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Most in Congress are millionaires, but not because they’re getting rich off the system

By   /   January 14, 2014  /   News  /   No Comments

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RICH MAN, POOR MAN: The richest member of Congress is U.S. Rep. Darrell Issa, R-Calif., who has a net worth of $464 million, according to his financial disclosure statement. Issa made his fortune in the car alarm business and has consistently ranked as one of Congress’s wealthiest members.

 

By Eric Boehm | Watchdog.org

MINNEAPOLIS — For the first time in history, more than half of America’s elected representatives in Congress are worth more than $1 million.

According to the Center for Responsive Politics, which tracks political spending in Congress, at least 268 of the current 534 members of Congress had a net worth of at least $1 million in 2012. The median net worth of a member of Congress reached $1,008,767 in 2012, up from $960,000 in 2011, according to disclosures filed annually by all members of Congress, which the center analyzed.

Though it’s little surprise that members of Congress are better off than the average voter they represent, surpassing $1 million has symbolic meaning at a time when elected officials are debating issues like economic inequality, unemployment benefits and entitlement reform, the center said in its analysis of the figures.

MAKE THE MONEY, DON'T LET THE MONEY MAKE YOU: More than half of the current members of Congress have more than $1 million in personal wealth. But are the getting rich of the system, or does the system simply favor the rich?

MAKE THE MONEY, DON’T LET THE MONEY MAKE YOU: More than half of the current members of Congress have more than $1 million in personal wealth. But are the getting rich of the system, or does the system simply favor the rich?

“Despite the fact that polls show how dissatisfied Americans are with Congress overall, there’s been no change in our appetite to elect affluent politicians to represent our concerns in Washington, said Sheila Krumholz, executive director of the center.

Congressional Democrats had a median net worth of $1.04 million, while congressional Republicans had a median net worth of almost exactly $1 million. In both cases, the figures are up from last year, when the numbers were $990,000 and $907,000, respectively.

Assets held by a spouse must be reported on members’ financial interest statements and were included by the center in its calculations.

The richest member of Congress is U.S. Rep. Darrell Issa, R-Calif., who has a net worth of $464 million, according to his financial disclosure statement. Issa made his fortune in the car alarm business and has consistently ranked as one of Congress’s wealthiest members.

U.S. Rep. David Valadao, R-Calif., sits at the bottom of the pile. He’s more than $12 million in debt, thanks to loans for his family’s daily farm.

For the sake of comparison, the median per capita wealth in the United States is about $45,000, according to an October 2013 report from Credit Suisse that analyzed global wealth.

According to the same report, there are about 13 million Americans with wealth of more than $1 million.

While there are plenty of members of Congress in that category, they are actually not getting wealthy off the system, no matter what the numbers might suggest.

In most cases, they are bringing their wealth with them.

“You can’t run for Congress unless you have some money stocked away,” said Stephen Fuller, a professor in the School of Public Policy at George Mason University. “The kind of people who run for Congress have quite a bit of savings already, because they have been lawyers or doctors or something like that.”

KING OF THE HILL: U.S. Rep. Darrell Issa is the wealthiest member of Congress, with a net worth of more than ?? million. But he made his millions in the private sector, then got elected to office.

KING OF THE HILL: U.S. Rep. Darrell Issa is the wealthiest member of Congress, with a net worth of more than $460 million. But he made his millions in the private sector, then got elected to office.

The growth in members of Congress’ personal wealth gives an indication of where that wealth is coming from, Fuller said.

Since pay for elected officials hasn’t increased in several years, the best explanation for their growing net worth is that they have investments like stocks, retirement accounts and real estate.

Rank-and-file members of Congress make a $174,000 salary, which has not increased since 2009. Leaders in the House and Senate make $193,000 and the Speaker of the House is paid $223,000.

That’s pretty good money, but Fuller argued it’s actually less than what many members would be making in a position of similar prestige and responsibility in the private sector.

And members of Congress do like to play the stock market.

General Electric is the most popular investment for current members of Congress. Current records show 74 lawmakers own shares of the company’s stock, according to the center.

Wells Fargo ranked second with 58 members of Congress as investors, followed by software companies Microsoft and Apple, appliance maker Proctor & Gamble and other financial institutions including Bank of America and JP Morgan Chase.

There’s also some selection bias to blame for why members of Congress have personal wealth that exceeds that of the average American.

The average America isn’t in a position to win a seat in Congress, which these days requires a healthy checkbook or lots of wealthy friends.

“It’s undeniable that in our electoral system, candidates need access to wealth to run financially viable campaigns, and the most successful fundraisers are politicians who swim in those circles to begin with,” said Krumholz.

If voters think their elected officials are too wealthy to connect with the problems of ordinary Americans, as polls frequently suggest, the system itself might be to blame.

Boehm is a reporter for Watchdog.org and can be reached at [email protected]. Follow @WatchdogOrg and @EricBoehm87 on Twitter for more.

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