HON. RON PAUL
OF TEXAS
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 governmentís 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
judgesí 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]
KAGANíS FIRST CASE COULD INVOLVE A QUESTION
OF HER OWN—AND HER COLLEAGUESí—
PAY
2010 Ron Paul 23:5
NEW YORK—If Solicitor General Kagan is
confirmed before the start of the Supreme
Courtís 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 judgesí 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 arenít 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 doesnít 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 Yorkís constitution,
like the federal constitution, also
prohibits the lowering of a judgeís 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 judgesí 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
judgeís 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 governmentís paper
money had to be accepted as legal tender.
The centerpiece of the courtís 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.
