chairman of the House Civil Service Committee, said (hearings, p. 72): I have always felt that increases in the salaries of top Government officials, whatever the cost, was a real economy. The increased capability that can be secured and retained through increases in salaries will mean greater governmental efficiency. Of course, it is impossible to estimate the amount of money that can be saved through increases in efficiency in this manner, but I am quite clear that the increase in efficiency which will result from this bill would net the Government far more than the $1,117,000 this bill is going to cost. [Annual cost of corresponding features of the bill now being proposed is $1,609,973.] As a matter of fact, if I were to express any criticism of this bill at all, I would say that the increases proposed are too modest, and that the committee might well give consideration to increasing them. He added (hearings, p. 76): I do not think there is any more important legislation that could be considered by the Congress than this bill, because I am thoroughly convinced from my 16 years of study of the Federal Government and its personnel problems that you never have an efficient, economical administration of governmental affairs until you can employ and retain efficient and capable people at the top. The salary revision proposed by the bill is long overdue. Many of the salary levels and the over-all top-pay policy which the bill seeks to modernize were fixed years ago, at a time when, compared to the current period, the structure of Government was less complex; the functions of Government were less vital to industry, commerce, agriculture, science, the welfare of the Nation and the life of the individual; the prevailing salary rates in all brackets of employment-public and private-were considerably lower; the responsibilities and the qualifications demanded of top administrative officials were much less exacting; the opportunities available to qualified executives in non-Government work were less attractive; and the prices of goods and commodities were at much lower levels. The present salary rate of heads of executive departments, $15,000 a year, was fixed in 1925. It has not been changed in over 23 years. Originally in 1799, the salaries of Cabinet officers varied from $3,000 to $5,000, and in 1819, from $3,500 to $6,000. In 1853, a uniform salary rate of $8,000 was fixed by statute. In 1873, this was raised to $10,000; in 1907, to $12,000; and in 1925, to the present rate of $15,000. The present salaries of the members of some of the independent boards and commissions likewise were fixed more than 10 years ago. For example, $10,000 was authorized for Federal Trade Commissioners in 1914, for Federal Power Commissioners in 1930, for Federal Communications Commissioners in 1934, for members of the National Mediation Board in 1934, for Securities and Exchange Commissioners in 1934, and for members of the Railroad Retirement Board in 1935. Today we are faced with these conditions: The political, social, industrial, and economic development of the Nation and its place in the family of peace-loving nations have necessarily required the formulation of Government policies and activity programs of wider scope and greater complexity than could have been visualized when the present top bracket general pay policy was first established. These policies and activity programs, entrusted to the personnel of the Federal Government, require for their execution and administration top officials of the broadest capacity and insight. Measured by modern competitive standards, the salaries the Government now offers in the top brackets of responsibility are unrealistic in the extreme. Even after considerable weight is given to the nonfinancial incentives and rewards of public service, the salary scale is so low as to interfere with, rather than facilitate, the securing and retention of the quality of executives required by the responsibilities of top management posts. In an address at Princeton University on June 17, 1947, President Truman referred to this problem. He said, in part: Salary limitations prevent the Government, in many instances, from securing the kind of executives required to manage its vital activities. Capable administrators are too frequently drawn away from Government to private positions with salaries many times what they could earn in Government service. This situation can be remedied only by laws to bring salaries more nearly into line with the heavy responsibilities that executives carry at the higher levels in the public service. Moreover, the Government's top salary structure is marked by inconsistency-a lack of balance between responsibilities and pay and between responsibilities of clearly different levels-that adds inequity to inadequacy. The proposed bill has the endorsement of the President of the United States. The proposals and recommendations of Mr. James E. Webb, Director of the Bureau of the Budget (hearings, pp. 7-23), were presented to the subcommittee after he had consulted the President about them, and after the President had authorized the Director to appear before the subcommittee to express the views of the executive branch. Specifically, Mr. Webb testified that the President believed that a salary of $25,000 a year at this time should be established for heads of executive departments and that the salary rates of other top bracket positions should be determined in proper relationship to that ceiling. In speaking of the top salary