THE BLOG
12/13/2006 02:59 pm ET | Updated May 25, 2011

A Challenge To Pelosi And Reid On Minimum Wage

Speaker-Elect Nancy Pelosi did a shrewd thing this past week, but few people noticed it in the midst of the media storm surrounding the Baker-Hamilton ISG report. She effectively linked congressional pay raises to raising the minimum wage, as she had promised to do before the election. This shines the spotlight of hypocrisy on members of Congress who are quite content to raise their own wages (a whopping raise of almost one-third the amount of a yearly minimum-wage salary this year alone), without also helping out the millions who depend on that minimum wage to survive.

But I have to say, as brilliant a political move as this is for Pelosi, it just doesn't go far enough. There are better ways these issues could be linked, with more far-reaching consequences -- for both minimum-wage earners, and Congress as a whole -- that have not been addressed.

I last wrote about this issue back in June, when taking control of both houses of Congress was just a wild Democratic fantasy. I need to update my remarks, now that such dreams have become reality. Because inequality and political hypocrisy about the issue still do exist.

Some history is in order here. Up until 1989, Congress had to actually proactively vote themselves pay raises. These votes were politically embarrassing to everyone involved, and they would usually happen in the dead of night on a Friday... or any other time congressfolk hoped the media were looking the other way. Because they got tired of getting political heat back in their own districts for such votes, they changed the rules (note that Democrats were still in control, so this can't be blamed on Republicans). From 1989 onwards, they got an automatic pay raise, euphemistically called a "Cost Of Living Adjustment" (COLA). The rules changed so that (this is either Orwellian or something out of Wonderland, I haven't quite decided which), if Congress doesn't vote to deny themselves a pay raise, they got one... automatically.

Got that? If they do nothing, they get a raise. If they hold a vote against a pay raise and it goes through, then they don't get a raise. Pretty sweet to be a Congressman, huh?

The ratification of the twenty-seventh Amendment to the Constitution in 1992 tried to stop this, but federal courts have (unbelievably) ruled that a COLA is not actually a raise per se, so therefore it's OK. [The story of the ratification of Amendment XXVII is fascinating, and one of my favorite stories in all of American history, but I just don't have room to go into it here.]

For the last 17 years, Congress has received a yearly automatic raise, except when their collective altruism arises to deny themselves extra money. This has actually happened (at least five times), mostly during the early years of the Republican takeover ('94, '95, '96, '97, and '99). I can't vouch for its accuracy, but here is an interesting table of congressional salaries versus the minimum wage that goes back to 1938.

Getting back to the present, though, we need to focus on the exact maneuver Pelosi used to stop this year's pay raise (which would otherwise have automatically gone into effect January 1, 2007) to understand why this may just be political sleight-of-hand.

Because Congress has yet to pass a complete budget for fiscal year 2007 (which began for the federal government on October 1 of this year), and because congressional Republicans refused to pass one in the lame-duck session before Democrats take over in January; a "continuing resolution" was required. This basically says: "We haven't passed a budget yet, so all federal agencies have the authority to keep spending money at 2006 levels until we get our act together." It should be noted that (if this bill doesn't pass) the federal government shuts down -- because it therefore will have no authority to pay anybody anything (Remember Newt's shutdown? This is how it happened).

Nancy Pelosi told the Republican lame-duck leadership that such a continuing resolution bill would not pass... unless it had an amendment to deny the COLA (pay raise) to Congress for 2007. But (more importantly) this only denies the raise while the continuing resolution is in effect (it expires February 15th next year). So if Pelosi does nothing next year, Congress still gets their raise, just a few weeks late.

The raise in question is 2%, which would raise congressional pay $3,300 per year. So delaying it until February will cost each member of Congress only $380. This is a raise for congresspersons (it should be noted), from $165,200 per year to $168,500. For comparison, the current minimum wage ($5.15/hr.) is $10,712 per year.

When you look at the details, Pelosi's "bold" move looks a whole lot more timid than it sounds. It plays well for people who don't pay attention to details ("Pay no attention to the man behind the curtain!"), but not so much for those of us who put Washington under a microscope regularly.

Of course, Pelosi could be serious about addressing the inherent hypocrisy. This was only a single parliamentary maneuver designed to deny congressional Republicans one last shard of power as they pack up their offices and go home -- so it shouldn't be judged on a stand-alone basis. The real test is what legislation Pelosi links this to in the new year.

