Press Release of U.S. Senator Barbara Boxer

For Immediate Release:
April 23, 2012  
Washington D.C. Office (202) 224-3553

Boxer Calls for Limits on Exorbitant Taxpayer-Funded Salaries for Private Contractors  

As Federal Compensation Benchmark is Raised to $763,000, Senator Calls for Passage of Bipartisan Bill to Rein in Taxpayer-Funded Contractor Pay

Washington, D.C. – U.S. Senator Barbara Boxer (D-CA) renewed her call for new limits on taxpayer-funded salaries for government contractors after the Office of Management and Budget (OMB) today raised the “benchmark compensation amount” for contractors to $763,029 – an increase of nearly $70,000 from the previous salary limit.

Senator Boxer said, “At a time when middle-class families are struggling, there’s no justification for a private contractor to receive a taxpayer-funded salary that’s nearly four times what Cabinet secretaries earn.” 

OMB is required by law to increase the salary cap annually based on a formula tied to private sector compensation. Under the new benchmark, government contractors can charge taxpayers $763,029 for the salaries of their top five employees. Employees of government contractors outside of the top five can and do earn taxpayer-funded amounts in excess of the benchmark.  

Senator Boxer and Senator Chuck Grassley (R-IA) last month introduced the Commonsense Contractor Compensation Act of 2012, S. 2198, which would lower the maximum amount taxpayers reimburse all government contractors for their salaries. The bill would restrict the taxpayer reimbursement for government contractor salaries to the amount of the President’s salary – currently $400,000 – and extend the cap to all government contractor employees. 

The legislation would build on a previous measure by Senators Boxer and Grassley – which was passed as part of the National Defense Authorization Act in December – that extended the federal salary cap to all defense contractor employees, not just the top five.  

The proposed taxpayer salary reimbursement limit is still double the $200,000 salary that Cabinet Secretaries earn. Additionally, the measure would in no way limit employee compensation provided by private companies out of their own revenue streams.