It’s quite true that members of congress who aren’t independently wealthy are placed under some real financial strain by the modern-day need to maintain two residences. My understanding is that it used to be the case that most members would simply move to DC. Congress works in DC, and people normally live in the metro area where their job is located. But moving oneself and one’s family to the dread Beltway has become a political liability, so people don’t do it. Thus, Atrios’s plan for “the construction of some sort of Congressional dormitory type thing” has some real merit to it. At the same time, it sounds hilarious — I’m imagining fun pranks and keggers.
The larger issue here, however, is that members of congress and high-level executive branch officials need to be paid more. These people make decent salaries — they’re not poor. But at the same time, folks like a backbench member of the House of Representatives or the Assistant Secretary of State for Latin America are supposed to be important actors in American society. It’s not a good idea for them to be making orders of magnitude less money than important people in the private sector. Somewhat less, sure. But over time the relative salary of a cabinet secretary versus a corporate executive has eroded enormously for no good reason — it’s not as if the budget savings involved are large enough to make an appreciable difference.
Meanwhile, this becomes a problem when you get deeper down into the regulatory agencies. If the EPA is supposed to be able to assess the level of pollution somewhere and take a bad actor to court if he violates the law, then the EPA needs to have good scientists and good lawyers working for it. That means those people need to be paid salaries that are competitive with what people in those fields can make in the private sector. If you don’t do that, then you either get people who are incompetent or, worse, the “revolving door” phenomenon in which the real value of government work is to cash in later by defecting to the private sector in a way that corrupts the regulatory process.