A congressman's "peers" are his constituents, not wealthy benefactors
Timothy B. Lee makes the case that congressmen should be paid more so they can feel equal to others of their elite social status:
Obviously, it's hard for a taxpayer making $60,000 to relate to someone who views a $172,000 salary as inadequate. But members of Congress are part of America's elite. Their peers are bankers, entertainers, corporate executives, doctors, and lawyers. The most successful people in all of these professions make a lot more than $172,000. They're living in nicer houses, sending their kids to better schools, and taking fancier vacations than members of Congress are.
But they're not supposed to be "elites." They're supposed to be representatives of the people who voted for them, which means they should not think of their "peers" as bankers, entertainers, executives etc. (at least not most of them.) Perhaps if they spent more time among the former instead of the latter they wouldn't feel so cheated and would have a better idea of who it is they should be identifying with. In fact, the problem may be that they actually make too much money which explains why they no longer understand the needs and wants of 95% of America.
Of course, that income differential doesn't justify members of Congress putting personal financial considerations ahead of the interests of their constituents. But it's not hard to see how some members could persuade themselves that their long years of public service, at a salary dramatically below the incomes of their private-sector peers, justifies cashing out at a lobbying firm at the end of their careers.
I can't remember where I read about it, but there is a theory that Europe managed to create a strong welfare state at least partially because its system of elections makes it easier for members of the working and middle classes to run for office whereas the US has always made their representatives into higher status "elites." I don't know if that's the sole cause of our flaccid safety net, but I'm willing to bet that it's contributed to it.
Moreover, it's laughable that people who think they are underpaid compared to those they see as their peers will be appeased by a few hundred thousand dollars. If there's one thing that's obvious about human nature it's that those who see money as a sign of their comparative worth will never have enough of it. There are always going to be people who are richer than members of congress no matter how much we pay them.
In the world of elites, the congressman's power is his currency. And it's worth more than money. They know that the minute they are ready to give up the prestige and celebrity of being a public official, they can go into the private sector and command many times $172,000 per year if that's what matters to them. And so do their wealthy patrons.
Don't feel too sorry for them. They know exactly what they're worth on the marketplace and they'll be very handsomely compensated when they decide to cash in their chips.