Interview with Chairman Paul A. Volcker

Paul A. Volcker is the Chairman of the National Commission on the Public Service. The Commission recently released its report, “Urgent Business for America,” which contains 14 recommendations for improving the state of the federal public service. Volcker also chaired the first National Commission on the Public Service (“The Volcker Commission”) in 1988. He previously served under Presidents Carter and Reagan as Chairman of the Board of Governors of the Federal Reserve System.

_Q:The Commission has recommended an immediate and significant increase in judicial, executive and legislative salaries. In the current economic climate, how palatable do you think pay increases for members of the executive and judicial branches will be to Congress?

_A: It is never easy. I just heard today that the Administration was proposing something along this line, consistent with our report, but it is never easy, particularly on the legislative side. Among other recommendations we made is that it really was urgent to go ahead with [pay increases at] judicial and senior executive levels. If the Congress didn’t want to increase their salaries for understandable political reasons they shouldn’t prevent these other areas from having some reasonable adjustment.

_Q:An immediate and substantial increase in judicial salaries was singled out by the Commission as one of Congress’ first priorities. Why did the Commission feel this step was so important?

_A:Because we thought we had a persuasive case made to us by the people from the Supreme Court, including the Chief Justice and others. They emphasized that judicial salaries hadn’t kept up with the cost of living for a decade or so, contrary to the intent of the Congress. We felt the case was pretty compelling that a federal judge’s salary, which at the district court level is $150,000 a year, was out of line with a minimal professional criteria. A lot of lawyers want to be judges. I’ve been told on numerous occasions since our report, there’s not any shortage of applicants. But the question of getting the best applicants and having them stay seems to us relevant. With judicial salaries well below those of their professional peers, not in the private sector, but in the nonprofit sector, or in universities, the time has come for a change. $150,000 isn’t much more than what neophyte associates make in major law firms these days.

_Q:The Commission has recommended breaking the statutory link between the salaries of Members of Congress and those of judges and senior political appointees. You make some persuasive arguments for this action, but how do you persuade Congress to ignore the political difficulties when they lose the cover provided by the current linkage?

_A:When push comes to shove, Congress generally wants to keep that link. However, one of the things that is changing is that individual agencies have made pleas to the Congress to get some relief on the salary and other fronts. Some of them have been successful, but its been done very much piecemeal, hit-or-miss. What we are really suggesting is a rationalization of what’s going on anyway.

_Q:For many years, the words “Washington bureaucracy” have been used as an epithet. How can we change the view of federal service to make it more attractive to young people?

_A:This is something I’ve been concerned about, personally, for years and years. I am a great supporter of the civil service in general. It obviously has problems. There are certain characteristics of bureaucracies, whether they’re in government or private sector, that are not necessarily attractive. But we need them. And we want to improve them. The whole thrust of this report really is to create an environment that will be attractive to young people and to the best, and will prove itself over time in gaining more respect from the public. I think what we must do better is deal with legitimate complaints about performance, the difficulty of recruiting and the rigidity of the salary and promotion structure. We need personnel practices that maximize the chances of keeping the best, but deal with the underperformers as well. That’s the thrust of our report. No magic bullet.

_Q:Twelve years ago, you chaired the first “Volcker Commission.” Why did you agree to take on the leadership of the current Commission? What level of success did the first Commission enjoy and are the prospects for implementation of the current Commission’s recommendations different today?

_A:We face much the same problems as in the first Commission. We certainly haven’t made as much progress as we would have hoped. In fact I think things have gotten worse in terms of trust in government and respect for the bureaucracy, and in a sense of government being able to do the right thing. There was a period right after 9-11 when suddenly, right here in New York City, where everybody is focussed on financial markets and how to make money in the stock market, when suddenly the heroes were the policemen and the firemen, who obviously are not living on the scale of all those people in financial markets. But when you had a crisis you had to realize that they were necessary. The fact is they put themselves on the line and acted capably and even heroically. And they are civil servants. They are part of the bureaucracy that people disdain-except when they need them.

_Q: The Commission report states that the federal government is neither organized nor staffed nor adequately prepared to meet the demands of the 21st Century. If government adopts all your recommendations, will that situation change?

