Americans are right to be outraged about taxpayer-funded bonuses. These bonuses are paid every year, usually with no public scrutiny. The folks getting the bonuses feel that they are entitled to them, regardless of their performance. It’s an unfair system that the American people shouldn’t have to put up with, especially in these tough economic times.
Sounds a lot like the American International Group scandal, doesn’t it? But it’s not. We are talking about the automatic annual “bonuses— given to Members of Congress.
Every year, often without public debate or even a vote, Members of Congress get a bonus, although some prefer to call it a cost-of-living salary adjustment. This backdoor pay raise system, which has been in place for 20 years, has put Congress in the rare position of being able to raise its own pay every year without bringing up the subject.
The AIG scandal has put the spotlight on taxpayers footing the bill for bonuses in a year where the economy is the worst it’s been since the Great Depression, and more and more Americans have lost their jobs. Automatic bonuses for Members of Congress have always been a bad idea, but today, with so many Americans struggling to get by, they are outrageous.
If there is a silver lining in the current recession, it is that Congress is finally starting to recognize the need for ending this system of automatic bonuses. After allowing itself a pay raise last year, Congress passed legislation to scrap the pay raise for 2010, and more recently the Senate passed a bill to end the stealth pay raise system once and for all.
Now it’s up to the House to live up to its reputation as the “people’s body— by taking up and passing this bill. For years the idea of ending this system has been a non-starter on Capitol Hill — most Members wouldn’t even consider changing a system that gives them an automatic bonus every year. But in this economy, and the wake of the AIG bonus scandal, the idea of ending the automatic pay raise should change from a non-starter to a no-brainer.
Debate about Congressional pay raises has been around for a long time — 220 years to be exact. James Madison advocated for an amendment saying that Members can’t get a pay raise until they are re-elected by the people.
The House and Senate passed that amendment in 1789, but it wasn’t until 1992 that it was ratified, becoming the 27th Amendment to the Constitution. It reads: “No law, varying the compensation for the services of the senators and representatives, shall take effect, until an election of representatives shall have intervened.—
At the very least, the stealth pay raises permitted under the current system violate the spirit of that amendment by allowing Members to get annual bonuses without any accountability.
The current system of automatic Congressional pay raises is an abuse of public funds and the public trust. And that brings us back to AIG. The outcry over those bonuses isn’t just about AIG itself. It’s about the fundamental unfairness of executives at failing companies getting retention payments while the taxpayers — many of whom are struggling to make ends meet — are bailing out their firms.
Congress should do everything it can to get the AIG bonuses back and make the taxpayers whole. But, at the same time, we have to put our own house in order. If Members of Congress are going to rail against AIG’s bonuses, they shouldn’t expect to get their own automatic, taxpayer-funded bonuses either.
Sen. Russ Feingold is a Democrat from Wisconsin. Rep. Jim Matheson is a Democrat from Utah.