How to Fix the Judge Salary Problem

Judge recruitment, as well as retention, is imperiled by the continued failure of Congress to address judicial salaries. And so is our democracy.
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For too long, federal judicial salaries have been stagnant. Repetitive efforts to raise them have become so politically charged that merely the suggestion of legislation to raise salaries at this time is wishful thinking. But ignoring this problem now, during America's worst economic crisis since the Great Depression, is unacceptable. If a significant problem of underpayment existed before the economic crisis, it is far greater today and something must be done to address it.

The issue of judicial pay has grown significantly worse over the years. In 1989, former Chief Justice Rehnquist spoke about the inadequacy of judicial salaries and described it as "the single greatest problem facing the Judicial Branch today." Federal judicial pay did not improve in the ensuing years. In 2006, Chief Justice Roberts declared that the failure to raise judicial pay is a "Constitutional crisis that threatens to undermine the strength and independence of the federal Judiciary."

In 2007, Paul Volcker, the former Chair of the National Commission on Public Service, and now an economic advisor to President Obama, pointed out that if district court judge salaries had kept pace with average American worker wages from 1969 to 2006 they would now be paid $261,300 - in stark contrast to their current salary of $165,200. In a 2008 public statement, ABA PresidentKaren Mathis called the situation "unusual and destabilizing. . . . We are at the point where the erosion in pay is clearly discouraging the best private lawyers from entering the judiciary. And increasingly, judges are leaving the bench at what should be the height of their public careers because of financial pressures."

Recruitment, as well as retention, is imperiled by the continued failure of Congress to address judicial salaries. Now that deficits are of great concern, what was politically unpalatable has become effectively toxic. Judicial excellence is at stake. The likely pools of recruits are either (1) those so rich that pay does not matter, and (2) those to whom the low pay amounts to an increase. As our Chief Justice considered this, he commented, "Do not get me wrong - there are very good judges in both of those categories. But a judiciary drawn more and more from only those categories would not be the sort of judiciary on which we have historically depended to protect the rule of law in this country." Consider the risks inherent in having our affairs decided by jurists from only those two sources. Statistically, that is what is happening. In the 1950's, about 65% of our federal judges came from the private sector and the balance from the public sector. Today, the ratio is almost reversed, with the public sector sourcing 60%. The experiential value of a private practice has served America's bench well, and we are losing it due principally to one practical reality: Congress does not possess the will to pass a pay increase for federal judges.

We have to be more creative in addressing the problem - even in these difficult economic times.

Congress should extend the tax benefits of parsonage from clergy to include federal judges.

In the early part of the last century, Congress promulgated an exclusion from income for the rental value of the housing provided to duly ordained, commissioned or licensed members of the clergy. The annual rental value of a church-provided parsonage is an exclusion from gross income, rather than a deduction. Alternatively, a member of the clergy may exclude the cost of his/her housing from taxable income. The allowance is capped at fair rental value, including furnishings and appurtenances (such as a garage), plus the cost of utilities.

The annual amount of the clergy's costs of ownership is excluded from taxable income, as long as the costs do not exceed the fair rental value of the home. If a minister owns a home, the amount excluded from the minister's gross income as a housing allowance is limited to the least of the following: (a) the amount actually used to provide a home; (b) the amount officially designated as a housing allowance; or (c) the fair rental value of the home.

While not a direct pay raise, a parsonage tax exclusion for the judiciary would be a welcome financial benefit to our beleaguered federal judges. Indeed, a parsonage tax exclusion has some interesting collateral benefits.

First, because it is a tax exclusion based on existing pay, it will have a lesser effect on the national treasury than a pay raise that would also raise corresponding retirement benefits and other salaries tied to federal judicial salaries.

Second, extending this same tax advantage to federal judges would have a progressive benefit. Those who must pay more due to court service in the vicinity of expensive housing or utility markets would receive a greater benefit than those able to secure less expensive housing or lower cost utilities. (To avoid any abuse, an upper limit on parsonage for federal judges may be added.)

Third, the parsonage tax exclusion would be a flexible and variable way of addressing the largest expense encountered by judges on a fixed salary. Between 1969 and 2006, federal judicial salaries were stagnant and did not keep pace with the average American worker. The overall price level as measured by the Consumer Price Index during that same period has increased 433%. In the same time period, the average cost of housing rose 182%. If there had been a parsonage tax exclusion, the negative impact of the escalating cost of housing would have been partially offset.

Something must be done to overcome legislative paralysis. This goes to the core of our democracy. Justice Kennedy succinctly stated what is at stake in testimony before Congress when he said, "Without a functioning, highly qualified judiciary, no nation can hope to guarantee the prosperity and secure the liberties of its people....We are in real danger of losing, through gradual but steady decline, the highly qualified judiciary on which our Nation relies."

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