_A:Well, we certainly think so. But let me emphasize that our recommendations are very broad and general. People ask, ‘have you got a blueprint?’ And it made me stop and think. Our report is not really a blueprint. We don’t go into detail. We don’t go into the nuts and bolts. We set a general framework, a kind of vision, for the way we think the government ought to be organized, wholly aware that the particular pieces have to be put in place. And not just details. There are very important policy issues that have to be dealt with as part of the implementation. So we’ve provided what I think of as an architectural rendering where somebody else- the Congress, the experts, the Administration-are going to have to do the detailed blueprints.

_Q:What is your time frame on this? And what plans does the Commission have to work for the implementation of its recommendations?

_A:We don’t think it would be appropriate, or possible or efficient to just revamp the whole government right away on the lines that we have suggested. What we would like the Congress to do is pass some enabling legislation that would permit particular reorganization proposals of the President to, in effect, be put on a fast track, and the Congress could vote up or down. What we’d like to see done, ideally this year or certainly next year, is for Congress to pass that kind of enabling legislation that would set some important parameters for reorganization, including how you protect the workers from partisan influence and from arbitrary actions in various directions. Some of the traditional protections that the civil service have, that are still relevant, should be incorporated. That should be possible even this year. That takes congressional sponsorship and I’m happy to say there are some indications that some people in the Congress are interested. I’m not saying its an overwhelming issue in the Congress-it’s not, it never is. But what it takes is some people in leadership positions who are willing to sponsor legislation.

_Q:Since the first Volcker Commission reported on the so-called “Quiet Crisis,” the federal work force has changed. In 1989, publicity about top scientists, physicians, and researchers leaving government for the private sector provided the public outcry justifying Congress’ action to give its members and other high-level civil servants pay increases. But these outcries no longer exist because Congress has broken the pay “link” with medical and scientific communities and has enacted legislation allowing them to be paid substantially more. Congress has also allowed agencies like the Internal Revenue Service and the Federal Aviation Administration to break the pay cap. How will these developments affect the work of your Commission?

_A:We think the problem is bigger now than it was a decade or two ago. But it is true that in some of the particular pressure points, there have been changes. Let’s take the SEC, just to pick one because it has been in the news. The SEC, I think by general consent, has not been able to deal at all effectively over the past decade with the increased complexity and activity in the financial markets. For whatever reason-they’ve been too small, or their pay is not adequate to attract and keep the kind of young people they need to attract, or complexity has increased-their expertise has declined. So they’re going to have to catch up. Right now there is legislation that permits more flexibility in hiring retention for the SEC and it certainly would merit a bigger budget. That’s just one illustration of the kind of problem we have. What do we do with all of the worry about terrorist acts, weapons of mass destruction, and biological weapons? When something happens, people immediately say, ‘Where’s the government?’ Where are the experts? What do we know about anthrax? Where’s the Center for Disease Control? This stuff requires a degree of expertise and background and research that the government has let lag.

_Q:During your career in government service, you served under five Presidents. What are some of your reflections on-or lessons learned from-that experience?

_A:Lessons learned! What bothers me most-and this is partly a matter of aging-is that the kind of enthusiasm that I and many of my peers had 50 years ago in entering government, the sense of excitement you had, the sense of being part of something really important, nationally and internationally, doesn’t exist to the same extent now. In a sense, that was an odd period after World War II. The United States was victorious and felt that it had a mission in the world. Indeed it was doing all kinds of things to not only pull the United States out of depression and recession and assure prosperity at home, but also new social programs, and the Marshal Plan and NATO, and so forth. It was quite a different atmosphere. People were attracted to going into government. And I think that the general feeling was, at the upper levels, that government was attracting a reasonable proportion of the best and most talented and most dedicated. That feeling hasn’t disappeared entirely, thank God, but it has been greatly watered down and dissipated for a variety of reasons. That’s the only reason I got involved in these two Commissions. I still think government is important. But I don’t think the government service has the same old zest, and that’s got to be changed.

To read the Volcker Commission’s report, Urgent Business for America go to www.uscourts.gov/newsroom/VolckerRpt.pdf