Tag Archives: wealth

Let’s Be Fair with Congress – Give Them Performance-Based Bonuses

It looks like Congress may actually vote to prohibit itself from using insider information to trade on the open markets. (See here.) This seems about right. And about time. But it sells our Congress short as well. To be fair, we should give them a financial incentive to do well. Not simply the incentive of getting re-elected. That skews things.

Instead we should offer our Members of Congress performance-based bonuses. They don’t get paid much and have to maintain two forms of residence – in their home districts and in DC (though some now sleep in their offices in Washington – we should ask the department of health if this is within code).

Here’s what we would do: first determine what each member of Congress‘ responsibilities are. Here are some suggestions:

  • They all have to deal with constituents’ complaints (social security, medicare, Veterans affairs, etc.). This could be the basis of simply keeping their jobs – re-election would be a function of how well they respond to constituents’ needs. This way we wouldn’t have to vote based on ideology or political determinism, but on service. Isn’t this what we do for our plumbers and lawyers – if they do a good job providing service we call them next time we have a problem. If they don’t, we get a new one. We don’t really care if they are Dems or Republicans, if they think a balanced budget is of higher priority than social welfare, or if they believe the war in Iraq is right or wrong.
  • They all are on various Congressional committees. Make sure each committee has a strategic plan and measure them on its goals and objectives. So if you are on the Agriculture Committee and have an objective to revise corn subsidies (say, objective 2.3), then if the revision occurs within certain boundaries a bonus is payable.
  • How secure are the American people?  If the first purpose of government is to secure the life and liberty of the American people, then use a “Security Index.” How much have we achieved peace within the constraints of how our enemies are assaulting us? I’m sure the Pentagon and CIA can come up with a peace/war index related to this issue. The State Department would also be involved – they claim they can do better at obtaining objectives than the Pentagon, and Congress should be providing oversight of the Executive Branch, so how well they can negotiate security-related issues worldwide would be another bonus area.

Then there are lots of other areas that could be part of each individual Congressman’s bonus plan, or an aggregate bonus point: poverty level improvement, reduced health uninsured, increase in overall wealth of the nation, or average wealth per capita, or reduced disparities in wealth (the “Occupy” folks could work to help set the disparity index as a bonus objective, instead of making camps in city parks), education goals, creativity/innovation indexes to show how our citizens are improving the lives of the world or the nation, etc.

Right now it seems we think about a lot of these things and roll them all into one bonus plan: re-election. But that is too simplistic and broad and doesn’t give Congress the true feedback they need as to their competencies and ways to improve.

A small bonus plan (say 15% of salary, or about $11 million total; $25,000 per senator or congressman) might just give our poorly paid Congressmen an opportunity to improve their performances, bring home some more bacon, compensate them for having to maintain two residences, and give a token of appreciation from the American public – assuming they earn it by meeting their bonus objectives.

So here’s a sample bonus plan with the performance objective, portion of bonus (out of 15%), and performance measures based on threshold (below which no bonus is paid) and various levels to obtain maximum bonus for the objective:

  • Security Index    4%    Objective:  citizens are safe at a 95 level    Threshold:  80  Maximum bonus:  95 or above;  Interpolate bonus in between  (Note:  I’m making this one up for now – I don’t know if there is a security index extant.)
  • Agriculture committee objective 2.3     3%    Threshold 1%:  pass bill out of committee   Maximum bonus 3%:  Bill passes through both houses and is signed by president; Bill passes through one full legislative body 2%
  • Federal budget  balanced 5%    Threshold:  2% below balanced budget.  Maximum bonus: 1% surplus.  Interpolate in between.
  • Poverty level (current level 15.1%) reduced below 14%   3%    Threshold: 14.5%.  Maximum bonus:  14%.  Interpolate in between.

All new approaches take some iteration until we get it (partially) right.  I’m not suggesting this is the only way to do it, just one possible way with many details to work out.  For example, because our ability to collect data to confirm some of these objective data points may take several months after the end of the year, bonuses would be paid when all data are finally collected.  Perhaps this would be an incentive for Congress to allocate more funds for enhanced data collection?  Because congressional sessions run for two years, bonuses would be paid every two years based upon the final results of the congressional session.  Hence every two years a Congressman or Senator would have the potential for a $50,000 (plus or minus) bonus.  Maybe knowing that they have to complete their tasks to get their bonuses will incent them to spend more time legislating in the second year, and less time electioneering?

Who determines the ultimate bonus objectives and whether they are met? An independent panel of non-lawyers appointed by the Supreme Court, of course.

I’ve already submitted my application to be appointed chairman.

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