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Home Page Contents Congressional Record
12 May 2010
IN THE HOUSE OF REPRESENTATIVES
Wednesday, May 12, 2010
2010 Ron Paul 23:1
Mr. PAUL. Madam Speaker, I would like to enter into the record an article from the New York Sun dealing with a court case that could have a dramatic impact on current federal legal tender laws. A number of federal judges are appealing the elimination of their cost of living increase, claiming that this is an unconstitutional diminution of pay. In fact, Madam Speaker, even if they had received a cost of living increase they may still have received a pay cut, because the government’s CPI figure is purposely manipulated to underestimate the true inflation rate.
2010 Ron Paul 23:2
Perhaps the most interesting facet of this case is the potential implication for federal legal tender laws. Some experts speculate that if the current case is unsuccessful the judges’ only recourse would be to challenge legal tender laws that artificially prop up the value of paper money. Against gold, the paper dollar has lost 80 percent of its value over the past decade. No amount of cost of living increases could overcome devaluation this severe. I am waiting with anticipation for the ultimate resolution of this case, and encourage my colleagues to read this thought-provoking article.
2010 Ron Paul 23:3
[From the New York Sun, May 11, 2010] KAGAN’S FIRST CASE COULD INVOLVE A QUESTION OF HER OWN—AND HER COLLEAGUES’— PAY
2010 Ron Paul 23:4
(By Staff Reporter of the Sun)
2010 Ron Paul 23:5
NEW YORK—If Solicitor General Kagan is confirmed before the start of the Supreme Court’s coming term, one of her first big cases on the high bench could touch on one of the most sensitive questions the court has ever handled—the pay of federal judges themselves.
2010 Ron Paul 23:6
The case was launched quietly some years ago by a rainbow coalition of some of the most distinguished judges on the federal bench. They are seeking to overturn an act of Congress rescinding an automatic pay increase designed to protect federal judges from the ravages of inflation, and are likely this month to ask the Supreme Court to take the case.
2010 Ron Paul 23:7
What makes the case so sensitive—potentially explosive, even—is that it could prove to be a stepping stone, whether intended or not, toward re-opening the question of legal tender. For the question of judges’ pay confronts the courts with the question of whether a one-dollar note of legal tender that trades today at less than 1,000th of an ounce of gold is compensation equal to a one-dollar note of currency that was worth, say, a decade ago four times as much. What makes federal judges so special is that it is unconstitutional to diminish the pay of any federal judge while he is in office.
2010 Ron Paul 23:8
Were the judges eventually forced to confront that question, says one legal scholar of the monetary system, Edwin Vieira Jr., “it would have profound economic and political effects, and it would cause a re-evaluation of the entire monetary system. Congress would be forced to undergo a complete re-evaluation of the monetary system.”
2010 Ron Paul 23:9
The federal judges asking the Supreme Court to review the rescission of their cost-of-living adjustments aren’t raising the legal tender question, at least not yet. They are not asking to be paid in constant—or inflation- adjusted—dollars, and they appear to believe that the Supreme Court doesn’t have to address that issue to satisfy their claim that Congress violated the anti-diminishment clause of the Constitution when it removed a previously promised cost-of-living raise. But they also have to be well aware of the enormity of the issue that lies just beyond the claim they are making.
2010 Ron Paul 23:10
The plaintiffs themselves comprise an array of senior judges and some of the most distinguished figures on the federal bench. They include two appointees of President Carter—a district judge of the Eastern District of Louisiana, Peter Beer, and a judge on the district court in central California, Terry Hatter, Jr.; two appointees of President Reagan—Thomas F. Hogan, of the District Court for the District of Columbia, and Laurence H. Silberman, who rides the District of Columbia Circuit of the Court of Appeals for the District of Columbia Circuit.
2010 Ron Paul 23:11
Also among the plaintiffs are three appointees of President Clinton—Richard Paez, who rides the Ninth Circuit for the United States Court of Appeals, and Jas. Robertson, of the District Court for the District of Columbia, and A. Wallace Tashima, who was elevated to ride the 9th Circuit by Mr. Clinton after having first served as a district judge on the nomination of Mr. Carter.
