Nation: The New Administration: The High Cost of Serving the Country

• Share

HIGH federal office often brings fame to a man and, once he returns to private life, fortune as well. The successful businessman or professional entering Government service, however, may draw an official salary that is far less than the sum he is accustomed to paying in taxes. That is particularly true for many of Richard Nixon's Cabinet appointees, an uncommonly successful lot.

All twelve department heads get the same pay: $35,000 a year* plus such perquisites as the use of a limousine. Yet to become Secretary of State, William Rogers is giving up an income in the $300,000 range, derived from his law practice and his limited partnership in the Dreyfus Fund. David Kennedy (Treasury) has been earning more than $230,000 a year, plus stock options, as chairman of the Continental Illinois National Bank and Trust Co. Maurice Stans (Commerce) has been grossing about $250,000 as president of the investment-banking firm of Glore Forgan, William R. Staats, Inc., and as a member of other corporate boards. Nixon Law Partner John Mitchell (Attorney General) has been earning more than $200,000. Winton Blount (Postmaster General) is the nonsalaried president of the U.S. Chamber of Commerce, but his Alabama-based construction company has had contracts this year involving more than $100 million. He says his personal income has been "several times" $35,000.

A Raise in Salary. Blount, of course, will unload his interest in the family company. So will another millionaire builder, Governor John Volpe of Massachusetts, who will head the Transportation Department. Volpe retained his chairmanship of the John A. Volpe Construction Co. while serving as Governor. He will sell his interest, which he estimates at about $1,000,000, and expects to lose a quarter of that in taxes.

The third contractor in the Cabinet, Walter Hickel (Interior), put his private holdings, worth an estimated $14 million, into trusteeship after being elected Governor of Alaska in 1966. Even if Cabinet salaries are not increased, Hickel stands to get a raise; the Governor of Alaska receives $27,500. But he must give up his free mansion in Juneau. Michigan pays its Governor $40,000, so George Romney (Housing and Urban Development) will be taking a $5,000 cut. Romney's personal holdings are estimated at $1,500,000, and have been in trust since he left American Motors to enter politics in 1962.

Even the two educators in the crowd face cuts in remuneration. George Shultz says that he will be making a "very substantial sacrifice" when he resigns as Dean of the University of Chicago Graduate School of Business to become Secretary of Labor. He will also have to give up income from directorships of Borg-Warner, the General American Transportation Co., and the Stein, Roe and Farnham funds. To become Secretary of Agriculture, Clifford Hardin will receive the same base pay of $35,000 that he has been drawing as Chancellor of the University of Nebraska, but he loses his free residence.