How Much Wealthier is Congress Than You?
The Great Recession that hit America just a few years ago ushered in the most devastating economic crisis since the Great Depression. The aftermath of the credit bubble is still taking place today. Unemployment levels remain stubbornly high, house prices are scrapping along the bottom at best and equity prices are still caught in a lost decade. The effects hit many Americans of all walks of life, but one group of citizens weathered the storm better than most.
According to a new Washington Post analysis, which is included in its Capitol Assets series, the majority of the members in Congress greatly increased their median household net worth more than the average citizen. Between 2007 and 2010, the median estimated wealth of the 535 members of Congress increased 5 percent. In comparison, the average American’s net worth plunged 39 percent during the same time period. Furthermore, the wealthiest one-third of Congress gained a whopping 14 percent.
The report also included several other interesting findings. Between 2004 and 2010, 72 members of Congress appear to have doubled their estimated wealth. Of those, there were 11 members that increased their portfolios by at least $10 million. At least 73 members have sponsored or co-sponsored legislation that could benefit businesses or industries in which they or their families had financial ties to in recent years.
While most Americans have a strong financial motivation to perform well at their jobs, many lawmakers receive bigger paychecks from outside their elected duties. At least 28 percent of Congress, or 150 members, reported receiving more income from outside jobs and investments than from their congressional salaries of $174,000. The Washington Post also reports, “Since 2004, lawmakers reported more than 3,500 outside jobs paying their spouses more than $1,000 a year. The lawmakers are not required to report how much the spouses are paid or what they did for the money.”
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Even though it seems like Republicans and Democrats are unable to agree on anything these days, they both appear to come together to enjoy wealth. The past economic difference between the two political parties have essentially vanished in recent years. The report finds that the median net worth of congressional Republicans came in at $881,786, only slightly higher than the $862,508 for Democrats. In comparison, the Federal Reserve reported earlier this year that the median net worth of families dropped from $126,400 in 2007 to only $77,300 in 2010, placing American balance sheets at a level not seen since 1992.
The Washington Post’s study involved analyzing financial disclosure forms and public records for all 535 members of the House and Senate that are filed annually and computerized by the Center for Responsive Politics. Most members are only required to report values of assets, debts and income in ranges, so midpoints of each range were used to summarize the dollar figures. Wealth was found to be held in a variety of instruments by Congress. The report finds that 127 members primarily held real estate, 117 placed their money in institutional funds, 75 in their spouses’ names, 51 in cash vehicles, 36 in specific stocks and bonds, 32 in high-turnover trading, 30 in business ownership and 20 in the agriculture field.
As a reminder, the Center for Responsive Politics scanned the disclosures last year to find the most loved stocks by Congress. The top ten are listed below:
General Electric (NYSE:GE)
Procter & Gamble (NYSE:PG)
Cisco Systems (NASDAQ:CSCO)
Bank of America (NYSE:BAC)
Johnson & Johnson (NYSE:JNJ)
Verizon Communications (NYSE:VZ)
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