More pressure to limit contractor pay

Two members of the Senate last week introduced bipartisan legislation that would limit contractor salaries paid by federal tax dollars to $400,000—the same as the president’s salary.

The bill, dubbed the Commonsense Contractor Compensation Act of 2012 (S. 2198), was introduced March 15 by Sens. Barbara Boxer (D-Calif.) and Chuck Grassley (R-Iowa).

Under the current federal executive compensation benchmark, tax-funded salaries earned by a government contractor’s top five executives are limited to $693,951—a cap the lawmakers say has almost doubled over the past 12 years. Moreover, according to a release from the two senators, “employees of government contractors outside of the top five can and do earn taxpayer-funded amounts in excess of the current benchmark.”

S. 2198 would extend the $400,000 cap would to cover all contractor employees.

“The direct taxpayer-funded salaries of government contractors clearly need to be contained, and this legislation is designed to do so,” Grassley said in a press statement. “There’s no justification for these payments to be higher than the salary of the president of the United States.”

While the bill would limit taxpayer-provided compensation, contractors would not be limited from paying employees additional amounts out of their own revenues, the lawmakers pointed out.