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Backgrounder #744

December 14, 1989

Congress vs. America: How Congress Raises Its Own Pay


(Archived document, may contain errors)

744 December 14,1989 CONGRESS VS. AMEXICk HOW CONGRESS RAISES ITS OWN PAY INTRODUCTION only ten months after an avalanche of public opposition blocked its fifty percent pay raise plan, Congress successfully engineered a sizeable pay hike for itself in the waning moments of the 1989 congressional session. It was a bipartisan, midnight raid on theTreasury, passed under the guise of congressional ethics r e form and it will eventually cost taxpayers more than 100 million annually? It will lift the salaries of House members to 125,0oO per year by 1991, a 40 percent raise, and of Senate members to 98,000 per year, a 10 percent raise. With the pay boost, United States legislators will now receive a larger pay check than 98 percent of American workers. House members will earn four times more than the median income American wage earner. Moreover, more than 300 legislators would be elevated to the ranks of pension m illionaires when they retire Unjustifiable Method. A case can be made, of course, thatthe 535 women and men who make the nation's laws deserve to be among the top 2 percent 1 This pay raise was a provision of the "Government Ethics Reform Act of 1989 2 Na t ional Taxpayers Union Not theTime to Raise Congressional Salaries," Washington, D.C 1989 3 This means that legislators' lifetime retirement pensions will exceed $1 million. See National Taxpayers Union Congress to Become Pension Millionaires Club If Pay R a ise Approved Press Release, November 15 1989. of the nations wage earners. What cannot be justified is the way that Con gress raises its salaries. Were the executive branch or businesses or private in dividuals to act in a similar way, they would be unive rsally denounced (surely by members of Congress) and probably tossed into jail. The way that Democrats and Republicans in Congress enacted and intend to depd their pay hikes once again demonstrates that it is Congress vs. America.

Many Americans justifiabl y are outraged by the clandestine methods Con gress used to secure this pay hike.The details of the pay raise package were kept secret until less than 24 hours before lawmakers voted on it.They did this as dictatorial regimes worldwide would, to mute publ i c opposition to their salary grab. Debate in the House was limited to just two hours. After the House approved the bill, more than a dozen high ranking House members marched to the Senate to press their upper chamber colleagues to follow suit or as it is p ut by Roll Call, a weekly journal that monitors Congress, mobbing their colleagues in the cloak room and on the Senate floor To secure the pay raise, the Senate even unashamedly waived a rule of the budget act prohibiting introduction of bills that would i ncrease the deficit. Observed one high ranking Senate aide: If Congressmen worked half as hard to reduce the deficit as they di to pass this pay increase, we would surely have a balanced budget by now 4 Keeping Voters in the Dark The Star Chamber proceedi n gs to pass the pay hike were bad enough. Much worse is the agreement between Democrat and GOP congressional leaders to form a pact to prevent Americas voters from learning the truth about the pay hikes.They promised each other that they would not make an i ssue of the hikes in next years congressional election campaigns. In effect, the two parties are conspiring to choke off any political opposition to the pay raise. The Democratic and Republican Congressional Campaign Committees have agreed tentatively to w ithhold campaign funds from challengers in the 1990 elections who criticize an incumbent for voting for the pay raise. According to a written agreement known as the non-aggres sion pact (inadvertantly conjuring up the image of the Hitler-Stalin Pact signe d by top leaders of both parties: The vote on [this bill] is not an ap propriate point of criticism in the coming campaigns. We will publicly oppose the use of this issue in any campaign in the 1990 cycle. This incumbency 4 Gordon S. Jones and John A. Mar& eds The Imprial C3ngess: clisis in the Se-h of Powers (New York Pharos Books, 1989 Mark B. Liedl and Douglas A. Jeffrey, Congressional Ethics and the Admhktrative State, Heritage Foundation Backpunder No. 743, December 13,1989, Senator Pete Wilson The Con gressional Frank A Simple Case of Abuse, Herirurge Lectum No. 221, September 29,1989, Mark B.

Lied ThereThey Go Again: Congresss Double Standard on Disabled Americans, Heritage Foundation l3ecufive Memomndum No. 254, October 23,1989 5 Roll Call, November 2 7,1989, p. 37 6 Non-Aggression Pact Wont Halt Pay Raise, Roll Wl, November 27,1989, p. 1 2 protection measure suggests that legislators descend to an even lower level of ethical conduct in order to avoid the risk of losing what they insist are severely un d erpaid jobs avert political accountability for the pay raise vote, taxpayers are already beginning to rebel en masse. A poll conducted last month by the Wirthlin Group finds that 77 percent of the public "disapprove" of the salary in crease? Many citizens groups throughout the country are mobilizing to seek the immediate repeal of the pay hike. Says Alan Keyes, an Assistant Secretary of State in the Reagan Administration and now president of the Citizens Against Government Waste: "Americans don't believe C o ngress deserves a raise because they don't believe Congress is doing a good job.'a The fatal conceit of members of Congress, and their 38,000 member staff is that they have come to regard automatic boosts in pay as entitlements. Not a single legislator, d u ring the House or Senate debate, pointed to recent con gressional accomplishments as a justification for the pay boost. This is not surprising. The pay raise is being awarded the same year that 47 mem ers of Congress have been charged with or convicted of ethical misconduct. It comes in a year that Congress missed all of its budget deadlines and will spend some 16 billion more than is permitted under the Gramm-Rudman Hollings budget deficit targets Objective Standard. In the private sector, by contrast, pa y raises are awarded for productivity improvements and better overall company perfor mance. Today an estimated 70 percent of Americans work under some type of merit pay or profit-sharing scheme. Several recent studies have docu mented that performance base d ay can boost employee productivity by 5 percent to 10 percent per yew.

Before Congress receives a penny of its pay raise, therefore, it should be placed under the same type of pay for performance standards that have been adopted successfully by private e mployers. The Gramm-Rudman-Hollings GRH) deficit reduction targets provide just such an objective standard for assessing Congress's performance. Congress should receive its pay raise only if at the end of the fiscal year it has met its self-imposed defici t ceilings. If tar gets are not met, it is reasonable for taxpayers to conclude that Congress has Grass Roots Opposition. Despite these elaborate defense mechanisms to B lop 7 The poll found that 60 percent of Americans "strongly disapprove" of the measurz and 17 percent somewhat disapprove Ibid p. 34 8 "Keyes Urges Anti-Waste Performance Pay for Congress Citizens Against Government Waste, Press Release, September 28,1989 9 Roll Call, op. cit p. 36 10 Daniel Mitchell, David Lewin, and Edward E. Lawler Alter n ative Pay Systems, Firm Performance and Productivity," Brookings Discussion Papers, 1989, Tom Peters, A Pussion for Excellence (New York Warner Books, 1989 Corey Rosen and Michael Quarrey How Well Are BOPS Working Hatvard Business Review September-October 1987, Martin L Weitzman and Douglas L Kruse Profit Sharing and Productivity,"

Brookbgs Discussion Papers in Economics, February 1989 3 not done its job, and that members pay should stay frozen, or perhaps even be cut somewhat.

Lawmakers should adopt a pa y-for-performance plan early next year when the congressional pay increase and honoraria ban issues are expected to be revisited. Congress should also at that time publicly repudiate the non-aggres sion pact designed solely to shield legislators from poli tical accountability for their actions. Senator Don Nickles, the Oklahoma Republican who chairs the National Republican Senatorial Committee has refused to participate in this pact.

The overwhelming public opposition to raising congressional pay is an un m istakable signal of Americans displeasure with the performance of Con gress as an institution. Taxpayers rightly do not believe they are receiving value for their money from the legislative branch. Only when lawmakers start to eliminate wasteful spending a nd discipline themselves to comply with their self-imposed Gram-Rudman-Hollings deficit reduction timetable that is supposed to achieve a balanced budget by 1993 will taxpayers regard a con gressional pay raise as money well spent CONGRESSIONAL PAETWO CEN T URIES OF CONTROVERSY Congresss current efforts to deflect public criticism from the hefty pay raise it has voted itself are understandable. Since 1789, when Congress set its first rate of compensation at $6 per day in session, and was soundly rebuked for i ts rofligacy, Congress has increased its pay only at its own political Indeed, the public has a long history of hostility toward large congressional pay raises of the magnitude that the House has just awarded itself. When in 1816 the legislature voted its first pay raise, a 60 percent increase, it ignited a massive public protest. According to a history of the pay raise issue prepared by Congmwwnal QumterZy: In Georgia members who supported the increase were burned in effigy. Nashville residents demanded t h at every member of theTennessee delegation who voted for the raise vacate his seat.12 In all voters in eight states replaced all or most of their Representatives in the 1816 elections Avoiding Responsibility. Even greater political fallout resulted from a n eleventh hour 50 percent congressional pay raise passed on the last day of the 1873 session. This highly unpopular congressional action, which was immedi ately dubbed the Republican salary grab, was an important factor in the defeat of 96 incumbent Repub lican House members in 1874 and a turnover of House control back to the Democrats peril 1P 11 For a thorough review of the congressional pay raise issue over the last two centuries see: Raising Members Pay: The Two Hundred Year Dilemma, Conpssionul

