Along with the Good Behavior Clause, the Judicial Compensation Clause is a guarantee of judicial independence within the Constitution’s separation of powers system. Montesquieu, held in the highest esteem by the Framers, had declared, “[T]here is no liberty, if the judiciary power be not separated from the legislative and executive.” L’Esprit des Lois (1748). In his influential Thoughts on Government (April 1776), John Adams called for an independent judiciary.

[The judges’] minds should not be distracted with jarring interests; they should not be dependent upon any man, or body of men. To these ends, they should hold estates for life in their offices; . . . and their salaries ascertained and established by law.

Three months later, the Declaration of Independence would have as one of its bill of complaints against the king: “He has made Judges dependent on his Will alone, for the tenure of their offices, and the amount and payment of their salaries.”

Justice Joseph Story in his Commentaries on the Constitution of the United States (1833) expressed the same principle: “Without this provision [the Judicial Compensation Clause] the other, as to the tenure of office [the Good Behavior Clause], would have been utterly nugatory, and indeed a mere mockery.” Alexander Hamilton had already made the point in The Federalist No. 79: “Next to permanency in office, nothing can contribute more to the independence of the judges than a fixed provision for their support.” A century and a half after, the Supreme Court would affirm that the purpose of the judicial compensation clause was to preserve judicial “independence of action and judgment” essential to maintaining the Constitution. Evans v. Gore (1920).

The issue at the Constitutional Convention was whether judges’ salaries, like the president’s, should be fixed during their tenures, or whether Congress could allow for increases. The Convention considered James Madison’s resolution that judges receive “fixed compensation for their services, in which no increase or diminution shall be made.” When Gouverneur Morris moved to strike “no increase,” Madison objected that judges would fall under the blandishments of the legislature, which could offer them raises. But Morris retorted that the fluctuations in the value of money, the increase in judicial business, and the evolving style of living might create a necessity for raising judges’ salaries. On the motion to strike the phrase, Morris, supported by Benjamin Franklin, won. Congress may not reduce judges’ salaries, but it may increase them.

Though Congress may not directly diminish a judge’s salary, what of indirect or collateral reductions? What of taxes, or the effect of inflation? There is no question that the Framers were concerned about collateral reductions. Although there was no income tax or cost of living adjustments at the time, the concept of inflation adjustment was not unfamiliar in the 1780s. For example, Hamilton noted in The Federalist No. 79, “It will readily be understood that the fluctuations in the value of money and in the state of society rendered a fixed rate of compensation in the Constitution inadmissible.”

The question of the validity of taxes did not arise until the adoption of the Sixteenth Amendment, providing for a federal income tax, and the subsequent social safety net programs. In Evans v. Gore and Miles v. Graham (1925), the Court held that Congress had no power to tax a federal judge’s salary, stating in Miles that “his compensation is protected from diminution in any form.”

However, in O’Malley v. Woodrough (1939), dealing with the income tax, and United States v. Hatter (2001), addressing the Medicare tax, the Court overruled Miles and Evans respectively. The Court held that the judiciary’s independence was not impaired by congressionally enacted taxation. In Hatter, the Court held that the Judicial Compensation Clause was not a barrier to a “generally applicable, nondiscriminatory tax” to the salaries of federal judges, stating that there “is no good reason why a judge should not share the tax burdens borne by all citizens.” Thus, whether or not a judge was appointed before enactment of the tax did not matter. The Social Security taxes, however, were a different matter, for the law at issue was discriminatory: it had allowed most federal employees to opt out of paying for Social Security, but not federal judges.

In United States v. Will (1980) and Williams v. United States (2002), judges challenged the repeal or the denial of annual cost-of-living adjustments (COLAs) for judicial salaries. In Will, the Court found that some repeals of the COLA were invalid depending upon when they took effect. A similar issue arose in Williams, which dealt with the Ethics Reform Act. That Act had allowed for salary supplements to take account of inflation. However, Congress blocked salary adjustments in 1995, 1996, 1997, and 1999 for federal judges. Though a district court found that Congress could not rescind the adjustments, the United States Court of Appeals for the Second Circuit reversed. The case was appealed, but in Williams, the Supreme Court denied a writ of certiorari, though Justices Stephen Breyer, Antonin Scalia, and Anthony Kennedy found merit in the challenge.

The issue of the adequacy of judicial compensation remains. Chief Justice John Roberts has argued that Congress’s failure to increase judicial compensation “has now reached the level of a constitutional crisis that threatens to undermine the strength and independence of the federal judiciary.” Under his view, “judges are no longer drawn primarily from among the best lawyers in the practicing bar.” However, studies have not established a quantifiable relationship between judicial performance and compensation.

Retirement of judges has also been also part of the question of compensation. At the time of the Constitutional Convention, the state of New York had required its judges to retire at age sixty, which Alexander Hamilton termed “inhumane,” as it left the retired judge with no income. In The Federalist No. 79, Hamilton argued against mandatory retirement: “[F]ew there are who outlive the season of intellectual vigor.” After the Civil War, the question of whether retired judges could receive a salary began to be debated. The Judiciary Act of 1869 provided for judicial retirement and a pension equal to their salary. In 1919, Congress allowed federal judges (excepting those on the Supreme Court) to retire from active service at their salary, but continue to serve where needed, an arrangement that came to be termed “senior status.” When Congress attempted in 1933 to reduce the salary of retired judges, the Supreme Court voided the legislation, holding that when a judge retired from active service, he still retained his “office” and the constitutional guarantee of no diminution of salary. Booth v. United States (1934). Congress extended the option of senior status to Supreme Court justices in 1937.