Politics and Wealth
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Thanksgiving week is a time citizens are supposed to remember how fortunate they are to live in freedom in America. Of course, some citizens are more fortunate than others, particularly in regards to wealth and material things (which as everyone knows can’t buy happiness). Particularly fortunate are federal officeholders who are generally wealthier than other Americans and enjoy a number of special perks.
According to the Washington Post, the average member of Congress was worth about $900,000 in 2010, their wealth having declined during the recession. By 2012, however, it had increased to over $1 million. There was little difference between Republicans and Democrats in terms of affluence. The average senator in 2010 had about $2.6 million in assets. There was great variation in what officeholders in both the House and the Senate were worth, with some having hundreds of millions of dollars. At least 150 of these lawmakers made more in outside income than from their Congressional salaries. (Talk about the poor people who need to hold down two or three jobs just to survive.)
Many members of Congress accumulate significant wealth while in office, which is somewhat strange considering that they earn $150,000 annually and the cost of living in Washington and its environs is among the highest in the country. But this is where some of their perks come in. A number of members of Congress trade on insider information they have acquired in closed committee hearings or on data given to them by various government agencies that has not yet been released to the general public. Elected officeholders have also reworked their financial portfolios after discussions with Treasury or Federal Reserve officials, receiving information about the state of the economy that is yet to be released. Lots of money can be generated by insider trading and the legislators usually don’t have to worry about federal prosecutors coming after them. If prosecutors aggressively pursue them, members of Congress can usually evade their investigations and then find ways to make life difficult for these adversaries.
And members of Congress trade in stocks of companies while enacting legislation that will impact these same businesses. New laws are passed as well that will particularly benefit Congressional members or their relatives- business as usual. Conflict of interest and unethical conduct don’t seem to be issues for these elective officials. Certainly, not where money is involved.
Other financial perks available to members of Congress and not to ordinary citizens are their campaign funds and Political Action Committees (PACs). Money can be accumulated in these vehicles and then used for various personal expenses that are listed as campaign-related. Lobbyists also find ways to “help” these lawmakers with their finances that border on illegal and sometimes go over the line.
The revolving door between elected officeholders and lobbying firms is another perk available to members of Congress and Senators that provides them with a financial cushion when they retire or are defeated in their bids for re-election. These firms hire them because they were helpful while in office and because of their contacts in Congress and the Senate. Though there is a ban on direct lobbying for a year after they leave office, these former officials may be listed as consultants but are still able to use their influence to help the lobbying firms in various ways. They are rewarded with lucrative salaries, usually in the range of seven figures. A report in 2011 noted that over a ten year period, over 400 former lawmakers had registered as lobbyists along with 5400 of their staffers.
Thus, we can see that there are different paths federal officeholders can follow to accumulate wealth while both in and out of office. One of the problems with this is that when these elected officials focus on augmenting their own finances, they are less attuned to the needs of their constituents and spend less time working for them. And in general, these wealthy “self-made” men and women are less sensitive to the necessity for various types of government safety nets for the middle class and the underclasses.
Legislation is needed that will prohibit members of Congress, Senators, and their staffers, from becoming lobbyists for at least a five year period after leaving their offices. Any trading on insider information by these lawmakers should be banned completely. Any use of campaign funds or PAC funds for personal financial expenses should be met with harsh penalties. But don’t hold your breath waiting for any of these measures to be enacted. Not surprisingly, many of these legislators are re-elected by their constituents even after their unethical conduct has come to light. After all, this is America, where the public applauds successful entrepreneurs in or out of public office, even if they may be skirting the law.