Politically Unequal

 A Wealthy Congress Disconnected from Americans' Pain

Nearly half of all members of Congress are millionaires or multimillionaires, while only 1 percent of Americans reach that standing, according to the Center for Responsive Politics. While members of Congress have mostly gained back their financial losses from the recession, Americans are still feeling the effects of the economic collapse. 

There’s been little analysis of congressional wealth before the last decade, but political scientists agree that generally, wealth in Congress has always outstripped that of the average American. 

But in the aftermath of the recession, the wealth divide between Congress and the rest of America appears to have gotten even wider. The median wealth for all Congress members rose by 16 percent, growing from $785,515 in 2008 to $911,510 in 2009, according to a report from the Center for Responsive Politics. 

On average, senators were worth three times more than House members ($2.38 million vs. $765,000), though the wealthiest politician was a member of the House — Darrell Issa, a Republican from California. 

Meanwhile, life for the average American isn’t getting much better. 

The latest numbers from the Federal Reserve show that the average American’s net worth decreased by 23 percent from 2007 to 2009. And the average American brought home $500 less between 2008 and 2009 — the same period in which congressional wealth increased.

The effects of the growing wealth gap between the leaders and the led are enormous and largely ignored. Many disenchanted Americans are left wondering if the system works for them, or worse, are choosing to opt out altogether from a democracy that depends on voter engagement. 

“Just on symbolic grounds, it runs afoul to our notion that Congress should look like the people it represents,” says Duke University political science professor Nick Carnes, who studies political inequality. “We might worry about excessive congressional wealth leaving ordinary Americans to distrust government and be cynical,” he says.

The warning signs are clear in America’s grim economic figures: Fourteen million Americans are still unemployed, according to the Labor Department. Even more Americans, 14.3 percent of the population in 2009, are below the poverty line, according to the Census Bureau.

Even some middle-class Americans are looking for help traditionally reserved for the impoverished. Many are turning to their local food banks for cheaper food. Since 2006, the number of people buying from food banks and pantries has gone up 46 percent. One in six people face hunger in the country, according to Feeding America, which provides food for 5.7 million people each week. 

And, according to a USDA report, more than 50 million Americans are part of households experiencing food insecurity, which is defined as uncertain access to food on a daily basis. That figure is almost four times larger than the 13 million people who were considered “food insecure” at the end of 2007, right before the financial collapse in 2008.

The lifestyles of the members of Congress appear financially inconsistent with these burdens, and so do the debates in Washington. As a result, it’s often unclear who, if anyone, is representing the interests of the poor. And neither party has taken significant steps to close the wealth gap. 

Out-of-Touch Democrats and Republicans

Traditionally, Republicans strive for less government regulation and fewer taxes. They argue that this environment creates a healthier setting for markets, allowing businesses to increase hiring. But there’s no certainty that businesses will spend tax savings by employing more people. 

Conversely, Democrats have historically supported higher taxes for the rich in order to fund government social services. But now those services are on the chopping block in Washington. Democrats offered up cuts to Medicaid and Social Security during negotiations with Republicans on raising the debt ceiling earlier this summer. 

These contradictions may exist in part because our representatives at the highest levels of government don’t share the experiences of the average American. While wealth alone doesn’t predicate how a member will vote on specific issues, background experiences do, says Carnes. 

“The shortage of people from working-class backgrounds in our political institutions tilts the policy-making process in favor of outcomes on economic issues more in line with the upper class’ economic interests,” says Carnes.

According to Carnes’ research, the average member of today’s Congress spent about 1.5 percent of his or her career in blue-collar, or working-class, jobs. That percentage is dwarfed by the 40 to 50 percent of Americans who are considered working class, according to Carnes. 

The top ten richest members of Congress, six Democrats and four Republicans, all voted to extend the Bush tax cuts, according to congressional roll-call data from 2009, effectively maintaining lower tax levels for families making above $250,000. Filings show wealth in Congress is about evenly divided across party lines, according to the Center for Responsive Politics.

