When asked why his salary topped President Herbert Hoover’s in 1931, Babe Ruth replied bluntly: “I had a better year.”
Ruth was right. For $75,000 a year, Hoover presided over a depression. For $80,000 a year, Ruth hit .373.
But times do change. Today, the average major-league bench-warmer earns more than the president. So do tens of thousands of lawyers, business executives, doctors and entrepreneurs.
And that’s new and news.
Partly it’s happening because presidents haven’t gotten a raise since 1969 when Congress set their salary at $200,000. Had presidential wages simply kept pace with the cost of living, Bill Clinton would be earning $788,000 today.
In fact, real incomes of top private sector professionals rose by 30 percent or more in the same time span, according to former Harvard University president Derek Bok, author of “The Cost of Talent,” an analysis of relative salaries paid high performers.
And presidents are not the only government officials losing ground. Members of Congress and senior administration appointees have lost a fifth of their purchasing power over the last 25 years, despite periodic raises, according to compensation specialists.
This trend has produced an acute drought in talent pools for the most demanding federal jobs. Qualified judges, for example, and senior financial, scientific and medical managers are becoming very hard to recruit, says Carol Horner, White House personnel director in the Bush administration.
It’s easy to see why. The director of the National Institutes of Health in Washington, the world’s premier medical research facility, earns $148,400. The president of the Memorial Sloan-Kettering Cancer Center in New York makes $793,750. A Supreme Court justice makes $164,100. In a good year, each of 69 partners in the New York law firm of Cravath Swaine & Moore earns more than the entire nine-member court.
A more difficult question is whether relatively low congressional pay hurts lawmaking. There is growing evidence that it at least shapes decisions about who goes into politics and who quits it.
Most political scientists deplore the erosion in federal pay, particularly at the top. They contend, like Harvard’s Bok, that Americans generally get what they pay for, in government as elsewhere.
Orthodox conservatives, on the other hand, who hope to replace career politicians with term-limited “citizen legislators,” see earning power losses by lawmakers as tactical gains. Among their allies is consumer advocate Ralph Nader. “More money has not and will not buy more integrity, dedication and competence” in government, he insists.
The public sides with Nader. Four out of five Americans think Washington lawmakers are paid too much, according to a recent nationwide poll designed by University of Nebraska government professor John Hibbing. At that, those polled underestimated by $35,000 how much Senate and House members actually earn today: $133,600.
Members of Congress, in what former Senate Majority Leader Howard Baker calls “the granddaddy conflict of interest of all time,” set every salary in the federal government including their own.
The figure is not determined in a free market, like the pay of athletes, stock brokers and neurologists, Bok notes. Rather, members of Congress pay what they think voters think Washington’s workers are worth, plus what they think they can get away with.
Ever since 1816, when voters turned out record numbers of lawmakers for voting themselves their first pay raise, voters have been inhibiting generosity. “The result,” Bok says, particularly in the last 25 years, “has been periods of stagnation, then major readjustment when things got bad, then stagnation again, while private sector professional salaries rose steadily.”
It’s hard to know whether individual federal politicians and bureaucrats earn too little or too much; that varies and ultimately is in the eye of the beholder. But voters are likely to be confused by trying to look at two things at once, says Thomas Mann of the Brookings Institution, a Washington think tank.
“Congress is a representative body and most Americans think members should be like them and earn as they do,” Mann explains. “On the other hand, they know that we don’t send blue-collar workers to Congress and they want to send very able people. So how much you should pay them is a genuine dilemma.”
The Founding Fathers, who of fered George Washington $25,000 a year in 1789, took the position that the president belonged among America’s income elite. Economists warn that it’s hard to compare 18th century purchasing power to today’s but reckon that Washington’s pay rate would make today’s presidents millionaires.
The same Founding Fathers viewed Congress differently, however; its members were paid only $6 a day until 1856. To make ends meet many lawmakers worked on the side as paid Washington agents for constituents who had dealings with the government, reports MIT political scientist Charles Stewart III.
“Professionalizing” politics - turning lawmaking into a full-time fully compensated job - was considered a reform in the 19th century. Today’s popular reforms are antidotes to professionalism: “citizen legislators” serving limited terms.
If today’s reformers succeed, the make-up of Congress and state legislatures will change substantially, academics predict.
Discouraging career politicians reduces the number of Democrats and ethnic minority lawmakers, researchers have found by studying variations in state legislatures. It increases the number of retirees, women and millionaires.
Lower pay, according to Harvard’s Morris Fiorina, also increases the representation from interruptible careers like law and real estate. It reduces the number of lawmakers from hard-to-break careers in business and farming.
When salaries fall over time, they also serve as a selective form of term limits. Take the case of respected veteran Rep. Norman Y. Mineta, D-Calif., who resigned last week to join the Lockheed Marietta Corp. “I’ve had financial pressures for a long time,” Mineta explained. “After 20 years, frankly, I have nothing to show for this.”
Indirectly, disgraced Sen. Bob Packwood, R-Ore., also resigned at least partly because he wasn’t earning enough money. Packwood mused about political poverty in a 1990 letter to his estranged wife that described a misdeed that helped undo him.
After explaining that he had asked lobbyist friends to hire her because he was hard pressed for support money, Packwood wrote:
“In this town … I have never figured out exactly what people think value is. When former senators can go to work for $800,000 for a law firm, and staffers who started at $20,000 can go to work five years later for $100,000, and obscure lobbyists of mediocre talent can command several hundred thousand dollars a year, it seems the value scale is one I didn’t grow up with.”
After 21 years in the Senate, Packwood was earning $98,400.
Between the year Packwood was sworn in and the year he wrote the letter, the number of Americans reporting adjusted gross annual incomes of more than $1 million to the Internal Revenue Service rose from 642 to 60,677.
That suggests the number of Americans who could look down on a member of Congress in terms of income had increased at least a hundredfold.
Maybe that’s what Americans wanted to happen. Or maybe they were just giving their government a payroll-driven opportunity to live down to its low reputation.