She may indeed be serious, since the issue was listed as a bullet point on her "Six for '06" campaign platform. Under the heading "Better American Jobs -- Better Pay" is: "Prohibit the Congressional pay raise until the nation's minimum wage is raised."

Since she just announced yesterday that Democrats will be punting on the 2007 budget completely (in order to focus on the 2008 budget), this means that the government will be funded all year long by a series of continuing resolutions (this, admittedly, was done for more political reasons than one -- the biggest of which may have been to deny the exiting Republicans all the outlandish earmarks that they were trying to stuff into the 2007 budget, which is indeed a worthy goal).

Over on the Senate side of the Hill, Majority-Leader-Elect Harry Reid sounds equally adamant. In a recent interview with Bob Geiger, Reid had the following to say about the issue:

"To show you how strongly we feel about this, we told the Republicans that there will be no Congressional pay raise unless you raise the minimum wage. There's no minimum wage increase, there's no Congressional pay raise for the first time in many years. We're serious about this. We want the people in this country, the hardest working, to be able to work instead of going on welfare and make a living. Right now, you can't do that. You make a little over $10,000 a year working 40 hours a week -- try living on that. It's very hard to do. So I feel comfortable that we can pass a minimum wage increase. I guess I put it in this vernacular: I dare the Republicans to stop us from doing it."

Bold words indeed; but what we may need here is: bold deeds in words.

Bigger and more sweeping changes should be linked to the issue of pay for both Congress and some of America's hardest workers. Because raising the minimum wage has such broadbased support (across virtually every demographic in America), such a populist issue should be tied to other congressional reforms which may otherwise be politically hard to pass among entrenched members of Congress. These are reforms which may be good for the country as a whole, and which would also gain support for Democrats among the electorate in the long run... but which may be painful for congressfolk to accept in the short term.

Here are three possible fundamental and comprehensive reforms of the current system, any one of which Pelosi and Reid would be smart to get behind:

(1) Remove Congress' COLA altogether.

Force votes on raising Congressional pay, the way it used to be done. If Congress thinks it has done such a great job that it deserves a raise, then they should have to justify it to the voters each and every time. Also, follow the letter and the spirit of the 27th Amendment by making such raises only apply to the next Congress -- after voters have had a chance to respond at the polls. This would go a long way toward regaining some respect for Congress outside the Beltway.

(2) Give minimum wage workers the exact same COLA Congress enjoys.

Raise the minimum wage every year, automatically -- by the same rate as the congressional COLA. What's good enough for Congress should be good enough for minimum wage workers, right? After initially raising the minimum wage to $7.25, every year thereafter raise the minimum wage by the same percentage COLA that Congress gets. For example, a 2% raise (what Congress would have gotten this year) would raise the new minimum wage fifteen cents, to $7.40. This would be the fairest plan of all, easily understood by the public as doing what's right for everyone.

(3) If the budget's not done, Congress doesn't get paid.

Address the recurring problem of late budgets (or even non-existent budgets, as Pelosi is proposing for 2007) in a very simple way: if all of the budget bills haven't been passed and signed into law on the first of October, then Congress stops getting paychecks until a budget is in place (OK, since the Republicans dumped the current mess on Democrats this year, make the law not go into effect until next year). Several states already have variations of this law. It's simple to state -- if legislators can't manage to perform one of the core functions of their job (passing a budget on time) then they don't get paid. Simple as that. Very easy to understand. With such a law in place, my guess is that Congress will get all its work done by the October 1st deadline each and every year afterwards, since they'll have such a strong motivation for doing so.

Democrats should be using the political capital they gained in the last election to propose sweeping changes in the way Washington works -- not just tinkering around the edges. Neither Reid nor Pelosi have proposed actually foregoing the 2007 pay raise, you'll notice -- they just won't let it go through until a minimum wage raise passes.

But politically, if they attempted to give minimum wage workers their own COLA, they would achieve exactly the same political result as they did when they gave themselves an automatic COLA -- they would never have to vote on the minimum wage issue ever again. This would end Republican obstructionism on the issue, forever. And since this issue polls astronomically high with the American people, Democrats could claim it as a major political accomplishment, almost immediately.

Now that Democrats have won the leadership of Congress, they need to show that they can lead in bold and new directions. This is a perfect opportunity to show they are indeed capable of doing so. I challenge Nancy Pelosi and Harry Reid to consider these suggestions, and act on them in January.

 

[If you agree, please let them know:]

Majority Leader Elect Harry Reid:

Speaker Elect Nancy Pelosi: