Dear Mr. Speaker and Mr. Minority Leader:
 

          This morning’s edition of Roll Call suggests that House Leaders are involved in a “quiet effort” to increase salaries for Members of Congress. On behalf of the 300,000 members of National Taxpayers Union (NTU), I am writing to express our strong opposition to any “COLA” or other pay hike for lawmakers.

          For several years now, the implementation of Congressional pay raises, even those billed as “Cost of Living Adjustments,” has confounded the American people’s understanding of the 27th Amendment to the U.S. Constitution. Although courts have interpreted that this Amendment need not apply to COLAs set into motion by current law, this insignificant legal nuance tries the patience of the average taxpayer. The citizens’ intent behind the Madison Amendment was to prevent Congress from accepting a pay raise of any kind until a House election had intervened.

          Constitutional questions aside, the economic case for COLAs rests on tenuous assumptions. In 1989, the House passed a bill that became law that adjusted salaries to a level of $125,100 (the Senate followed shortly thereafter). Three subsequent COLAs have raised the annual remuneration to $136,700. Yet, according to our calculations, the inflation-adjusted salary for Members of Congress averaged just $81,802.80 from 1900 to 1988, the year prior to enactment of the pay raise law. Against this historical perspective, inflation has not seriously eroded the value of a Congressional salary.

          In any event, legislation passed by Congress often directly impacts the level of inflation, which ideally should be close to zero percent. Unfortunately this has not been the experience of workers in the private sector, who must live with inflation but typically have few guaranteed cost of living adjustments in their salaries. Indeed, even those citizens fortunate enough to benefit from the economic boom in real incomes have seen their gains eaten away by “progressive” income taxes.

          The political case for automatic COLAs is on similarly shaky ground. If the currently robust economy turns sour, such increases will fuel public suspicion that Congress has shielded itself from the effects of its own policy errors. If economic performance continues to shine, Congress’s failure to enact meaningful tax relief while rewarding itself with COLAs will prove equally irritating to Americans. Additionally, Congress’s automatic COLA law leaves Members in a weaker position to defend themselves from charges of self-interest, whenever big-spending lobbies agitate for their undeserved “share” of federal budget surpluses.

          Moreover, Congressional pension formulas are tied to pay levels. Even a minor increase in salary will boost the base pension benefit. Ironically, while Congress has turned away several pay raises defined by law as COLAs since 1993, retired Members have received COLAs on their pensions without interruption.

          We believe that it is fundamentally inconsistent for Congress to engage in collective hand-wringing over salary COLAs while pension COLAs continue unabated. These COLAs, which almost no private sector plans offer, are the primary reason why the typical Member of Congress can draw more than a million dollars in benefits over his or her lifetime. Perhaps the only issue that can compete with pay raises in capturing the public’s ire is the over-generous Congressional pension system.

          Even in this time of relative economic prosperity, Congress cannot afford to further a cynical image that lawmakers live better than the citizens who elected them.  Far from being a “politically courageous” decision, accepting a pay raise now would be an ill-timed, ill-considered move guaranteed to alienate many constituents, widen an already yawning gap between public and private sector pension benefits, and increase pressure throughout the government for more spending. Accordingly, we urge you to reject any effort to increase Congressional salaries at this time.
 
 
 

Sincerely,

Peter J. Sepp
Vice President for Communications