Deliver Them Not into Temptation: Legislative Options for Reporting Presidential Gifts

Let me begin my testimony by noting my deepest appreciation for the Chairman’s service to the country as a member of the House. Your work on Y2K helped avoid a government meltdown, your legislation on presidential transitions opened the door to long overdue improvements in how our democracy makes the most delicate of changes, and your efforts on behalf of the presidential pay increase showed a familiar courage to take on the tough issues regardless of the consequence. You have reminded us that management and organization matters to public confidence, and have set a tone for careful study that every legislative chairman in this country should emulate. You will be sorely missed.

Let me divide my brief testimony into two parts. First, I will address the issues at hand in the presidential gift legislation. Second, I will argue that the way to remove temptation is not just by establishing an integrated monitoring system, but also by addressing the continuing executive, legislative, and judicial pay gap.

Presidential Gifts

As I testified last February, the presidential gift process is fraught with the potential for both embarrassment and diminished accountability. The current process is fragmented, defies bureaucratic logic, and appears designed more to frustrate accountability than enhance it.

If the volume of gifts to the president is any indication, Americans are a very generous people. Presidents and their First Ladies receive thousands of gifts each year, from large to small, from domestic to gifts from heads of state. As I also testified, I believe that H.R. 1081 would make a valuable contribution toward rationalizing the current system, and wholeheartedly endorse its passage.

However, as I noted, trust is the greatest gift that any president receives from the American public. It is priceless to democracy and an essential resource for effective leadership. It is also easily squandered by small acts of commission and omission. As our Center for Public Service research shows, Americans appear willing to believe the worst about our political leaders and public servants.

• Although the number of Americans who said they had a very or somewhat favorable opinion of the federal government increased from 50 percent in July, 2001, to 78 percent in October, the number who also said that the federal government’s biggest problem was inefficiency remained virtually unchanged after September 11^th. Sixty-one percent of Americans said the federal government has the right priorities but runs programs inefficiently in July, compared to 63 percent in October, and 56 percent in May, 2002.

• The number of Americans who said they had a very or somewhat favorable opinion of presidential appointees increased from 60 percent in July, 2001, to 79 percent in October, but fell back to 61 by May, 2002. Even at the height of the surge in public confidence after September 11^th, 80 percent of Americans strongly or somewhat agreed that political considerations still play too large a role in the selection process, down just one percentage point from July. 53 percent of Americans have also said the financial contributions people make to a presidential campaign play a very big role in the appointments process, down only four percent points from July.

• The number of Americans who had a very or somewhat favorable opinion of federal government workers increased from 69 percent in July, 2001, to 76 percent in October, but fell back to 70 percent by May, 2002. The number who also said that federal employees are motivated primary by job security, salary and benefits, and a security paycheck was basically unchanged over the period.

• The number of Americans who said they trust the government in Washington just about always or most of the time rose from 29 percent in July to 57 percent by October, then fell back to 40 percent in May. These findings also parallel public confidence in presidential appointees. The number of Americans who said appointees are motivated primarily to serve the country rose from just 35 percent in July to 47 percent in October, then fell back to 32 percent in May.

My point here is not to suggest that presidential gift giving is at the root of public distrust. The distrust runs much deeper. Nor is it to suggest that some distrust is unhealthy in our democracy. But the contemporary levels of underlying distrust in the United States are far beyond healthy. Americans are too quick to say that presidential appointments can be bought for a pittance, for example. When Americans were asked in July, 2001, how much a person needs to contribute to a campaign to be considered for an appointment, 44 percent of Americans estimated that it would take a donation greater than $10,000, 10 percent said between $5,000 and $10,000, 25 percent said less than $5,000, and nearly a fifth (18 percent) said it would take less than $1,000.

There are many ways to address this lingering disquiet about trust in government, not the least of which is improving general government performance. As our research shows, trust in government does rise and fall with perceived government performance, which is why I applaud the President and his Office of Management and Budget for their recent decision to make performance a centerpiece of budget decisionmaking.

I believe it is also important to restructure the presidential gifts process, which violates every principle of government in the sunshine. At best, the current system encourages Americans to believe the worst about their leaders; at worst, it creates the unmistakable appearance that gifts are not gifts at all, but rather down payments or “quids” for “pro quos.”

It may well be that Americans are so jaded about politics today that there is no such thing as a gift today. Given the polling data outlined above, my hunch is that the vast majority of Americans would strongly or somewhat agree that most presidential gifts are given as more than tokens of esteem. Such data might well suggest that Congress should ban domestic gifts altogether. Just as many in Congress argue that soft money is so highly corruptible that it must be banned, perhaps we must conclude the same about gifts. Luckily, Congress doubled the president’s salary last year to $400,000, which would cushion at least some of the pain of such a ban.

