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October 21, 2014

A Case for Moran: ‘Underpaid’ Is Accurate

moran003 011514 445x298 A Case for Moran: Underpaid Is Accurate

(Tom Williams/CQ Roll Call File Photo)

He’s sounding politically tone deaf, of course, but on the merits Rep. James P. Moran has a solid case to make about congressional compensation.

Social media lit up with ridicule for the suburban Virginia Democrat last week, after he boldly told my colleague Hannah Hess, “The American people should know the members of Congress are underpaid.”

It’s a call to arms that someone running for re-election, even in the safest district, would be a fool to make at a time when the institution’s approval rating stands at a near-record-low 15 percent and the median household income in the United States is less than one-third of a member’s annual salary of $174,000.

Which is why, amid all the howling about how Moran should have his head examined (right after he’s impeached), there’s been precious little interest in understanding the justifiable reasons for such a provocative complaint, let alone what the congressman would do to improve the situation.

“The fact is that this is the board of directors for the largest economic entity in the world,” Moran declared about Congress, which he is leaving voluntarily at the end of this year after a 24-year run. And it’s tough to argue with that much: House members and senators are the ultimate deciders of the federal budget, which at $3.9 trillion for the coming year will account for 23 percent of the gross domestic product. No entire industry, let alone any single corporation, comes as close to having that sort of economic sway.

(See another take over at Newsroom Confidential: Hey, Congress: This Might be Why They Hate You)

But the members get paid less than half what the president makes ($400,000 has been the chief executive’s fixed salary since 2001). They’re also compensated below the average salaries for physicians and surgeons ($192,000), business executives ($178,000) and bankers ($175,000), according to Labor Department data current as of 11 months ago. (Since these are averages, that means about half the people in these jobs make more than those amounts, and a 2011 study concluded that $9.6 million was the average compensation for the head of a publicly traded company.)

Labor doesn’t track “lobbyists” or “trade association executives” as distinct job categories, but it’s a safe bet that many of the people who spend their lives advocating on Capitol Hill get paid a whole lot more than the people they are importuning.

If you believe compensation should track comparative power, then one way to guard against government corruption is to make sure the people charged with making decisions can have a standard of living that’s comparable to the people trying to influence those decisions.

Beyond that, consider that a defining characteristic of solid citizens is that they don’t lambaste their elected officials for doing things they do themselves. Millions of Americans make the case every year — thorough the collective bargaining agreements they negotiate or the annual reviews they endure — that they deserve a raise. Shouldn’t those workers be supportive when the people running their government make the case that their work is worth more than they’re getting?

Finally, how representative will our democracy genuinely be if Congress becomes the almost-exclusive purview of white-collar professionals, members of the investor class who can afford to say goodbye to some earned income while working in Washington. “Law” and “business” are already the occupations listed on three-quarters of the members’ biographies, and their median net worth of more than $440,000 is six times more than the average American’s.

That income gap will only increase unless more people from the middle class get to Congress. And that will only happen if more of them conclude they can afford the job.

The expense of being a congressman has soared as the Washington economy has surged and the gentrification of Capitol Hill has blossomed. Members can still freeload most of their food and drink while they’re in town, but the cost of housing is tough to avoid. And even though few members can afford to buy in the capital — what with mortgages to pay, families to raise and campaigns to run back home — they still face serious rental sticker shock. The area’s housing is the fifth-most expensive in the country, the Census Bureau says. And the cheapest one-bedroom apartment listed Monday by Yarmouth Management, a big broker on the Hill, was $1,225 a month. That’s 50 percent more than the firm’s lowest comparable listing on the same date 10 years ago.

The alternative, which perhaps 10 percent of House members have adopted, is to sleep on the couches in their offices and shower in the members’ gym. But that practice not only further diminishes the dignity of an institution in reputational peril; it also may run afoul of the law (free housing is generally a taxable benefit) and House rules (members are barred from using their suites for personal business).