“It’s not a very happy way of departisanizing the issue, to say ‘yes, Republicans are bad for the poor, but so are Democrats,’ but the truth of the matter is that this does seem to be to some substantial degree what’s happened over the last few decades,” says Princeton University political science professor Martin Gilens.

Changing this trend will not be easy. Tax and campaign finance reforms might help bring about policies that are more responsive to a broader range of Americans, says Gilens, but it seems unlikely that these reforms will happen anytime soon. Recently, the Supreme Court ruled in favor of unlimited corporate political contributions, and the influential conservative political movement known as the Tea Party favors tax cuts and slashing entitlement programs. 

In 2010, voters sent even more millionaires to Congress. Six out of the ten freshman senators are multimillionaires, as are about 40 percent of the 96 freshman members of the House, according to a report by the Center for Responsive Politics. The average cost of winning a House race in 2008 ran over $1 million, according to the Center, making personal finances and a connection into a network of supporters with large bankrolls critical in a bid for Congress.

However, a seat in Congress didn’t always require such wealth, nor should it have to, says Carnes. “Nothing in the Constitution says we have to be governed by the upper class.”

The best chance at changing this dynamic would come from a more engaged citizenry. After all, it’s the voters who elect their representatives. But with more and more voters experiencing economic hardships, we aren’t seeing greater public outrage. Instead, there’s increased disillusionment. 

We’re left with representatives who largely reflect the type of government desired by the people who vote, even if their policies appear counterproductive to many of their constituents' economic interests.

 


 

The Richest Member of Congress

How Rep. Darrell Issa Serves the Poor

Of the 435 members of Congress, Rep. Darrell Issa of California’s 49th district might be the wealthiest. He has amassed between $295 million and $500 million in personal assets, according to federal disclosure forms released earlier this year. 

Members of Congress only have to report their assets in ranges, making it difficult to tell exactly how much wealth a politician has. For example, if a member held an investment worth $3,000, this would be reported as falling between $1,001 and $15,000 on disclosure forms. A 2009 report by the Center for Responsive Politics calculated each Congress member’s potential minimum, maximum and average net wealth, based on the self-reported ranges. 

The report ranked Issa as the richest member of Congress. The latest filings for 2010 show Issa reported assets valued at a minimum of $295 million, which was nearly double the amount he reported for 2009. 

Meanwhile, many in his district are suffering economically. Pockets of homelessness have grown, the need for food stamps has risen dramatically, and areas he represents have some of the highest foreclosure rates in the country.

“He doesn’t understand the hardships that these people are having,” says Howard Katz, Issa’s Democratic opponent in the 2010 election. “He is not trying to eke out on a day-by-day basis and make sure he can buy food for his kids, or clothe his kids, or have a roof over his head. So I don’t think he understands.” 

Still, Issa is hugely popular in his district; he received 63 percent of the vote. He represents two of the top ten conservative cities in all of California, according to an analysis by the Sacramento Bee, and the policies Issa supports largely reflect what his voters want.

“Darrell Issa knows how to make a community grow because he knows how to grow a business,” says Darrell Connerton, who campaigned for Issa and chairs the local California Congress of Republicans.

Issa received millions of dollars from his now-sold company, Viper Car Alarm Systems. According to financial disclosure forms submitted in June 2011, he has investments in three mutual funds, each worth between $25 million and $50 million. The forms also reveal that Issa made at least $1 million on each of 11 separate investments and that he owns part of a commercial real estate company, Greene Properties, in Vista, California.

Democrats have criticized Issa for being on the side of big business interests and ignoring the needs of the poor. Fittingly, his website features a pop-up that asks, “Government Holding Your Business Back?”

Temecula

In one city Issa represents, Temecula, the lack of resources for the poor has left many citizens wondering where to turn. 

Temecula was one of the fastest-growing cities in California, its population doubling in the 10 years after it incorporated in 1989, according to the California Planning and Development Report website. Now, it has one of the highest foreclosure rates in the nation, according to RealtyTrac, which monitors those rates across the country. Nationally, 1 in 583 homes received foreclosure filings in June. In Temecula, about 1 in 120 homes face foreclosure. 

