question is what do you do with the spouse in terms

of retirement. That was the question that faced General Grant as

he wrote his last chapter of his memoirs to make sure his wife

could live at least in the semi-decent house that they had at the

time in New York.

Is that just the job of the retired CEO, usually male in this country, their worry and not the company’s worry? Any thoughts on

this?

Ms. FERRACONE. Well, many executive retirement programs provide for the spouse. So that retirement will apply not only to the

executive who served the company while he or she was alive but

also to the spouse, and it applies to a second-to-die kind of format.

In addition we also see life insurance policy benefits working this

way as well.

Mr. HORN. Ms. Weizmann.

Ms. WEIZMANN. That’s certainly a traditional way to follow and

certainly a good way to think about. I think that the uniqueness

of the position of being President of the United States and while

the spouse is not an employee, certainly is a figurehead and begins

to cause all of us to stand back and think that naturally some provision does need to be thought of. So in addition to the traditional

kind of coverages I would think it would be well in the purview of

the Congress to think through surviving benefits and what an appropriate standard of living would mean for a spouse of the President.

Mr. HORN. Let’s get two facts on the table. Presidential pensions

basically are at $151,800. That’s the pension not only for former

Presidents of the United States, but there’s also those pensions in

the judiciary and in the Vice Presidential situation.

Now, the Presidential widow, and there’s only one right now,

Lady Bird Johnson, is provided a $20,000 annual lifetime pension

and franking privileges. That’s one way to get your Christmas

cards out. I’m sure that’s appreciated. That doesn’t sound like too

much. Now, some are going to be millionaires in their own right,

some aren’t. And the question is given the duties that we impose

on the First Lady, and if there’s a First Man or gentleman or whatVerDate 11-MAY-2000 07:09 Jul 21, 2000 Jkt 000000 PO 00000 Frm 00135 Fmt 6633 Sfmt 6633 C:\DOCS\62932.TXT HGOVREF1 PsN: HGOVREF1
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ever in the next century, the fact is that that isn’t too much. Because we don’t pay them for 4 years. They give free work to the

people. And that is a tough job. There’s a lot of things to do in the

President’s chief of state role with all the foreign visitors and all

the rest and the spouses that have to be taken care of. And the

First Ladies have done a great job in this century. And that’s not

very much to solve some of the problems they might have in retirement. But I would be interested in any of the thoughts you might

have. Obviously, what goes with the person when they’re President

isn’t to be matched in retirement.

President Nixon as I remember dismissed the Secret Service

when he was in retirement and paid the Pinkertons out of his own

pocket and his royalties from memoirs and books and so forth.

We’ve had different millionaire situations, nonmillionaire situations. What we’re trying to do is get some rational way to think

about the compensation world. And that’s why you’re here because

you do that every day of your life. And so we would welcome any

thoughts. I now yield 5 or 10 minutes to the gentleman from Texas,

Mr. Turner, the ranking member.

Mr. TURNER. Thank you, Mr. Chairman. Ms. Ferracone, I believe

it was in your testimony when you applied the Consumer Price

Index to the President’s $200,000 salary which was set in 1969 and

you said that if the salary kept pace with the CPI, it would be

$935,000 today.

And I think one of your testimonies I think shared what the salary would be if it just kept up with executive compensation, it was

higher than that, by a little over $1 million. You know, this is a

difficult area. And I think every one of us here on this committee

and perhaps in the Congress still believe that serving the public office is public service. And therefore, we don’t really expect to apply

the traditional compensation schedules of CEO’s in the private sector to public service.

I thought it was interesting—and there’s a chart in one of your

testimonies that really broke down that the $3 million average

CEO salary and to the actual salary versus the benefits versus the

long term stock options or whatever. In this presentation actual

salary itself was about $600,000 or so.

Seems to me that perhaps the bottom line of what we’ve heard

today is that the President’s salary has not been raised in 30 years

and it deserves to be increased after that period of time. But how

we get to it, obviously the testimony you’ve offered to us is helpful,

and yet from a political perspective, in terms of trying to preserve

all of these offices as positions of public service, we are going to

temper that obviously with that concept as well.

Furthermore, what about a CEO’s earning capacity after they

leave the position? I believe that there was reference to the fact

that the President has some income potential after he leaves office

as well.