scales in the draft of bill before the subcommittee at the time of the hearings (which had no reference to the salary or expenses of the President, the Vice President, or the Speaker of the House), the Director of the Bureau of the Budget stated (hearings, p. 9): The President wholeheartedly endorses the principles embodied in this legislation. He believes, however, that the rates for the positions covered in the draft of the bill would be more realistic if advanced to the maximum level [$25,000] which he proposed to the Congress in 1945. While the subcommittee's first draft of bill was based on a ceiling of $20,000 a year for Cabinet officers, the policy of the President, as reflected in the specific proposals of the Director of the Bureau of the Budget, received the overwhelming support of the witnesses at the hearings, including Hoover Commission and other official witnesses and representatives of labor and Government employee unions. The subcommittee, accordingly, is glad to support the President's program. The proposed bill should have to priority in the Congress next January. Other bills to strengthen the Federal service by revising general pay statutes covering the lower, middle, and upper brackets up to the topmost levels included within the proposed bill will be prepared for consideration in the Eighty-first Congress. Separate hearings should be held on these bills. However, it is essential to distinguish and separate such types of pay legislation from the pro posed bill in order to make it possible to act speedily on the subject of this report. At the same time, it should be observed that the proposed bill establishes a pattern for the future. In particular, this pattern should control the ceiling of statutory schedules for subordinate officials and employees. With respect to this point, the Director of the Bureau of the Budget testified (hearings, p. 10): This is a matter with which the President has been deeply concerned. He feels that the same arguments to support increases in salary for Cabinet officers and agency heads apply with equal force to the bureau chiefs and the approximately 2,000 top positions in the classified service. The contribution of these career men to the Federal Government is very great and the financial incentives to leave Federal service are alarmingly attractive and effective, as turn-over figures prove. In far too many cases the knowledge and skills developed over 15 or 20 years are lost by resignations from Federal service just when the Government should begin to realize the greatest returns from them. However, I would not recommend the correction of these discrepancies and inequities by extending coverage of the bill before you. The President has authorized me to repeat his recommendation that the Classification Act be amended. Among the most important of the amendments should be adjustment of top career salaries and inclusion within the scope of the act of the salaries of bureau chiefs, their principal assistants, and other positions of comparable rank. Accordingly, I am not including recommendations for amendments of the bill before you which can be more adequately handled by revision of the Classification Act. The Civil Service Commission is working now with your committee and the House Post Office and Civil Service Committee on a draft of such revision. SALARY AND EXPENSES OF THE PRESIDENT The salary of the President of the United States. $75,000 a year. has not been changed for nearly 40 years. Originally established in 1789 at $25,000 a year, it was raised to $50,000 a year in 1873, and to $75,000 a year in 1909. The bill proposes to increase his salary to $100,000 a year. In addition to salary, the President is entitled by law to the use of the White House and its furnishings. Basic law also authorizes the use of not more than $40,000 annually, when appropriated by the Congress, for the traveling expenses of the President. Appropriations for the operations of the White House office and for the physical upkeep of the Executive Mansion and grounds are made annually, as in the case of any other Government office or building. Obviously, the management of the White House as the President's home is to a considerable degree an official function, involving expenditures which are necessary because of the position the President holds in national and international affairs. Household expenses, therefore, are beyond those which any official of the Government should be expected to meet out of personal funds. Notwithstanding this situation, no funds are provided for the President's household or living expenses, although a small part of the White House appropriations may be used for official entertainment. By virtue of his official position, the President is compelled to meet expenses of living for himself, his family, and their guests in a manner befitting the head of the United States Government. The people of the Nation expect him to direct and manage his household affairs in this way. The subcommittee believes, therefore, that the Government should provide for the President an annual additional expense allowance of $50,000 for this purpose which would not force him to use his personal salary for the payment of what are really official expenses of the United States. A provision to this effect is included in section 1 of the proposed bill. In speaking of the expenses of living in the White House, former President Hoover said (hearings, p. 57): I should think the American people would be perfectly willing and glad