My sense is that it is too early to advocate a complete ban on domestic gifts. We ought to try the reform embedded in H.R. 1081 first. And we ought to do so in the search for simple, easily accessible information on the following questions that sum to the sine qua non of a clean, fully accessible system:

1. Who is giving the gift The public has a perfect right to know who is giving gifts to the White House. Just as we ask campaign contributors and transition volunteers to identify themselves to the public, we should continue to ask gift-givers to identify themselves by name.

What is the gift? The public also has a right to know what was given to the president, be it a consumable such as food or flower, or a durable good such as a chair, fishing rod, or automobile.

What is the value of the gift? Although the value of a gift is always in the eye of the beholder, the beholder should be above reproach. To the extent possible, valuation should be independent, consistent, and based on a clearly transparent methodology.

When is the gift given? Even though I oppose the notion of an outright ban on domestic gifts, I do believe that there is merit in prohibiting gift-taking during certain periods—e.g., during the transition period in the second term of a presidency.

How is the gift given? Again, the public has a right to know the nature of the transaction involved in the gift giving.

Why is the gift given? This is the most difficult question of all to answer. Ideally, all gifts are given to express affection and respect for the President. In reality, the bigger the gift, the more the appearance of a potential quid pro quo. One way to cure the appearance problem is to simply place a ban or automatic return on all domestic gifts valued above $1,000.

Congress cannot ignore the problems raised by the Subcommittee on Energy Policy, Natural Resources and Regulatory Affairs, chaired by Mr. Ose. One is tempted to rewrite the MasterCard commercials of late. Tiffany vase: $150. Olympic hockey tickets: $250. Trust in the presidency retained through full disclosure and tracking of all presidential gifts: Priceless.

On Executive, Legislative, and Judicial Pay

It has been two years since the Chairman led the effort to raise the president’s salary. It was the first presidential pay increase since 1969, and restored some of the purchasing power lost to forty years of inflation. It was also one of the most courageous efforts you have led. I received more hate mail on my testimony about that bill than all of my other testimonies combined.

Even with that in mind, I believe that it is now time to raise pay for the rest of the federal government’s leaders. I believe American democracy gets what it pays for. Absent a significant pay raise, its top posts will only appeal to the very wealthy, the easily corruptible, or the hyper-zealous. The wealthy do not care about money because, well, they are wealthy. The hyper-zealous do not care about money either. The lower the paycheck, the greater the martyrdom for the cause.

In contrast, the easily corruptible care too much about money. They are willing to trade their honor for petty treasures such as furniture and china. That appears to be what President Clinton did at the end of his administration.

In most democracies, the presidential pay increase would have pulled up the rest of the federal government’s sagging salary structure, where 80 percent of senior executives are now paid the same amount. But the United States is no ordinary democracy. Congress is responsible for setting the pay rates for the other two branches. Members long ago coupled their salaries with judges and presidential appointees, not the president. If congressional salaries do not rise, neither do judges or presidential appointees.

As a result of the presidential pay raise, the president now makes more than twice as much as Supreme Court Justices and members of Congress. Add in the value of the free food and lodging, and the president’s compensation is now completely out of touch with Congress and the federal judiciary. The gap does not violate the separation of powers per se, but creates an imbalance nonetheless. In the constitution’s finely-tuned system of checks and balances, the president’s paycheck should be roughly the same as Congress and the Judiciary.

This imbalance is only a small part of the case for pay reform. Far more important is the increasing pay gap between the nation’s democratic leaders and other civic and corporate executives. Federal district court judges barely make as much as junior associates at America’s largest law firms, while the nation’s egregiously over-paid corporate executives make 93 times as much on average as members of Congress, and presidential appointees trail in virtually every comparison. According to a recent report from the Brookings Institution’s Presidential Appointee Initiative, the commissioner of the Internal Revenue Service makes roughly one-tenth as much as an equity partner in one of New York’s largest financial firms and one-sixth as much as a general counsel in a Fortune 1,000 firm, while the head of the Food and Drug Administration makes one-twentieth as much as the heads of the pharmaceutical companies he or she regulates.

The gaps are particularly severe for the federal judiciary, where Congress has gotten into the habit of denying federal judges the annual cost of living increases allowed under law. As a result, federal judges have actually lost purchasing power to inflation over the last decade. Whereas average national wages gained almost 15 percentage points above inflation and federal civil servants gained just over five percentage points, federal judges lost nearly 10 percent. In addition, Congress has never given judges the local cost-of-living adjustments that help federal civil servants in high-cost areas such as New York City, Boston, San Francisco, and Los Angeles. A judicial salary truly does not go as far today as it used to.

Congress has also suffered from these policies. Member salaries have gone down with inflation, even as the costs of keeping residences in Washington and back home have mostly skyrocketed. As Supreme Court Justice Stephen Breyer wrote in 2002, Congress “has treated judges no worse than it has treated itself. It has cut its own real salaries just as it has cut those of the judges. And its doing so may well work similar harm upon all Federal Government institutions.”

