Pay, relocation costs deter potential appointees

The salaries of top political appointees have dropped more than 30 percent in inflation-adjusted terms since 1969, and federal relocation benefits offer people few incentives to work in Washington, according to two new reports.

Political appointees' salaries have climbed more slowly than middle-income salaries in the private sector over the last 30 years, according to one of the reports, "How Much Is Enough? Setting Pay for Presidential Appointees." The report was commissioned by the Presidential Appointee Initiative, a project of the Brookings Institution, a Washington-based think tank.

"At a time when the wage gap between ordinary workers and highly compensated ones was growing, the difference between top federal office holders' salaries and the wages of ordinary workers shrank," wrote Gary Burtless, a senior fellow at Brookings, in the report.

Burtless argued in the report that current salaries for top political appointees are not only substantially less than those of their private sector counterparts, but that, when inflation is factored in, their salaries are much less today than they were during the Nixon administration.

For example, Cabinet secretaries made $60,000 in 1969, which was 5.6 times the median income at that time. In 2000, the salary of a Cabinet secretary was $157,000-2.5 times the median income. Most political appointees work below the Cabinet level and cannot make more money than Cabinet officers, so "it follows that most presidential appointees now receive salaries that are worth substantially less than the incomes earned by their counterparts in the early Nixon administration," Burtless concluded. The rate of growth in salaries for appointees over the last 25 years is closer to the rise in earnings of blue-collar factory workers than to the increase in pay for their counterparts in the private sector, according to Burtless' report. From 1977 to 2000, the annual earnings of college-educated men between 45 and 54 years of age increased 5.2 percent each year, while salary increases for Cabinet-level positions averaged about 3.8 percent per year. The wage gain for blue-collar factory workers grew 4.5 percent each year from 1977 to 2000, the report said.

Political appointees, with the exception of Cabinet-level officials, cannot make more money than members of Congress. The pay cap for political appointees this year is $150,000, although Cabinet-level officials can make up to $166,700. The salaries of career senior executives are also tied to congressional salaries. The current pay cap on their base plus locality pay is $138,200.

Seventy-one percent of respondents in a 2001 survey conducted by Princeton Survey Research Associates as part of the Presidential Appointee Initiative said better pay would make their jobs more attractive.

The pay disparity between political appointees and their private sector counterparts, together with the rising cost of living, particularly in Washington, makes relocation benefits and bonuses even more important, according to Brookings' Carole Plowfield, author of the second Presidential Appointee initiative report, "Problems on the Potomac: How Relocation Policies for Presidential Appointees Can Help Win the Talent War."

While private sector companies can pay the closing costs on a new home or help relocating employees sell their homes, the government does not offer the same benefits to political appointees or members of the Senior Executive Service.

The relatively high cost of living in Washington could deter talented and diverse people from outside the Beltway from taking political appointments, "increasing the likelihood that presidents will appoint officials who already live in the area," Plowfield wrote. To improve federal relocation benefits, Congress could make new appointees eligible for the same travel reimbursements available to transferees within the federal government, the report suggested.

Mobilizing political forces to tackle the issue of pay compression and educating the public about the pay discrepancies between appointees and their counterparts are essential if the government hopes to attract more top people to government, said Frank Carlucci, former secretary of Defense during the Reagan administration.

"People are now realizing how important government and government officials are to their lives," he said.