Am I correct, did one of you make reference to benefits after you

leave the position?

Mr. RUSKIN. I made reference to it, but didn’t quantify it.

Mr. TURNER. I see. And it seems to me that a President in some

cases may very well have substantial earning capacity through

publications of books, memoirs, and things like that; but I think

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the important thing for us to keep in mind is that, though we have

to respect the office and we understand that we must acknowledge

that the President is running a big business and deserves to be

compensated for it, it is still a position of public service, that we

want to somehow maintain that concept as well.

Now, I think you’ve been very helpful to provide us the analysis

that you’ve done. I get a little nervous when I see these numbers

about increases in CEO’s salaries over the last 30 years, so I sometimes wondered if they’re justified in terms of how they compare

with average workers’ pay increases during the same period of

time.

Mr. Chairman, I don’t have any specific questions, just those observations.

Mr. HORN. Before yielding to Mr. Kanjorski, I just wanted to

note the American Federation of Government Employees AFL–CIO

has given us a very interesting proposal as to the situation in the

civil service of—and the failure, really, to conform to the Federal

Employees Pay Comparability Act of 1990. And without objection,

it will go in the record at this point. I think we should look in our

final report on some of the interesting suggestions that group has

noted.

I’m also going to put in the record at this point a letter from Joseph A. Califano. He served in the Kennedy, Johnson, and Carter

administrations. And his comments will be available.

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Mr. HORN. I will also put in the record at this point a memo from

Gail Makinen, specialist in economic policy, government and finance division, Re: presidential pay. Gail Makinen is with the Congressional Research Service of the Library of Congress.

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Mr. HORN. We also have a letter here from Michael J. Lyle, the

general counsel in the executive Office of the President, Office of

Administration, and attached is Mark Lindsay’s statement to his

letter of transmittal on behalf of the executive Office of the President.

Let me just read the relevant amount here, where they note:

In the last 30 years the President’s salary has eroded significantly in relation to

the cost of living and salaries of other government officials. For example, if the

President’s 1969 salary had been adjusted to reflect increases in the Consumer Price

Index for urban consumers, the 1999 salary would be over $900,000.

Had the President’s salary been adjusted to reflect increases in the salary levels

of General Schedule employees in the Washington metropolitan area, the 1999 salary would be nearly $700,000. If the President’s salary had been adjusted to reflect

increases in the salary levels for Executive Level I employees . . .

Those are the Cabinet, the Director of Management and Budget, so

forth

the 1999 salary would be approximately $500,000. In fact, by 2003, assuming a

modest increase of 3.5 percent per year, the salaries of certain high-level government officials will exceed that of the President.

That point of course has been made by other witnesses.

And Mark Lindsay’s statement goes on here:

If the President’s salary is not increased before the next President takes office in

2001, the Constitution dictates it cannot be increased until January of 2005. By

then, the salaries of numerous other high-level government officials, such as Cabinet officials may begin to approach that of the President.

This is likely to exacerbate the existing salary compression for senior government

officials and judges, creating a disincentive to government service and reducing our

ability to attract and retain qualified individuals.

That, I might add, is a major concern in at least the last four

administrations in terms of trying to get someone who has experience, who has maturity, who has some wisdom and isn’t just out

of school. Are they going to give up everything and come to be a

Federal judge, one of the most important positions in our society?

We need to address that, and hopefully this situation will be addressed.

So he goes on to note:

Thus, given the erosion of the President’s salary over the past 30 years relative

to the cost of living and the wages of other government workers, we believe an increase is well warranted. More importantly, if not addressed now, this salary erosion and compression will likely spread to other senior government officials until we

are no longer able to attract and retain the most qualified individuals to government

service.

As I mentioned earlier, from my own experience in the late

1950’s, you try to staff an administration in the last year or 11⁄2

or 2 years and they say, ‘‘What, I’ve got to move to Washington?’’

and, you know, I really like to do that, Mr. President, Under Secretary, Assistant Secretary. Those are the people that make sure

the administration policies are carried out and are the ones that

run a good part of the Washington establishment. So we need to

realize what Presidents go through in that situation.

