August 2007

Judicial Salaries Lag Behind Other Federal Employees

Any discussion of judicial compensation inevitably leads to the issue of linkage—the tradition of matching the pay of Members of Congress, deputy cabinet secretaries and executive agency heads to those of U.S. district court judges. However, a recent Brookings Institution study, How to Pay the Piper: It’s Time to Call Different Tunes for Congressional and Judicial Salaries, showed that linkage has had no bearing on keeping salaries at adequate levels, and in fact has had a detrimental impact on keeping salaries up with the cost of living. Moreover, salaries in the executive branch, which have been delinked from those of Members of Congress and the Judiciary, are closer to keeping pace with the cost of living. Last spring, when appearing before a House subcommittee, Justice Stephen Breyer flipped through a ream of vacant executive branch positions, each paying more than a federal judge’s or a Member of Congress’ salary.

Justices Breyer and Samuel Alito testified on federal judicial compensation at a hearing held by the House Judiciary Committee Subcommittee on the Courts, the Internet, and Intellectual Property. In the course of the justices’ testimony, both compared judicial salaries to salaries in the private, nonprofit and academic sectors—and judicial salaries suffered greatly by comparison. There was, as Justice Breyer expressed it, “the significant widening of the chasm.”

Justice Alito added that judges’ salaries haven’t just eroded when compared to those of their peers in the nonprofit sector, in academia and in the private sector; they’ve also been permitted to lag behind the salaries of other federal employees.

How did this happen?

“Since the enactment of the Ethics Reform Act of 1989, the salaries of numerous career federal executive branch employees have been delinked from the salaries of Members of Congress and federal judges,” Justice Alito told the subcommittee. “As a result, the federal salary structure has become inverted, so that rank-and-file employees may now be paid salaries well above those of constitutional officers.”

The Brookings Institution study reported that executive agencies offer salaries above $165,200 “to significant numbers of individuals who have less responsibility and impact than agency heads, deputy secretaries, members and district judges. This is because Congress has exempted specific executive branch departments and independent agencies from government-wide pay and personnel restrictions in Title 5 of the U.S. Code.”

Justice Breyer offered the examples of the Federal Deposit Insurance Corporation, and the Securities and Exchange Commission, among others, that offer salaries to lawyers, accountants, and economists, as well as to administrators and other professionals, of $200,000 or more.

“The Office of Thrift Supervision, for example,” Justice Breyer said, “recently recruited for five high-level positions, offering annual salaries of up to $305,166.” Legislation helped the Department of Veterans Affairs establish a compensation system in which the aggregate compensation for federally employed physicians and dentists is capped only by the Presidential salary, which is currently $400,000. According to the Office of Personnel Management, these pay authorities have been extended administratively to the Departments of Defense, Health and Human Services, Justice, and the Federal Aviation Administration. A federally employed pharmacist or scientist at DHHS may be paid up to $200,000 annually. Since 1998, the Internal Revenue Service has been statutorily able to fix the salaries of up to 40 key officials at the Vice Presidential salary, which is currently $215,700.

As the Brookings report stated, these salaries are allowed because Congress recognizes that it is in the government’s own interest to recruit and retain the most highly qualified individuals to deliver and manage its essential services. “But fear of voter hostility precludes Congress applying the same understanding to those who make the nation’s laws and apply them through executive policy and judicial decisions,” the report said.

“In recent years, federal departments and agencies with increasing frequency have convinced friendly congressional oversight committees to exempt them from all or part of the pay and personnel restriction of Title 5, U.S.C.” explained Justice Alito. “Stated differently Congress has already determined to break the link in compensation between employees in the executive branch and officers and employees in the legislative and judicial branches whose annual pay is now capped at $165,200.”

As a consequence, according to Justice Alito, it is not uncommon to find federal employees in the executive branch, as well as in the banking and financial government agencies who are paid significantly more than justices and judges in the federal courts, and Members of Congress. In fact, based on these pay policies, Justice Alito concluded that a district judge who presides over an SEC case “may be the lowest paid attorney in the courtroom.”

In 2003, the National Commission on Public Service recommended that “Congress should break the statutory link between the salaries of Members of Congress and those of judges and senior political appointees.” The Commission said that the pay gap at the top of the salary structure “is indisputable, as are its consequences in lost morale and uncertain accountability.”