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IN THE LATE 1980s, U.S. Congressional ethics were under extensive public scrutiny, and the result was an environment that was ripe for reform. With the Ethics Reform Act of 1989, which became law in November 1989, Congress established restrictions on the ways that federal employees could earn money beyond their government salaries. The restrictions were applied to honoraria, gifts, and campaign contributions. Inevitably, Congressional attempts to ensure ethical behavior on the part of federal employees stirred up controversy in the media and the public.

In the midst of an economic recession, the House of Representatives added a provision to the Ethics Reform Act that increased annual salaries for all members by approximately 51 percent. Supporters of the bill argued that increasing salaries would offset the ...

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