mer Fe bruary 4,1989, pp. 209-212 12 Bid 4 Because of this substantial historical voter resistance to congressional pay raises, Congress in recent decades has attempted to insulate itself from responsibility for inflating its own pay. Legislators have created in d e pendent commissions and given them instructions to make studies that in evitably result in recommendations for pay hikes.They have relied on the White House to lend credibility to pay measures and to quiet public opposi tion. In 1987 they even devised a n elaborate voting procedure whereby a 15 percent pay raise went into effect even after a majority of members officially vote against it, thus allowing lawmakers to tell angry constituents they op posed the xneasure.13 This spawned the cynical slogan: Vote no and take the dough Ethics for Sale? In January 1989, legislators hopes of a 51 percent pay hike were squashed by a surge of voter protest.Tens of thousands of Americans sent to their representatives tea bags, reminders of the Boston Tea Party, with a c oncise message attached: Read my lips: no pay raise.

This forced Congess to back down, but not for long. In early fall, congres sional leaders began planning for another attempt at a pay hike.Their aim obviously, was to avoid the public outrage that had su nk their earlier attempt Thus they intentionally rammed the new pay hike through both the House and Senate before organized public opposition could be mounted. Within three days of the public release of the pay package, the bill was enacted into law. Pass a ge of this legislative lightening bolt was further facilitated by the shrewd ploy of linking the pay raise to ethics reform The result: legislators can say that their higher salary is part of a cleaner government measure. This defense is questionable, how e ver, since several urgent congressional ethics reforms were omitted from the package.14 In addition, there was no justifica tion for attaching a pay raise to this reform package. Senator Jesse Helms the North Carolina Republican and a vigorous opponent of the pay hike chided his colleagues for this ethics charade by stating We are saying that this ethics bill is so important that we had to vote for it even though it just happen to rovide a 35 percent pay hike But since when are ethics for sale?

Then, to avoid the political penalty of their deeds, congressional leaders of both parties agreed privately to their version of the Hitler-Stalin non-aggres sion pact. In essence, they will avoid making the pay raise a political issue in the 1990 congress i onal elections and will attempt to withhold campaign funds dP 13 Even this political insulating mechanism proved only marginally successhl. Many political analysts believe Senator John Melcher of Montana lost his seat in the 1988 election because he voted for the 1987 pay raise 14 Although the bill contains some ethics reforms, including restrictions on honoraria income, other questionable congressional practices will continue. For instance, lawmakers rejected an amendment to repeal immediately the grandfa t her clause of the 1971 Federal Election Cam- Act.This allows legislators to spend unused campaign contributions for their personal use.The total amount this unspent war chest may be over $35 million. If Representative Dan Rostenkowski, the Illinois Democr a t, for instance, were to retire next year, he could walk away with more than $1 million in leftover campaign contributions. See Benefits Ease Path of Congressional Retirees, The Washington Post, February 6,1989 15 Congressional Qumerty, November 17,1989, p . 15947 5 from members of their parties who address this issue. This attempt to stifle political free speech for personal gain further demonstrates that these mem bers are unworthy of the pay increase.This attempt by both parties to create a political mon o poly on the pay issue and to force out of the electoral process all other competitors is blatantly anti-democratic ARE U.S. CONGRESSMEN UNDERPAID Supporters of the congressional pay raise argue that to attract qualified people to serve in government and t o keep them there, they must be paid a fair salary.There is some merit to this argument. It is true, for example, that legislators have expenses not incurred by the typical American family, be cause they must maintain homes in Washington and in their home d istrictor state.There is also some truth -but not much to the argument that if con gressional salaries are not generous, only independently wealthy individuals will be able to afford to hold office An argument thus can be made that Congress is underpaid. A stronger case, however can be made refuting this. Figure 1 shows congressional pay adjusted for iha tion since 1900 Legislative pay without the in crease in compen sation is already about 5 percent above the average for this period. In none of these elec tion years has America failed to attract good people to Congress.

