The Panel has had called to its attention the fact that existing law provides smaller annuities for the widows of Supreme Court Justices than are provided in other comparable situations. We recommend that the Congress be asked to take appropriate action to bring this legislation up to date. We recommend that the salaries of the Speaker and the Vice President be advanced to $60,000, and that their present allowances of $10,000 be increased to $15,000. We recommend that the salaries of the Members of the Congress be advanced to $35,000, of which $5,000 should be deductible for income tax purposes to offset their living expenses. We recommend that the Congress increase proportionately the salaries of other officers of the legislative branch, fitting them into the appropriate levels of the structure recommended for executive pay. We also recommend that the Congress be urged to take appropriate action to increase very substantially the number of trips each year for which each Member of Congress may be reimbursed by the Federal Government for the conduct of official business in his State or district. We hesitate to recommend any figure for such increase, but we point out that the existing limitations relate to an era in which travel for more than a few hundred miles from Washington required absence from legislative duties for far longer periods than air travel now takes to our most distant States. We also recommend an increase to a maximum of $50 per day in the allowance for per diem in lieu of subsistence for Members of Congress in official travel status. NEED FOR PUBLIC UNDERSTANDING AND SUPPORT We are convinced that all Americans want and expect the highest competence in the conduct of national affairs. We are also convinced that the overwhelming majority of them will support substantial adjustment in executive, legislative, and judicial pay if they have assurance that more adequate compensation will provide a major incentive to our ablest men and women to serve in elective and· appointive offices in the Federal Government. In our judgment, the four men in American life best equipped by experience to convey that assurance with undisputed authority are the President and his predecessors, former Presidents Hoover, Truman, and Eisenhower. We believe that public statements by you and our former Chief Executives would do more than anything else to promote general understanding of the issues and proposals contained in this report and early consideration of our recommendations by the Congress. Furthermore, we stress the fact, and urge that it be made known as widely as possible, that in either absolute or comparative terms our proposals are not costly. The total additional salary expense of the pay scales which we suggest will not exceed $20 million a year. This is a small price for correcting the inadequacies of today's compensation, which we are convinced is so low that many able people will not accept public office. The Bureau of the Budget and the Civil Service Commission are prepared to present detailed cost figures. We are confident that important leaders of American life, 677 of whom have been canvassed by the National Civil Service League with a request for their recommendations on the salary levels for the Cabinet and the Congress, will also support substantial adjustment. In fact, of the 387 replies which it was possible for the league to tabulate, 158 agreed with figures equal to those recommended by the Panel for the Cabinet salary figure; and 115 agreed with our recommendation for congressional pay. One hundred and forty-two suggested a $30,000 figure for Members of Congress. Only 6 replies suggest no change in Cabinet pay, and only 33 suggest no change in congressional pay. We recommend that the National Civil Service League be asked to urge its respondents to make their individual views known to the leaders of both parties in the Senate and House of Representatives. Finally, we recommend that the appropriate agencies of the Federal Government be authorized and directed to supply descriptive information about our proposals to individuals and groups requesting it. EFFECTIVE DATE OF LEGISLATION We recommend that the Congress be furnished with all necessary information early enough to permit consideration and enactment of legislation along the lines we suggest in this session. We also recommend that the new pay rates be effective on January 1, 1964. We believe that this date will give time for full public discussion, and will be fair to all concerned. Furthermore, in our judgment, an effective date of January 1, 1964, coming in the second session of the present Congress, will minimize any adverse effects upon the next administration of the limitations contained in section 6 of the Constitution which, in pertinent part, reads as follows: No Senator or Representative shall, during the Time for which he was elected, be appointed to any civil Office under the Authority of the United States, which shall have been created, or the Emoluments whereof shall have been encreased during such time. We believe, Mr. President, that we have now completed all of the tasks which you asked us to undertake. With the filing of this report, we recommend that our panel be discharged. Then we shall be free to speak our minds as private citizens, not as advisers to the President of the United States. Each of us, in our years of public service, has known its obligations, its rewards, and its penalties. We should like to be at liberty to put the weight of our judgment and our experience into an effort to pay the principal officers of our Government more adequately for carrying the responsibilities imposed upon them in a democratic society. Respectfully, Clarence B. Randall, Chairman, Advisory Panel on REPORT OF THE ADVISORY PANEL ON FEDERAL SALARY SYSTEMS EXECUTIVE OFFICE OF THE PRESIDENT, BUREAU OF THE BUDGET, Washington, D.C., June 12, 1963. THE PRESIDENT, DEAR MR. PRESIDENT: I have the honor to present to you the final report of the Advisory Panel on Federal Salary Systems. In your letter of January 29, 1963, you referred to the report of the Senate Post Office and Civil Service Committee on the Federal Salary Reform Act of 1962 (Public Law 87-793) and asked us to consider three subjects: (1) appropriate levels for executive salaries; (2) the relationship between executive salaries and those payable to career employees; and (3) the relationship between executive salaries and those paid to Members of the Congress and the judiciary. The pertinent part of the Senate committee's report reads as follows: The administration was aware of the fact that salaries it proposed for top career positions would raise the pay of a number of civil servants to a level above that paid to their chiefs in Cabinet, subcabinet, and similar positions. In his message of February 20, 1962, relative to salary reform the President recognized that the salary level of these top executives has been quite properly related with the salary level of Congress, and that in his opinion both were inadequate. He indicated that representatives of the executive branch stand ready to cooperate with the Congress in determining what executive and congressional pay scales would be appropriate. Consequently the committee urges the President to recommend for consideration at the next session of Congress appropriate increases in Federal executive salaries at all levels. Such a recommendation should include salaries for all ranks up through the level of heads of executive departments. In addition, it should include proposals for a rational relationship between executive salaries under the Executive Pay Act for those