Actual Grit

The window to the world

A giant sucking sound as Washington consumes U.S. wealth

Sen. Ben Nelson, D-Neb., announced his retirement from the U.S. Senate yesterday, but don’t expect him to move back to Nebraska anytime soon. Nelson first ran for the Senate as Nebraska’s sitting governor in 1996, but he lost that race to Republican Sen. Chuck Hagel. Nelson went on to finish his second term as governor in January 1999. Then, instead of returning to his old job in the insurance industry, he moved to Washington, D.C., for a job to lobby Congress and the executive branch on state and local government issues. A year later, in 2000, he won Nebraska’s other Senate seat, and he hasn’t left Washington since.

Nelson’s passion for the Potomac has made him a very wealthy man. With an estimated personal worth of approximately $7 million, Roll Call ranked him as the 38th richest member of Congress. Unless your last name is “Buffett,” you don’t make the kind of money in Omaha. And it turns out that Nelson is far from the only member of Congress who has prospered while occupying a seat in Congress. According to an analysis by the Washington Post of congressional financial disclosure data for the period of 1984 to 2009, the median net worth of a member of the House of Representatives, excluding home equity, more than doubled. Over the same period, according to the Post, the wealth of an average American family declined slightly.

The Post paints the growing wealth gap between Congress and average Americans as reflecting rising income inequality more generally. But that’s a tough sell in view of other data released yesterday. The New York Times reported that while the median net worth of the richest 10 percent of Americans remained essentially flat from 2004 through 2010, the median net worth of members of Congress rose by 15 percent over that same period. Granted, the Post and the Times looked at different periods, but the comparison is, as they say in the nation’s capital, “close enough for government work.”

Why are members of Congress getting rich? Hoover Institution Fellow Peter Schweizer addressed this question in his recent book, “Throw Them All Out: How Politicians and Their Friends Get Rich Off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison”. It’s not rising congressional pay because congressional pay has actually fallen in inflation-adjusted dollars over the last 25 years.

Members of Congress are getting richer because so many of them are masterful manipulators of their perks and positions in government. For many, that means making lucrative stock deals based on insider information or participation in special Initial Public Offerings. Or it can mean securing an earmark to build a road that doubles the value of a recently purchased piece of property. In short, wealth can come from having the inside connections, specialized information and privileged access that only comes with being a senator or representative. It’s no coincidence that the federal government has grown far more powerful and expensive since President Johnson’s Great Society programs exploded government spending. Lessen Washington’s power and cost, then the rest of us can get back to pursuing happiness.

 Read More at The Washington Examiner

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