Congressional Incentive Plan - Critique requested
Posting under new account because I may dox this one in the future. I greatly appreciate the way the SSC community thinks through these things so I’m trying to get honest feedback. While this does touch the US government I really want to avoid a political discussion and focus on the incentive mechanism itself.
I've been working on a non partisan policy proposal I’ve been calling the Congressional Incentive Plan (CIP) and I think the basic framing is defensible but I'm sure there are failure modes I'm missing and would like critique before pushing it further.
The problem I'm trying to solve:
Members of Congress earn about only $174K/year while holding jobs with enormous influence over the US economy. The compensation gap and mechanisms that actually reward representatives aren’t aligned with the citizens. History proves moralizing doesn't fix this; I fundamentally believe we have to change the incentive structure.
The mechanics:
- In any fiscal year the federal government runs a budget surplus, 1% of that surplus (with the effective surplus rate capped at 10%) funds a Congressional Incentive Pool. No surplus, no pool. Cannot be funded by borrowing.
- Pool splits 30/70 between Senate and House.
- Members accrue one Congressional Compensation Credit (CCC) per full year of service.
- Each CCC stays active for 10 fiscal years after accrual, then expires.
- Payout in any year = (member's active CCCs / total active CCCs in chamber) × chamber pool.
- Because CCCs activate the fiscal year after a term ends and persist for 10 years, a member's peak earning comes after leaving office. That's deliberate: it rewards decisions whose fiscal effects show up on a decade horizon, not the current term.
- Lifetime cap of 2 terms of CCC accrual per chamber (12 years Senate, 4 years House).
- Members, spouses, and dependents banned from individual securities, private funds, and derivatives. Permitted: broad publicly available long-only funds, Treasuries, deposit accounts, personal real estate etc.
- Surplus calculated by CBO, certified by Treasury.
- Taxed at whichever yields the higher liability between ordinary income and short-term capital gains. No preferential treatment.
- Voluntary forfeiture allowed, either by letter or by voting against the enabling legislation.
At reasonable surplus sizes, senators would receive $2.5M to $50M/year and representatives $600K to $11.5M/year. That's the point. Make the legitimate path the most attractive.
I wrote up more at https://www.fixtheincentives.org/ Mod’s please let me know if there are any edits I need to make here. Thanks!