During the 1980s furthermore, a period when budget deficits ex ploded- into triple digits, congres sional pay out Figure 1 Congressional Pay Adjusted for Inflation, 1910-1990 140 I 120 T 10 0 h 80 a 0 a 60 40 20 0 1010 lQ2O 1930 1Q40 IQW 1Q6 paced idlati n by 14 percent.l'Today, legislators make three times more than the average American family, and this will rise to almost four times more for House mem 16 "Not the Time to Rake Congressional Salaries op. cil 6 bers once the pay raise takes effect. In fact, just the House pay raise itself is more money then the typical American earns. In addition to their salaries members of Congress receive many additional fringe benefits. Example an al lowan c e for frequent travel back from Washington tol,heir home districts, a large staff, mailing privileges, and lucrative pensions. With the pay raise many congressional members will receive pension benefits of more than loO,O00 a year when they retire Low Tur n over. In the private sector a principal determinant of whether workers are receiving ample compensation is the quit rate or percentage of people leaving their jobs voluntarily. If turnover is high in an occupation or at a given firm, this is a powerful ma r ket signal that pay rates may be too low to retain good workers. In the private sector, across industries, the voluntary quit rate is about 10 percent. In the Congress the voluntary quit rate, or the percentage of members resigning, is about 5.5 percent a t the end of each term, or less than 3 percent per year.18 The National Taxpayers Union reports that only 15 of 535 members of Congress voluntarily quit politics this election cycle, and f w if any of these 15 cited pay as a major cause of their decision t o retire. 18 Assured tenure in Congress, moreover, is rising. According to the Etd Statistics on Congress, today a higher percentage of House members have been in Congress for more than I ht ears than at any period since 1950 the last year data were provid ed. Today 72 percent of House members are in at least their fourth term compared to only 55 percent in the early 1950s.

Clearly, the low pay legislators complain of is not inducing members to leave.

The low turnover in Congress has prompted some, including Nobel laureate economist Milton Friedman, to call for a maximum number of terms for Con gress.

Permanent Ruling Class. Those who argue that a congressional pay raise is good government, fail to see that a combination of high pay, prestige, and perks giv en to members of the U.S. Congress has promoted in the House of Representatives, at least, the cha ber that is intended to be the closest to the people -a permanent ruling class. Furthermore, it is not low pay but the stratospheric cost of running a succe s sful campaign for Congress that keeps moderate income Americans from running. In 1988golitical action commit tees gave $132 million to congressional candidates, and 87 percent of this went to incumbents. Curiously, campaign finance reform was not part of t he ethics reform accompanying the pay raise 31 17 The National Taxpayers Union estimates these perks to be worth more than SO,W per year for each legislator. Ibid 18 Some of those who quit the House did so only to run for the Senate. Norman J. Omstein,Tho m as E. Mann and Michael J. Malbin, viral StorisriCS on Congms (Washington, D.C American Enterprise Institute, 1989-90 19 Not theTime to Raise Congressional Salaries, op. cit 20 Ibid., pp. 17-18 21 Jones and Marhi, op. cit 22 Orstein, Mann, and Malbin, op. c if p. 99 7 Based upon recent congressional performance, lawmakers would not seem to warrant a raise. Public opinion polls since 1985 have ranke the federal budget deficit one of the single greatest threats to the nation! Yet Congress has managed to balanc e the budget only once since 19

60. Since 1985 it has never met its Gramm-Rudman-Hollings targets. And since 1980 the size of the national debt has tripled. On November 7, Congress was forced to raise the debt ceiling to 3.12 trillion, a revealing testimon y to its failure to control federal red ink. Undaunted, three days later, House members voted themsel ves their 40 percent raise. Ironically, Congress had to waive a provision of the Budget Act which disallows bills that would increase federal red ink in o rder to boost its salary A PRIVATE SECTOR SOLUTION MERIT-BASED PAY The 1980s has witnessed a resurgence in America in the concept of merit based pay for workers, as private industry has been forced to improve its global competitiveness. Last year, the pay of some 70 percent of private sec tor American workers was tied directly to individual productivity and cor porate profitability.24 These pay-for-performance schemes include: merit raises, bonuses, commissions, and various forms of profit sharing. The num ber of employee stock ownership plans (BOPS), for example, has grown from 6,000 in 1982 to 10,000 in 19