None of those arguments has even been politically saleable, even back in the days when the congressional approval rating was several multiples of what it is now. Which is why more than two decades ago Congress came up with the current system, which is that members receive an automatic increase in their salary based on a Bureau of Labor Statistics formula for gauging raises in the private sector — unless Congress votes to deny itself the extra money.

Lawmakers have blocked their pay raise in 11 subsequent years, including continuously since the recession took hold in 2009. As a result, their compensation has declined sharply in relative terms. Adjusted for inflation, the $125,100 they agreed to pay themselves in 1991 would be worth $215,600 today. Had the cost of living adjustments been permitted over the past five years, current pay would be 9 percent more than what it is, or $190,400.

Moran is not calling for a change in the base salary for 529 members. (The six top leaders are paid a bit more.) Instead, he’s advocating that members qualify for a per diem on the days their chamber is in session — similar to what federal workers get when they travel and what some state lawmakers receive. (The General Services Administration per diem for travelers to D.C. changes monthly, but has recently averaged $270 for both lodging and food. Members could presumably get by with less.)

Moran says he’ll seek to amend the fiscal 2015 legislative branch spending bill, which comes before House Appropriations on Wednesday. As a retiring member who would never benefit from the change, he’s the best available vehicle for the cause. He’s also a lawmaker who experiences the local cost of living even when Congress is in recess and someone whose career has been pockmarked by questionable financial practices in hopes of lifting himself out of the ranks of Congress’ poorest members.

Of course, he doesn’t stand a chance.

 

Related stories:

Hey, Congress: This Might be Why They Hate You

Moran: Members Can’t Afford to Live Decently in D.C. (Audio)

‘Underpaid’ Jim Moran One of the Poorest Members of Congress

Jim Moran, John Boehner Sought Congressional Pay Raise Reform as Freshmen

  • Sally

    Your reasoning doesn’t make sense. $172,000 would be a fortune to someone ‘middle class.’ This job was never meant to be a lifetime appointment. Members were supposed to serve, and originally, I think, for free. They were expected to come to DC for a brief time, not for decades. Raise the salary and you’ll see even more lifetime reps and Senators. And who else can work 110 days for $172,000? The rest of the time they are raising money for their next campaign. Come on. When these people actually work a full week, they award themselves 18 days off for “Spring break” or something.
    Congress will always be mostly lawyers, because they write LAWS, and they need to be able to understand the wording. I couldn’t go to Congress. My English degree doesn’t make me capable of writing a law.
    Frankly, if they can’t live on their salary, maybe they need to go back to the private sector.

    • Lord Stark

      Perhaps you should read some history to understand why there are provisions in the Constitution gauranteeing that MoC’s be paid for their services.

      First, you are dead wrong; they were never originally meant to work for free. You made that up.

      Second, try and apply some logic. What would happen, then as now, if you made Congressional service ‘free’? ONLY those men (and now women) who are financially well off enough to simply uproot themselves and move to Washington, D.C. to serve will be eligible for Congress. Not to mention all the other costs associated with running, and holding office.

      I do not doubt your intentions, nor those of any citizen who looks at the congressional salary and deems them too high. However, your approach would lead to the formation of a true and permanent political caste. The Founders knew this and foresaw this, and added provisions to stop this. Statements like “if they can’t live on their salary, maybe they need to go back to the private sector” only serve to encourage a brain drain, and a political caste which NO ONE wants for the Federal Government.

      Any Con Law class teaches this, btw.

  • freal

    $172,000 for a job with no accountability is pretty darn good. Summer & holidays off. Bills sponsored 15 – Bills passed 0 – great job.

    • DC is Evil

      “Money for nothing……and the chicks for free.”

  • Pat

    The statement “Since these are averages, that means about half the people in these jobs make more than those amounts” is factually incorrect. There is no relationship between average amounts and percentiles. In particular for a distribution that cannot fall below 0, and is well known to have large, positive outliers…

  • Layla

    Mr. Hawkings, have you lost your mind? To even attempt to compare Members of Congress with the CEO’s of America’s largest corporations is inane. First, they don’t have nearly the qualifications or business sense. Many have never held a real job, which should have mattered in light of the failures they are causing this country now.