It is no surprise, for example, that early retirements are on the rise in the federal judiciary or that potential presidential appointees might reject the President’s call. Having kids in college or a home mortgage has become a liability, not an asset, for service.

I cannot think of a better way for the Chairman to cap his distinguished career than to give the executive, legislative, and judicial branches a long-needed pay increase. That increase could involve a variety of options:

• A one-time catch up in the executive, legislative, and judicial pay system to account for lost purchasing power. One might suggest a 25 percent increase as a starting point.

• A simple doubling of executive, legislative, and judicial pay to respond and keep pace with the president’s salary.

• Creation of a military-base closing style commission that would recommend either form of salary adjustment under a special rule for an up-or-down vote.

• Creation of a robust locality pay system for federal judges to account for the wildly different cost of living across the country.

• Expansion of the critical pay authority given in 1998 to the Internal Revenue Service so that all agencies of the federal government could raise their top salaries to a more competitive position.

Any one of these proposals would be controversial. Indeed, according to a recent Princeton Survey Research Associates survey on behalf of our Center for Public Service, it may be impossible to write a question that could get the public to support a pay increase for members of Congress and the Supreme Court. The survey of 986 adults was conducted from May 2-May 11, and has a margin of error of plus or minus 3 percent.

Not surprisingly, support for a pay increase was lowest when respondents were first told exactly how much money federal judges and members of Congress make. But support was not particularly higher when we excluded the actual figure and focused instead on the issue of keeping pace with the President. Although opposition to a Supreme Court pay increase did fall somewhat when the dollar figures were removed, opposition to a congressional pay increase remained hard and stable regardless of how the question was asked. The following findings show the difficulties involved:

• 41 percent of respondents strongly opposed a doubling of Supreme Court salaries when the dollar figures were used, while 34 percent opposed it when the increase was framed as an issue of keeping pace with the President.

• 54 percent strongly opposed a doubling of congressional salaries when the dollar figures were used, while 53 percent opposed it when the increase was framed as an issue of keeping pace with the President.

Just because an issue is difficult does not make it impossible. Nor does controversy deny the need. This subcommittee has always accepted the obligation to educate the public on the need for action, no doubt in part because the Chairman is himself an educator by training and instinct.

Indeed, the Chairman may well remember that there was mixed public support for the presidential pay increase in 1999. According to a survey taken by the Pew Research Center for The People & The Press just before your hearing on the proposal, 45 percent of the public interviewed answered “yes” when asked whether the president’s salary should be raised. Moreover, the numbers varied greatly depending on whether respondents actually knew what the President currently made. When half of the Pew respondents were first told that the president’s salary had not gone up since 1969, but not that the president’s current salary was $200,000, 49 percent answered “yes” to a presidential pay raise. But when the other half were told how much the president made, and were then asked whether the President deserved an increased, the number who said “yes” to a pay increase fell to just 39 percent.

Despite the opposition, the Chairman rightly persevered. I encourage this subcommittee to attach a pay-increase proposal to H.R. 1081. Although I cannot speak for the new National Commission on the Public Service, which is chaired by Paul Volcker, I rather suspect the Commission would be willing to lend its strong voice to the effort.

QUESTIONS ON SUPREME COURT AND CONGRESSIONAL PAY INCREASES

May 2-May 11, 2002

N=986

SUPREME COURT:

Last year, the president’s salary was increased from $200,000 to $400,000 a year. Supreme Court judges now make about $190,000 a year. How do you feel about doubling the salary of Supreme Court judges to keep pace with the president? Do you strongly support, somewhat support, somewhat oppose or strongly oppose this.

8%		Strongly support
23		Somewhat support
25		Somewhat oppose
41		Strongly oppose
3		Don’t know
*		Refused
N=499

Last year, the president’s salary was doubled but Supreme Court judges did not receive a similar pay increase. How do you feel about doubling the salary of Supreme Court judges to keep pace with the president? Do you strongly support, somewhat support, somewhat oppose or strongly oppose this.

9%		Strongly support
28		Somewhat support
26		Somewhat oppose
32		Strongly oppose
5		Don’t know
*		Refused
N=487

CONGRESSIONAL:

And what about members of Congress, they now make $150,000 a year. How do feel about doubling the salary of members of Congress to keep pace with the president? Do you strongly support, somewhat support, somewhat oppose or strongly oppose this.

5%		Strongly support
13		Somewhat support
25		Somewhat oppose
54		Strongly oppose
3		Don’t know
*		Refused
N=499

And how do feel about doubling the salary of members of Congress to keep pace with the president? Do you strongly support, somewhat support, somewhat oppose or strongly oppose this.

4%		Strongly support
16		Somewhat support
24		Somewhat oppose
53		Strongly oppose
3		Don’t know
*		Refused
N=487