(Below is in response to a forwarded email I received, titled "This is How You Fix Congress." Full text in many places, including here.)
Congress definitely needs some fixing, that's for sure. In the midst of the pre-holiday health care bill wranglings in December, I read interesting opinion pieces by E. J. Dionne and Paul Krugman (that I reference here). Regardless of one's opinion about the substance of the health care bill, a key point that Dionne and Krugman both made was to show how anti-democratic are the rules of the Senate that enable a single Senator to hold up the entire legislative process in order to receive pork/kickbacks/bribes (etc.). One way to fix Congress would be to make impossible this kind of shenanigan.
Another key Congress-fixing strategy would be somehow to disassociate financial contributions as protected First Amendment speech. It's just a basic fact that a general voter who contributes $100 to a given campaign just does not have the same clout as the corporation that contributes $1,000,000, and the result is that the "speech" of the corporation will generally drown-out the speech of the citizen. One example of this direct relationship between financial contributions and votes in the House and Senate can be seen here.
I am of two minds when it comes to term limits. In an ideal world, term limits would be set by the majority of voters -- when voters wanted an officeholder out of office, they could just vote her/him out. However, we're far from a world where this simplistic logic actually applies. The incumbency rate is upwards of 95% these days (see abstract), and I find it hard to believe this is just a simple reflection of voters' satisfaction with politicians. So, in this light, it would be great to force politicians out of office once they've completed X-number of years. However, what if they're actually really good at what they do and deserve to stay in office?
Another thing I'd like to find a way to limit is the "revolving door" practice of politicians and government officials who, for example, come to government after a tenure with a powerful corporation, then serve out a term or an administration, and go back in to private industry at high levels, and then, in a few years' time, get picked for another government post. One of many examples.
Regarding the specific proposal highlighted in that forwarded email, I don't see this gaining any traction, but I do think that not allowing Congress to approve their own pay raises has merit; their pay might instead be tied to annual cost-of-living increases instead, perhaps? Instead of not providing health care or pensions to Congresspeople, I would be interested in hearing options that enabled average American citizens to opt-in to the same kinds of health care and pension plans that Congresspeople now get.