89. Over this period the number of employees partipting in ESOPS has doubled from less than 5 million to al most 11 million programs among U.S. employe rs is that they work. According toTom Peters co-author of In Search for Excellence: Lessonsj?om America's Best Run Com panies Em loyee incentives are the key to quality and productivity in the workplace Over the past decade, many of America's most profita b le cor porations including Ford Motor Company, Hewlett-Packard, Proctor Gamble, and Bell Atlantic have adopted pay for performance standards. At Avis Rent-A-Car operating profits leaped by 35 percent the year after employees took over 100 percent ownershi p. Ford's profit sharing program introduced in 1983 in combination with other cost cutting strategies, reversed 1 billion a year losses from 1979-1982 to $3 billion per year profits from 1985 to 19

87. Last year high worker productivity at Ford triggered p rofit sharing bonuses of $2,800 per worker The primary reason for the rise in popularity of incentive-based pay 23 Public Opinion, July-August 1988, pp. 34-35. 24 This figure is based on recent business surveys. See "Grading Merit Pay Newsweek, November 1 4 ,1988 25 "E!3OPS: Are They Good for You Business Week, May 15,1989, pp. 116-123 26 Thomas J. Peters Rediscovering Productivity's Secret US. News World Repori, February 17,1986, p. 50 27 "Can Ford Stay OnTop Business Week, September 28,1987, pp. 78-86 pp. 4 5-46 8 Responding to Incentives. Several careful studies document that linking worker compensation to worker output promotes higher rates of employee productivity and corporate profitability. Economists Martin Weitzman of the Massachusetts Institute of Te c hnology and Douglas L Kruse of Rutgers University reviewed fifteen studies on the effects of incentive pay and found in each a positive link between profit sharing and productivity.28 This was confirmed in a 1989 study by a UCLA team headed by economist D aniel Mitchell that found productivity to be 5 percent to lgercent higher in firm with profit sharing than those without incentive pay.

Clearly workers do respond to incentives. There is no reason to think that Congress is exempt from these productivity-en hancing effects A PAY-FOR-PERFORMANCE PIAN FOR CONGRESS Past Proposals The idea of linking congressional pay to results is not new. In the early 196Os, then Representative William Brock, the Tennessee Republican, intro duced legislation tying legislative p ay to the level of spending cuts in the budget passed by Congress The act was quickly dismissed by Congress and never voted on. In 1982, the year federal deficit spending first surpassed the 100 billion mark, then-Heritage Foundation John M. Olin Senior F e llow Richard B. McKenzie proposed a Deficit Reduction Pay Schedule for Con- gress30 This pay schedule was designed to give members of Congress a sub stantial personal financial incentive for cutting federal red ink. For instance if members cut the budget i n half, their pay would rise to $175,000 per year. If they balanced the budget they would be awarded a 500,000 paycheck Dampened Momentum. In the 100th Congress, then-Representative Dan Lungren, the California Republican, introduced legislation, the Pay f o r Per formance Act, to cancel congressional pay in any year that the legislature failed to pass each of its 13 appropriations bills separately and on time. This innovative proposal was presented in the wake of seven straight years of Con gress wrapping it s budget bills into a single year-end, take-it-or-leave-it, half trillion dollar continuing resolution. This pay-for-performance bill dampened the momentum of the January 1989 pay raise plan, but was never adopted.

Most recently, Citizens Against Governmen t Waste a Washington-based citizens group whose objective is to promote the budget-saving recommenda tions of the 1983 Grace Commission, called this September for merit pay for Congress. It suggests a performance salary review commission to certify 28 Wei t zman and Kruse, op. cit p. 48 29 Mitchell, op. cit 30 Richard B. McKenbe, Incentives for a Balanced Budget, Heritage Foundation Buckpunder No. 207 August 27,1982 9 that waste is being eliminated from the budget, before any congressional pay raise would ta ke effect The Gramm-Rudman-Hollings Pay-for-Performance Plan linked to a clearly observable, meaningful, and objective goal. For Congress such a goal exists: meeting annual Gramm-Rudman-Hollings (GRH) deficit cutting targets.