under other Federal schedules. In its earlier work the panel, in the main, limited itself to the review of proposals prepared in the executive branch and already before the administration in concrete form. Our present effort differs substantially in that we are now charged with the responsibility of developing our own proposals to you on the three specific subjects listed above. We present our conclusions and recommendations as an impartial expression of judgments as to need, equity, and appropriate relationships among executive, legislative, and judicial pay scales. We have been deeply impressed by the vast growth in the problems and responsibilities of the Federal Government during the years since the end of World War II. No other period in our history has produced a parallel increase in demands upon Federal officers for the kinds of experience and ability now needed to plan, legislate, and administer programs and activities at home, abroad, and in outer space, and to provide for prompt adjudication of matters referred to our courts. We are engaged in an intensive effort to obtain better and more officient ordering of national affairs in a world of change, There stands out in boldest relief the need for excellence in all three branches of our Government. That excellence will neither be obsained quickly, nor will it be retained for adequate periods, until we compensate our top officers on a basis commensurate with the complex and difficult roles assigned to them. The panel, therefore, recommends early enactment of comprehensive legislation which will (1) establish appropriate levels for executive salaries, and (2) relate those salaries both to the salaries of career employees and to the salaries of the Members of Congress and the judiciary. The panel has had the advice and assistance of the Director of the Bureau of the Budget, the Chairman of the U.S. Civil Service Commission, and staff members of both agencies working together to prepare analytical and comparative materials for our consideration. We acknowledge their contributions to our deliberations. THE PRINCIPLE OF COMPARABILITY On April 29, 1963, you transmitted to the Congress the first annual comparison of Federal civilian career salaries with those paid in private enterprise. In your message of transmittal, you restfirmed your support of the provisions of the 1962 Salary Reform Act which adopted the principle of comparability between pay for Government jobs and the average pay for private enterprise work at the same levels. We express our hope that the Congress will take prompt and favorable action on your recommendations to establish full comparability up to grade GS-15 and to approach as near to full comparability as is feasible for grades GS-16-18. Without favorable action on these matters by the Congress, career pay will not keep pace with the changes which occur in private industry, and the executive and legislative branches will both be faced with recurrent demands for pay adjustments which are not based upon reliable statistical comparisons. We believed a year ago that the compensation of appointive officers in the executive branch does not need to be, and probably cannot be, fixed in terms of comparability with private enterprise. No data have been presented to us which have caused us to change our minds. We now hold the same view with respect to the Members of Congress and the Federal judiciary. We affirm our belief that it would be difficult, if not impossible, to find positions in the private sectors of out economy which are reasonably comparable with the top offices in our Government. Obviously, no direct comparisons are possible between our legislators and judges and executives in business and industry. So far as the executive branch is concerned, we believe that any proposal for comparable pay between top appointive officers and business executives runs into difficulties which cannot be set aside. In the first place, the opportunity to serve and the prestige which accompanies high office cannot be measured in terms of the dollar value of a salary. Second, executive salary scales in business and industry extend across a wider spectrum both in terms of dollars paid and responsibilities assigned to principal officers than it would be feasible to establish in the Federal Government. To make only 1 comparison, the 1961 median salary for the top executive in 1,157 corporations (subdivided into 7 categories: manufacturing, retail trade, banks, rail and air transportation, gas and electric utilities, mining, and life insurance) ranged from $91,000 per annum in manufacturing firms to $53,000 per annum for life insurance companies. We know of no objective means of comparing presidents of concerns in any of these categories with a Cabinet officer or a major agency head. Certainly the Cabinet officer, and numerous other Federal officers, have duties and responsibilities equal to or greater than any to be found in private enterprise. In summary, we have come to the following conclusions: 1. The Federal Salary Reform Act adopted a manifestly sound principle in establishing comparability with private enterprise as the general standard for career pay scales. 2. The establishment of comparability pay rates for the career service (without concurrent upward adjustment of executive pay) has further aggravated inequitable compression in top pay throughout the Federal Government. 3. The higher ranges of executive pay should be fixed well above the levels of career pay, but need not, and cannot, be fixed meaningfully at rates comparable with the higher ranges of executive compensation in business and industry. 4. Some kinds of positions now included in the Executive Pay Act or paid at rates established under special statutes, should be transferred to the Classification Act salary structure. 5. The lower ranges of executive pay for appointive positions, including the rates now established for certain offices by numerous special statutes, can justifiably be overlapped by the top pay for some nonappointive, professional, or career-type positions, but there should be a thoroughgoing administrative review of all positions in the overlapping zone in order to insure the propriety of the ranking. For example, some career bureau chiefs and their deputies and some specialized professional or staff positions have responsibilities equal to or greater than those of a number of appointive positions paid either under the existing Executive Pay Act or at executive pay rates established in special pieces of substantive legislation. 6. A new executive, legislative, and judicial salary structure, as recommended in a subsequent section of this report, will establish rational relationships (a) between executive and career salaries, without detriment to the principle of comparability, and (b) among ecutive, legislative, and judicial salaries. PRINCIPLES FOR FIXING THE EXECUTIVE SALARY LEVEL In the light of the conclusions just stated, our first task was to decide upon principles for fixing the executive salary level. Looking at the career salary structure on the one hand, and at the executive salary structure on the other, logic and equity of treatment for matvidual uder both systems support the first basic principle witch wo recommend for fixing the executive salary level. This principe has two elements: (1) establishing a sound progression from top career salaries to successively higher executive pay levels, and wating of executive pay levels at such intervals that they will reflect ou à umform and rational basis the differences in importance and re potabilty among the several classes of positions paid at |