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Mr. HORN. And so now I yield 5 to 10 minutes to the gentleman

from Pennsylvania, Mr. Kanjorski.

Mr. KANJORSKI. Mr. Chairman, I want to congratulate you for

holding this hearing and taking this important issue up. I know

from some of the prior testimony that we have had there will be

some who will take advantage of this from a political standpoint or

from an emotional standpoint with the average citizen, because we

are talking about an unusual set of circumstances were caused to

consider that the $200,000 salary is not an acceptable salary.

But I think that the witnesses who have testified on this last

panel certainly are clear in their statement that if we were to compare this to anything in the private sector, we would be talking in

the seven figures quite clearly.

I would just like to make the observation that too often our constituents are not familiar with some of the problems of compression

and pay raises in our society. But most recently, I have had the

occasion to visit with some university leaders and national laboratory leaders; and some of the major problems that they are facing

is the departure of scientists and highly competent faculty members who, in some instances, are on pay schedules are actually paid

less than their graduating seniors that are going off to new jobs.

Our failure to recognize that or to attempt to socialize income at

that level is contradictory to our system. Our system is one that

compensates for capacity and ability. And it is competitive, using

salary as a competitive feature, not as much certainly in politics

and in public office; but I remember having the testimony of the

Chief Justice 1 day before our committee some 8 years ago, and he

was calling our attention to the fact that it’s extremely difficult to

serve as Chief Justice when your students that are under you and

writing are leaving their positions to go to a salary twice what you

are receiving as Chief Justice of the United States.

And at that time I think he called our attention to the fact that

Chief Justice was being paid less than 30 percent of the practicing

members of the bar in the United States. Keeping these things relative and in their proper perspective is extremely difficult. Again

I congratulate you and the majority for taking on what is considered a tough political issue in this time.

And I want to compliment the Members, not to delay them with

further questions; but the fact you came forward and gave us a perspective from the private sector is vitally important for us to have

to make a political decision. Thank you.

Mr. HORN. I thank the gentleman. And the fact is we will hear

a lot of demagoguery both within the House and without the

House, but that’s life.

Mr. Turner, do you have some closing questions?

Mr. TURNER. Well, thank you. It might be important to restate

what we have stated earlier and, that is, whatever the Congress

does to change the salary of the President—that $200,000 has been

in place since 1969—it would not be effective until the election of

a new President in 2001.

So with that, Mr. Chairman, I think this has been a very productive hearing, and we certainly have had a distinguished group of

witnesses on all three panels. And I thank the chairman for the

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manner in which the subject has been dealt with in such a thorough manner, and perhaps it has moved the discussion forward.

Thank you very much, Mr. Chairman.

Mr. HORN. Well, I thank you.

I’m going to insert in the record at this point a short history of

executive pay increases, which came from the Office of Personnel

Management, which many might remember was the Civil Service

Commission.

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Mr. HORN. But I also want to read portions of the very interesting statement from James F. Vivian, who could not make it here

today. He’s the author of the only book that we know on this subject, which is, ‘‘The President’s Salary: A Study in Constitutional

Declension,’’ 1789 to 1990, published in New York by the Garland

Publishers and he published that in 1993. And we really appreciate

his summary here.

And he notes the two—in part:

The two most recent revisions, those of 1949 and 1969, proceeded almost entirely

from the merits of the proposal. They served to strengthen the standing precedents

for doubling the existing salary, for retaining the separate travel/expense allowance

and for acknowledging the good will of the incumbent President towards the succeeding administration, regardless of its as yet unelected identity. Taken together,

the four revisions tend to suggest that certain minimum conditions must also obtain

among other minor observations. The supportive conditions include an ambiance of

economic prosperity, national self-confidence, the laggard value of the salary as

gauged by most familiar and ordinary standards, and the control of both Congress

and the executive by the same political party.

The absence of this latter condition went far toward explaining the declension

that had grown all too apparent, if not 1988, certainly by 1992. Never had the salary been of less importance.

Mr. Vivian concluded.

Never had the difference between it and the next highest salary been more narrow. Never have others’ salaries been proportionately higher in relation to it. A bipartisan consensus sufficient to overcome the obstacles inherent in an era of divided

government can prevail.