to see the Government give board and lodging to the President. He does not get it now for he must pay his own board and that of numerous other people. He gets his lodging free but even there he has to pay part of the upkeep cost. I should think the minimum cost to the President is somewhere between $25,000 and $30,000 a year of conducting the White House in such a fashion as it should be conducted. He must receive a great many guests that he cannot charge to his allowance account, and so forth. We want the White House to be the leading and gracious home of the Nation. At least, I feel the American people would want that to be. SALARY AND EXPENSES OF THE VICE PRESIDENT The salary of the Vice President of the United States was first fixed at $5,000 a year in 1789. Successively, it was increased to $8,000 in 1853, to $10,000 in 1873, to $12,000 in 1907, to $15,000 in 1925, and to $20,000 by the Legislative Reorganization Act of 1946. The bill proposes to increase his salary to $30,000 a year. The Vice President receives no expense allowance nor is he furnished a house. The bill proposes to pay him an annual expense allowance of $10,000. The subcommittee also recommends that the Committee on Appropriations give immediate consideration to the needs of the office of the Vice President for clerical, secretarial, and other staff assistants, with a view to meeting such needs by an adequate appropriation allotment. Former President Hoover stated (hearings, p. 55) that the Vice President "has always been underpaid." He added that a Vice President does some official entertaining and that it would be a great relief to the President if the Vice President could take over what we colloquially refer to as "the VIP business." That would be a very great drain on the modest income that the Vice President receives now." SALARY AND EXPENSES OF THE SPEAKER OF THE HOUSE The pay of the Speaker of the House, originally fixed at $12 a day, was changed to an annual salary of $3,000 a year in 1816, and reverted to a daily rate, $16, the next year. It was raised to an annual salary of $6,000 in 1856, to $8,000 in 1866, to $10,000 in 1873, to $12,000 in 1907, to $15,000 in 1925, and to $20,000 in 1946. The bill proposes to increase his salary to $30,000 a year. Like other Members of the Congress, the Speaker receives a $2,500 annual tax-free expense allowance. The bill proposes to increase this allowance to $10,000 a year. Like the Vice President, the Speaker is the head of an arm of the legislative branch. He is second in line of succession for the Presidency. The subcommittee, therefore, could not justify a differentiation between the salary and allowances being proposed for the Vice President and those of the Speaker of the House. LEGISLATIVE HISTORY OF THE PROPOSED BILL In July 1947, the chairman of the Senate Post Office and Civil Service Committee appointed the present subcommittee to study and report on a bill to increase the pay of top Federal officials. Such a bill, S. 1537, had been introduced by Senator Ralph E. Flanders (for himself and Senator Baldwin) in June 1947. The subcommittee is composed of Senator Ralph E. Flanders, of Vermont (Republican), chairman; Senator Raymond E. Baldwin, of Connecticut (Republican); and Senator Herbert R. O'Conor, of Maryland (Democrat). During the latter part of 1947 the subcommittee made an inventory of civilian positions in the executive branch of the Federal Government paying annual salaries of $9,975 or more a year. A copy of the subcommittee's statistical report of this inventory is appended to this report. After a study of the whole top-bracket salary problem, the subcommittee drafted and recommended a set of provisions which upon approval by the Senate Post Office and Civil Service Committee became title III of a revised bill, S. 1537, Eightieth Congress. These provisions, of which the present bill is a development, were the subject of extensive subcommittee and committee consideration during the Eightieth Congress. If enacted into law, they would have marked the first successful attempt to deal, on a comprehensive, realistic basis, with the salaries of heads and assistant heads of departments and agencies. The bill as a whole was reported favorably to the Senate on April 1,1948 (Rept. No. 1113). In the Senate, however, title III was stricken from the bill on June 19, 1948, by an amendment offered from the floor during the closing hours of the Eightieth Congress. On December 13 and 14, 1948, the subcommittee held public hearings on the same top-bracket salary problem. The following witnesses gave oral testimony: WITNESSES From the Executive Office of the President: Hearings, James E. Webb, Director, Bureau of the Budget, Executive Office of the President; accompanied by Roger W. Jones, Assistant to the Director; Elmer B. Staats, Assistant Director in Charge of Legislative Reference; Fred E. Levi, Executive Assistant, Division of Administrative Management; and Joseph E. Winslow, Adviser on Personnel Management From the General Accounting Office: Lindsay C. Warren, Comptroller General of the United States; accompanied by Frank L. Yates, Assistant Comptroller General; and William L. Ellis, Assistant to the Comptroller General__ From the Commission on Organization of the Executive Branch of the Gov ernment: The Honorable Herbert Hoover, former President of the United States, John A. Stevenson, president, Penn Mutual Life Insurance Co., and Arthur S. Flemming, president, Ohio-Wesleyan University, and Com- page 7 23 53 58 64 72 |