The Real Gap In American Income and Wealth? How About The Gap Between Congress and Normal Americans?
December 26th, 2011
The Real Gap In American Income and Wealth? How About The Gap Between Congress and Normal Americans?
Published on December 26th, 2011 @ 11:48:49 pm , using 1074 words
BUTLER, Pa. — One day after his shift at the steel mill, Gary Myers drove home in his 10-year-old Pontiac and told his wife he was going to run for Congress.
The odds were long. At 34, Myers was the shift foreman at the “hot mill” of the Armco plant here. He had no political experience and little or no money, and he was a Republican in a district that tilted Democratic.
But standing in the dining room, still in his work clothes, he said he felt voters deserved a better choice.
Three years later, he won.
When Myers entered Congress, in 1975, it wasn’t nearly so unusual for a person with few assets besides a home to win and serve in Congress. Though lawmakers on Capitol Hill have long been more prosperous than other Americans, others of that time included a barber, a pipe fitter and a house painter. A handful had even organized into what was called the “Blue Collar Caucus.”
But the financial gap between Americans and their representatives in Congress has widened considerably since then, according to an analysis of financial disclosures by The Washington Post.
Between 1984 and 2009, the median net worth of a member of the House more than doubled, according to the analysis of financial disclosures, from $280,000 to $725,000 in inflation-adjusted 2009 dollars, excluding home equity.
Over the same period, the wealth of an American family has declined slightly, with the comparable median figure sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.
The comparisons exclude home equity because it is not included in congressional reporting, and 1984 was chosen because it is the earliest year for which consistent wealth statistics are available.
The growing disparity between the representatives and the represented means that there is a greater distance between the economic experience of Americans and those of lawmakers.
“My mother and I used to joke we were like the Beverly Hillbillies when we rolled into McLean, and we really were,” said Michele Myers, the congressman’s daughter, now 46. “My dad was driving this awful lime-green Ford Maverick, and I bought my clothes at Kmart.”
Today, this area of Pennsylvania just north of Pittsburgh is represented in Congress by another Republican, Mike Kelly, a wealthy car dealer elected for the first time in 2010. Kelly, as it happens, grew up just a few houses down the street from the Myers family, in a larger brick home.
Kelly’s dad owned the local Chevrolet-Cadillac dealership in Butler, and Kelly, an affable former football recruit to Notre Dame, had worked there since he was a kid. Three years after graduating from college, he married Victoria Phillips, an heir to the Phillips oil fortune. He eventually bought and took control of the family car business, and today, the net worth of Kelly and his wife runs in the millions of dollars, according to financial disclosure forms.
Both men refer to their personal life experiences in explaining their political outlook.
Myers, the son of a bricklayer, had worked his way through college to a bachelor’s degree in mechanical engineering, and he looked at issues of work and security at least partly through the lens of his own experience. For example, he bucked other Republicans to vote to raise the minimum wage and favored expanding a program to aid workers affected by foreign imports. He said he understood the need for what was then called “the safety net.”
“It would be hard to argue that the work in the steel mill didn’t give me a different perspective,” said Myers, now 74 and retired in Florida. “I think everybody’s history has an impact on them.”
Kelly, on the other hand, focuses on the hard work he and his family have done to build the dealership. He thinks that the government should be run more like a business, and that laws must be fair to people who strive and succeed. He opposes the estate tax, the inheritance tax levied on the wealthy, because, among other things, he feels he has been overtaxed already. He says unemployment checks make some less willing to go back to work. And asked about tax breaks for oil companies, he notes that when corporations profit, people with pensions and portfolios do, too.
Moreover, he favors the budget plan advanced by Rep. Paul Ryan (R-Wis.), which seeks to eliminate tax loopholes and lowers the income tax on the highest earners from 35 percent to 25 percent.
In explaining his outlook, Kelly often refers to his father. One of nine kids who started the car business almost from scratch, his father was skeptical of the ideas for social programs and education that his son brought home from college in the late 1960s.
“He’d say, ‘Oh, I love your ideas, I love your ideas,’ ” Kelly recalled. “But he’d say, ‘You know why it’s a great country, don’t you? We worked our a---- off. That’s why it’s a great country.’ ”
High cost of campaigning
The growing financial comfort of Congress relative to most Americans is consistent with the general trends in the United States toward inequality of wealth: Members of Congress have long been wealthier than average Americans, and in recent decades the wealth of the wealthiest Americans has outpaced that of the average.
In 1984, the 90th percentile of U.S. families had holdings worth six times the median family’s; by 2009, the 90th percentile was worth 12 times the median family, according to the University of Michigan study, a longitudinal panel survey. These figures include home equity.
This growing inequality, not surprisingly, is seen in Congress. Not only has the median wealth increased, but the proportion of representatives who have little besides a home has shrunk. In 1984, one in five House members had zero or negative net worth excluding home equity, according to the disclosures; by 2009, that number had dropped to one in 12.
Another possible reason for the growing wealth of Congress is that running a campaign has become much, much more expensive, making it more likely that wealthy people, who can donate substantially to their own campaigns, gain office.
Since 1976, the average amount spent by winning House candidates quadrupled in inflation-adjusted dollars, to $1.4 million, according to the Federal Election Commission.
For example, Myers’s first winning campaign, in 1974, cost $33,000, according to federal election records. That’s about $146,000 in current dollars, or one-tenth the current average. To make do, his wife held coffee klatches and improvised brochures with markers and index cards.
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