Pay for performance is likely to lead to better public school teachers, and former FDIC chair Sheila Bair writes in the latest Fortune magazine that the same principle might work for Congress.
Let’s start paying members of Congress and the President half of their compensation in 10-year Treasury debt, which they must hold until maturity. Members of Congress make roughly $180,000, so under this proposal, they would get $90,000 in cash and $90,000 in 10-year Treasuries. (We would add a housing allowance, too, given the high cost of living in Washington.) For the President, it would be $200,000 cash and $200,000 in T-bonds. If the economy does well and if they get out fiscal house in order and institute pro-growth tax and spending policies, those 10-year bonds should hold their value. But if we continue our profligate ways, inflation spikes, and interest rates skyrocket, those bonds may end up being worth as much as the stuff Czar Nicholas issued shortly before the Bolshevik revolution (some of which I bought at a flea market and now use as wallpaper in the bathroom).
Of course, Peter Schweizer might argue — as he did in the book Throw Them All Out — that members of Congress already get paid for performance. It’s unfortunate for taxpayers that the performance enriching congressmen has little to do with their public duties.