Should the proposed adjustment of the President’s salary to $400,000 gain congressional approval, as I trust it will, one of my principal theses will have been destroyed. No matter. History is more easily revised than the salary, it would seem.

There is, after all, a quite practical consideration looming. Without an upward revision, the Presidency continues risking the dilution of an important distinction,

namely, the preeminent compensation in the central government.

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Mr. HORN. We will also be asking Ms. Gressle to come back and

tell us a little bit about the salaries abroad. And we would just like

that, at this point, in the record and then we will close it out. What

we’re interested in is just some of the comparisons abroad. I know

some are a lot lower.

Ms. GRESSLE. Right.

Mr. HORN. But they are not the United States of America, and

some are higher and some are the same.

Ms. GRESSLE. Right. And we have no idea about the relationship

of the so-called perks of their salaries, for example whether they

have had housing. These data are based on a very informal telephone survey that was conducted a couple of weeks ago.

Those which exceed the President’s would be the chief executive

of Hong Kong at—the figures I will give you are converted to

United States dollars. So the chief executive in Hong Kong would

be $418,182 a year.

Mr. HORN. And that’s United States money, not Hong Kong?

Ms. GRESSLE. That’s right.

Mr. HORN. Yes.

Ms. GRESSLE. Japan, $381,000. Panama actually is lower, but it

is $180,000. We thought that was sort of an interesting figure.

Mr. HORN. Now those are both the chiefs of government, aren’t

they?

Ms. GRESSLE. The President of Panama and the Prime Minister

of Japan, that’s right.

Mr. HORN. And where is the President of the United States, chief

of state as well as chief of government?

Ms. GRESSLE. That’s correct. The prime minister in Singapore is

at $496,941 a year. The President of Taiwan is $303,500 a year. If

there are any others in which you are particularly interested—the

United Kingdom’s prime minister converts to $165,000 a year.

Mr. HORN. Well, that’s very helpful. And we’re going to put all

of your figures in the record at this point.

Ms. GRESSLE. Thank you.

Mr. HORN. Thank you so much.

We’ve heard some very compelling testimony that has been supportive of raising the pay of the President of the United States.

Clearly it would be impossible to compensate adequately any man

or woman who will next hold the most powerful and difficult job

in the United States, indeed, in the world.

The fact is that the last pay raise for a President of the United

States was in 1969. Surely few corporate chief executives would accept such compensation.

I agree with many of our witnesses, however, that such comparisons may not be relevant. Few seek the Office of President for its

generous salary, because it isn’t that generous; and many others

could, if they’re interested in money, go, as was suggested in the

private sector or other places. Nevertheless, being a millionaire is

not a constitutionally endorsed requirement for Presidential candidates. Although a lot are simply for what was brought up by

many witnesses that increasingly we have millionaires running for

office, and that’s fine. Everybody has got a right to run.

But the fact is that they don’t need the salary, but the ones that

aren’t millionaires, and if they win, they need it; if they don’t win,

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they don’t need it. And we just should be equalizing the amount

of competition in our society, by having an appropriate, fair reasonable effective salary for the President of the United States, so they

don’t have to try to pull any punches while they’re President at

least, and that’s why I stress the retirement.

It seems to me when you go around sort of begging for Presidential library money while you’re still President of the United

States, that you might well favor the millionaires that are going to

give you a million and that bothers me, and that’s why I suggested

earlier that maybe the retirement ought to be adequate so that you

don’t have to go on boards and all the rest of it to try to recoup

what it has cost you over the years.

Presidents, regardless of their personal income, ought to be able

to independently and adequately support their families—and needless to say a few college tuitions were mentioned here today.

But, it is a very real problem when, as the current President has

a child going to a prestigious school that does not come cheap.

So let me just thank now those who have prepared this hearing:

J. Russell George, he’s our staff director and chief counsel; Matthew Ebert, policy advisor, down at the end of the bench there. And

Bonnie Heald, the director of communications, Mason Alinger, the

clerk; and for the Democratic side, Faith Weiss, counsel; and Julia

Thomas, who is our court reporter, as is Cindy Sebo.

And with that, I thank you all on this panel. And with that, we

are adjourned.

[Whereupon, at 4:47 p.m., the subcommittee was adjourned.]

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