According to the Riverside Department of Public Social Services, food-stamp cases in Temecula have risen more than 300 percent since 2007, and homelessness has doubled since 2008. 

With cutbacks to public services, churches often provide the only temporary support. 

“Even people who don’t believe in God are going to find a house of God to sleep in, they are so desperate. There’s nobody reaching out to help,” says Arthur Richards, who lost his job as a custom home painter after the housing market collapsed. 

Richards has spent the last five months sleeping in a church sanctuary after his unemployment benefits ran out. There are no shelters in Temecula. 

Issa and the Poor

Issa has argued that less government regulation combined with lower taxes will motivate businesses to increase hiring. He’s voted down government programs intended for the poor, including extending unemployment benefits. He’s never sponsored an earmark to provide government money for the poor, according to Legistorm.com, which collects data on earmarks. 

The Sargent Shriver National Center on Poverty Law gave Issa a “D” grade on fighting poverty.

With other Republican colleagues, Issa has introduced a bill, H.R. 430, which would eliminate the Home Affordable Modification Program (HAMP), the Obama administration’s program to lower mortgage payments to help keep people in their homes. Issa has argued that the government program is wasteful and only delays foreclosures. Still, he hasn’t offered any legislation of his own to address the foreclosure problem.

As the chairman of the Committee on Oversight and Government Reform, Issa has not called on major banks to provide documentation that would shed light on their roles in the foreclosure crisis. Issa's Democratic counterpart on the committee, Rep. Elijah Cummings, has criticized him for not subpoenaing six banks in the committee’s foreclosure investigation, according to a website sponsored by the Democrats on the committee

Instead, Issa has concentrated on investigating dealings in the Obama administration. In April 2010, Issa publicly questioned why the Securities and Exchange Commission (SEC) was probing Goldman Sachs' role in the financial collapse, according to a letter he sent to SEC chairwoman Mary Schapiro. Issa questioned the timing of the SEC lawsuit and alleged that the Obama administration conspired with the SEC to bring it against Goldman Sachs as a way to boost support for financial reforms the administration was trying to pass.

Issa's critics question his motives. He bought 12 different Goldman Sachs High Yield Fund Class A Bonds in 2010; combined they are worth between $180,000 and $600,000, according to federal disclosure forms.

Issa’s staff did not return more than a dozen telephone calls and emails over the past two months seeking an interview with Issa for this story. 

Some believe Issa has mixed personal finances and political objectives in the past. In 2003, he spent nearly $2 million of his own money to jumpstart the recall campaign against Democratic California Governor Gray Davis. 

In the 2010 election, Issa raised $1.5 million in his bid for Congress, while his opponent, Howard Katz, raised $15,000. “It was a David and Goliath race, although in the Bible, David beats Goliath,” says Katz. 

For his supporters, Issa’s investments and income sources are proof that he’s the right person to send to Congress. “The whole idea originally is that if you got people to power who were financially stable they would be able to ... transfer that philosophy in making the country financially stable,” explains Darrell Connerton.

With the country facing a ballooning deficit and a stubbornly high unemployment rate, that original idea doesn’t seem to be working yet. Many people who need help now are wondering if their voice even matters. 

“I haven’t voted in quite a while,” says Temecula resident Maria Meehan, who claims she stopped casting her ballot because her vote never seemed to make a difference. 

She’s facing foreclosure and possible homelessness and feels disconnected from the Washington elite. “I don’t believe in the political system, that they are doing their job.”

****

 

Want to find out how rich your representative is? Check out the House clerk’s website for the original forms, here.

The Top Political Players in Hollywood Political Power of the Alcohol Lobby Playing Politics with Healthcare Who Runs Los Angeles? The Nuclear Landscape The Elephant in the Room Political Power of the Pro-Israel Lobby Schooled, Education Reform Rich Congress, Poor Constituents About the Project