    How insensitive can you be? Mr. Moran doesn’t even have to spend money traveling to his district. I’m sorry, but it is becoming quite clear that many of us used very poor judgement in supporting many for public office. I believe that problem will be corrected during the next few election cycles.

    And lastly, they would have been fired for it in corporate America, just as these people need to be fired.

  • Mary Roman

    If you want to compare the job Congress does to the Free Market – then 90% of them are fired on the spot and anyone who wants an increase in salary can do what “normal Americans” do when they want more money and that is go find another job. The entire argument outlined above is ridiculous and indicative of how far we’ve gone from the government our founding fathers outlined.

  • No5thDown

    If members of Congress were employed in the private sector, they would all be fired for running the company in to the ground. The problems with all Mr. Hawking’s comparisons is that there is not a free market. We can’t go across the street to a government that does a better job of serving us. We can change doctors, withhold our business and investments from companies that employ inept or corrupt executives, withdraw our money from banks and get our mortgages and car loans elsewhere. When government takes our money at gunpoint and spends it foolishly while racking up massive debt, we are stuck with that government. We can’t fire it. While the private sector struggles under government heavy-handed attempts to make life “fair” employees, when they can find jobs, have not had a raise or cost of living increase for over 6 years. America is hurting, the purveyors of that misery can suffer along with the rest of us.

  • John

    “all officials, high or low, were paid only the wages received by other workers… In this way an effective barrier to place-hunting and careerism was set up”

  • Little_Tin_God

    Since they only “work” about 120 days out of 365, they’re getting paid way too much already. Especially when they don’t perform. In the real world, they would be fired for incompetence. At least if they were everyday workers. If they were upper level management, they’d be given a huge bonus before being let go.

  • Jose Rodriguez

    The argument between the liberty school and the collectivists is not one about improvement, but rather about the best ways of doing so.

  • Michael Paulson

    So, Congressmen are underpaid? What about teachers, nurses, fire fighters and police officers? It’s pretty clear they make barely above minimum wage and their jobs are 100% more important then that of a congress men. After all a member of congress isn’t the one teaching the next generation the knowledge they need to be even remotely successful as adults. Members of congress are not putting their lives on the line to save someone else. But, it’s congressmen that are under payed? It’s pretty clear Mr. Hawkings, just like Moran, does not live in the real world. Also, Moran should just replace the a in his name with an o and be done with it.

  • Jeff Schrade

    I looked at Congressional salaries at 10 year increments for the past 100 years and found that in today’s dollars, Senators and Congressmen averaged $179,942.53 a year — meaning that today’s Congressional reps are making about the same today ($174,000) as they have, on average…, for the past 100 years. Using the Federal Reserve of Minneapolis’s “What’s the value of a dollar worth” calculator, here’s how Congressional salaries then would stack up today:

    Year – Salary
    1915 – $7,500. Inflation value today’s dollars: $176,497.01
    1925 – $10,000. Inflation value in today’s dollars: $134,435.58
    1935 – $10,000. Inflation value in today’s dollars: $171,740.71
    1947 – $12,500. Inflation value in today’s dollars: $131,997.31
    1955 – $22,500. Inflation value in today’s dollars: $197966.42
    1965 – $35,000. Inflation value in today’s dollars: $224,357.75
    1975 – $44,600. Inflation value in today’s dollars: $195,368.38
    1985 – $75,100. Inflation value in today’s dollars: $164,577.88
    1995 – $133,600. Inflation value in today’s dollars: $206,738.94
    2005 – $162,100. Inflation value in today’s dollars: $195,745.28

  • Thomas Brady

    Just as competition is the essence of natural selection, the competition found within free markets brings out the best in people while motivating them to create new things, make better things, and be more efficient.

  • JosefJohann

    Glad to see this article, I was less impressed by the first one from roll call I read on this topic, happier about it knowing there’s one on the other side.

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