2010 Ron Paul 23:12
The pay of judges is one of the most sensitive issues in American history. The Declaration of Independence enumerates judges pay as one of the “injuries and usurpations” committed by George III against the Americans. The Declaration stated that the British tyrant “has made judges dependent on his will alone, for the tenure of their offices, and the amount and payment of their salaries.”
2010 Ron Paul 23:13
It was that claim that led the Founders to establish, in Article III of the Constitution, that “[j]udges, both of the supreme and inferior Courts, shall hold their Offices during good Behaviour” —meaning for life—and that they “shall, at stated Times, receive for their Services, a Compensation, which shall not be diminished during their Continuance in Office.”
2010 Ron Paul 23:14
The complaint in the latest case, which is known as Beer v. U.S., would not be the first time federal judges have gone to court with claims in respect of their pay. As recently as 2008 at New York State, judges launched a legal case to gain a raise. New York’s constitution, like the federal constitution, also prohibits the lowering of a judge’s pay. But the argument the New York judges have made, and they have made it in their own courts, is that the way the legislature in Albany has handled the issue violates the principle of separation of powers.
2010 Ron Paul 23:15
Beer v. U.S. involves federal judges, who are seeking a hearing by the Supreme Court with a different argument—that when Congress scinded a legislated cost-of-living adjustment, as it did for a number of recent years, the judges’ pay was diminished. The judges lost in their early rounds on a complicated set of issues, partly of precedent established in an earlier case when judges fought for a cost of living increase.
2010 Ron Paul 23:16
In some recent legal fracases involving judges pay, there have been statements from several Supreme Court justices, including one by Justice Scalia, that seem to have emboldened the judges filing a claim in the latest case. They are expected to file in the next few days a petition for the Supreme Court to hear their claim that earlier precedents were wrongly decided and that rescinding a legislated cost-of-living adjustment is a diminishment. The Supreme Court has ruled that in cases where a judge has an interest in the outcome of a case but is by necessity the party who must hear it, it is the judge’s duty to rule, despite the conflict of interest. It may be that were Ms. Kagan to be elevated to the Supreme Court she would decide to recuse herself from Beer v. U.S. because of her either direct or tangential involvement in the case as solicitor general.
2010 Ron Paul 23:17
One difference between the current case and earlier ones is that the country is now in a historic monetary crisis, in which the value of United States fiat money has collapsed to such a degree that the Supreme Court would have to go through contortions to avoid considering it. In the past decade, the value of a dollar has plummeted to less than a 1,200th of an ounce of gold from, say, the 265th of an ounce of gold that it was worth at the start of the president of George W. Bush.
2010 Ron Paul 23:18
This means that the legal tender with which a judge is paid today is worth less than a quarter of what it was worth a decade ago.
2010 Ron Paul 23:19
The Supreme Court ruled after the Civil War that the federal government’s paper money had to be accepted as legal tender. The centerpiece of the court’s rulings was called Knox v. Lee and involved payment for a flock of sheep. But there is a legion of scholars and activists who believe—as did the Chief Justice of the United States at the time of Knox, Salmon Chase—that Knox v. Lee was wrongly decided. Such scholars argue that the majority in Knox v. Lee would never have sustained the monetary system we have today.
2010 Ron Paul 23:20
These critics point out that the Founders of America, who used the word “dollars” twice in the Constitution, all knew what the word meant—namely, 416 grains of standard silver or 371¼ grains of pure silver, the same as was in a then-ubiquitous coin known as a Spanish milled dollar, which was also known as a piece of eight. That standard was codified in one of the most famous laws passed in the early years of the republic, the Coinage Act of 1792. Critics of the legal tender law believe that 416 grains of standard silver—or the free market equivalent in gold—is the only form of constitutional money.
2010 Ron Paul 23:21
“If the judges bringing the case of Beer v. United States fail to convince the Supreme Court to restore their cost of living adjustment, federal judges will then have no option left but to reformulate their case so as to challenge the legal tender concept as presently applied,” says Mr. Vieira.