Under this kind of merit-based pay scheme, congressional pay raises would be awarded when Congress complies with its lawful responsibility of cutting spending to reach GRH targets. At the end of each fiscal year, the Congres sional Budget Office CBO) or the Office of Management and Bu d get OMB) could calculate the official budget deficit for the year just ended. If the recorded budget deficit exceeds the GRH deficit ceiling for that year by more than the allowable $10 billion margin of error, Congresss pay would be frozen or even cut. I f Congress succeeds in cutting the deficit as required by the budget law, a 10 percent pay raise would be awarded. From the taxpayers perspective, this would be money well spent.

This pay plan not only would force Congress to earn its pay raises; it also would have the added benefit of restoring the integrity of the GRH process To be sure, the GRH budget law has been a major success for the taxpayer.

Since it took effect the budget deficit has plummeted from $221 billion, or 6 percent of gross national pro duct (GNP) in 1986, to $152 billion or 3 percent of GNP in 1989.The deficit in 1989 was some $100 billion below what the Congressional Budget Office had projected it would be at this time before the budget law was enacted Budget Tricks. Yet Congress and t h e White House have sought to circum vent the deficit targets through accounting gimmicks, such as moving programs off budget, and by relying on unrealistic economic projections in forecasting the deficit?l As a result of these budget tricks, deficits have broken through GRH ceilings by an average of $W billion per year (see fig ure 2 The GRH pay-for-performance plan repairs the defects in the budget law.

It restores legislative accountability because if Congress fails to reduce the ac tual (not the projected) deficit as the law mandates, legislators are punished with a freeze in their pay. This would force legislators to keep a vigilant eye on spending an d the deficit target during the course of the year. It would dis courage budget-busting supplemental appropriations bills and fourth quarter spending, and it would encourage money saving program rescissions -that is cancelling appropriated program funding, to trim spending below the limit To avoid the off-budget trick, the pay-for-performance plan might include a second enforcement mechanism that would disallow a pay raise if the na Private sector pay-for-performance plans are most successful when they are 3 1 Stephen Moore, Congresss Dirty Dozen: Budget Process Horror Stories, Heritage Foundation Backpounder No. 602, September 10,1987 10 would disallow a pay raise if the national debt rose by more than permitted under Gramm Rudman-Holl- ings.Inshort, the pro posal would build renewed dis cipline into the chaos of the cur rent budget process.

Congress will have several op portunities to adopt this Gram-Rud man-Hollings pay-for-perfor These include mance plan Figure 2 Gramm-Rudman-Hollings The Legacy of Missed T argets B 1 I I 200 4 Jj5g 150 1 100 0 D50 1 .o I a 1988 1887 1988. 1989 199O r 6 I Dellclt Target Actual Dcflclt Ib. ddMl tAlw wmn ndd Lo IDn. unbr Lb In January the House will be pressured to scale down its pay raise to the level approved by the Senate I n the Senate several lawmakers, including Democrat Timothy Wirth from Colorado, have vowed to force a vote to ban honoraria. At that time, the pay issue will resurface Both chambers will address budget reform in the spring of 19

90. A top agenda item will be strengthening enforcement of the Gramm-Rudman Hollings law. Congress could institute the pay-for-performance plan at this time CONCLUSION Opinion polls reveal that the American public now holds Congress in low esteem. Only 20 percent of Americans now h ave high confidence in Congress according to a July 1989 Louis Harris and Associates survey. It is no wonder.

This past year the institution has been under siege. Senior citizens revolted after Congress imposed a sizeable tax increase on them to pay for ca tastrophic health insurance benefits they did not need or want. Ethics viola tions have forced House leaders to resign. Several other prominent Senate and House members have been implicated in the multi-billion dollar scandals at the Department of Housing and Urban Development and in the savings and loan industry crisis. And Congress again has veered far off the Gramm 11 Rudman-Hollings track that is supposed to lead to a balanced budget by 1993.

Restoring Discipline and Accountability. Oblivious to public disdain, most members of Congress firmly believe they are entitled to their 40 percent pay raise. In the private sector the American workers who pay these legislators salaries do not receive pay raises by entitlement or an act of law. They earn them. It seems inconceivable that any private corporation wallowing in bil lions of dollars in debt would reward its management team with a 40 percent across-the-board pay raise.

Within the walls of Congress, pay for performance would certainly be a revolutionary and unwelcome concept. But it might be a significant step in restoring fiscal discipline and accountability to Capitol Hill.

Stephen Moore Grover M. Hermann Fellow in Federal Budgetary Affairs I Heritage Foundation research intern Brian C. Clark assisted with this study 12

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