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Thursday, April 22, 2010

Federal and Private Pay

Paul Light argues for pay caps for federal contractors and grantees:

[Congress] should consider pay standards for public leaders of all kinds, and not just those who work in charitable organizations. Some of these leaders receive their checks directly from the U.S. Treasury, but many others are hidden from view because their salaries are paid through contracts or grants. But no matter how they get their pay, they are all public leaders nonetheless, and are bound by a common commitment to what Alexander Hamilton called "extensive and arduous enterprises for the public benefit."

The Obama administration is starting to get the point. Its "pay czar" capped CEO salaries at bailout banks at $500,000 per year, and is working to find some answer to the compensation puzzle on Wall Street. The administration is also beginning to wonder whether it is time for a cap on total compensation for its contractors and grantees.

If there is to be a cap, it should not be a penny more than the $223,500 that the chief justice receives. The nation would quickly find out how long the penury toward government's top officers will last. Contractors and grantees would fight the cap with every lobbying dollar they have, of course. But if Congress and the president stand firm, perhaps they can restore at least some balance to the CEO pay scale.

The Hamilton quotation is from Federalist 72. Hamilton was not talking about compensation, however. Instead, he was arguing against presidential term limits:

Even the love of fame, the ruling passion of the noblest minds, which would prompt a man to plan and undertake extensive and arduous enterprises for the public benefit, requiring considerable time to mature and perfect them, if he could flatter himself with the prospect of being allowed to finish what he had begun, would, on the contrary, deter him from the undertaking, when he foresaw that he must quit the scene before he could accomplish the work, and must commit that, together with his own reputation, to hands which might be unequal or unfriendly to the task.

In any case, federal pay is not all that bad:

Federal employees earn higher average salaries than private-sector workers in more than eight out of 10 occupations, a USA TODAY analysis of federal data finds.

Accountants, nurses, chemists, surveyors, cooks, clerks and janitors are among the wide range of jobs that get paid more on average in the federal government than in the private sector.

Overall, federal workers earned an average salary of $67,691 in 2008 for occupations that exist both in government and the private sector, according to Bureau of Labor Statistics data. The average pay for the same mix of jobs in the private sector was $60,046 in 2008, the most recent data available.