Report: 237 millionaires in Congress - Erika Lovley - POLITICO.com

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Talk about bad timing.

As Washington reels from the news of 10.2 percent unemployment, the Center for Responsive Politics is out with a new report describing the wealth of members of Congress.

Among the highlights: Two-hundred-and-thirty-seven members of Congress are millionaires. That’s 44 percent of the body – compared to about 1 percent of Americans overall.

CRP says California Republican Rep. Darrell Issa is the richest lawmaker on Capitol Hill, with a net worth estimated at about $251 million. Next in line: Rep. Jane Harman (D-Calif.), worth about $244.7 million; Sen. Herb Kohl (D-Wis.), worth about $214.5 million; Sen. Mark Warner (D-Va.), worth about $209.7 million; and Sen. John Kerry (D-Mass.), worth about $208.8 million.

All told, at least seven lawmakers have net worths greater than $100 million, according to the Center’s 2008 figures.

“Many Americans probably have a sense that members of Congress aren’t hurting, even if their government salary alone is in the six figures, much more than most Americans make,” said CRP spokesman Dave Levinthal. “What we see through these figures is that many of them have riches well beyond that salary, supplemented with securities, stock holdings, property and other investments.”

The CRP numbers are somewhat rough estimates – lawmakers are required to report their financial information in broad ranges of figures, so it’s impossible to pin down their dollars with precision. The CRP uses the mid-point in the ranges to build its estimates.

Senators’ estimated median reportable worth sunk to about $1.79 million from $2.27 million in 2007. The House’s median income was significantly lower and also sank, bottoming out at $622,254 from $724,258 in 2007.

But CRP’s analysis suggests that some lawmakers did well for themselves between 2007 and 2008, even as many Americans lost jobs and saw their savings and their home values plummet.

Senate Minority Leader Mitch McConnell (R-Ky.) gained about $9.2 million. Sen. James Inhofe (R-Okla.) gained about $3 million, Sen. Daniel Inouye (D-Hawaii) had an estimated $2.6 million gain, and Richard Shelby (R-Ala.) gained about $2.8 million.

Some lawmakers have profited from investments in companies that have received federal bailouts; dozens of lawmakers are invested in Wells Fargo, Citigroup, Goldman Sachs and Bank of America.

Among executive branch officials, CRP says the richest is Securities and Exchange Commission Chairwoman Mary L. Schapiro, with a net worth estimated at $26 million.

Secretary of State Hillary Clinton is next, worth an estimated $21 million. President Barack Obama is the sixth-wealthiest, worth about an estimated $4 million. Vice President Joe Biden has often tagged himself as an original blue collar man. The CRP backs him up, putting his net worth at just $27,000.

He’s hardly the worst off.

Rep. Alcee Hastings (D-Fla.), freshman Rep. Harry Teague (D-N.M.), Rep. Jeff Fortenberry (R-Neb.), Rep. John Salazar (D-Colo.) and Rep. Sander Levin (D-Mich.) each a net worth of less than zero, CRP says.

One caveat on those numbers: Federal financial disclosure laws don’t require members to list the value of their personal residences. That information could alter the net worth picture for many lawmakers.

Even so, Levinthal said, “It is clear that some members are struggling financially.

“Over a calendar year, one’s wealth can change drastically. Many peoples’ investments took a nose dive over night in the last year,” he said.

A number of lawmakers are estimated to have suffered double-digit percentage lossed in their net worth from 2007 to 2008. The biggest losers include Kerry, who lost a whopping $127.4 million; Warner lost about $28.1 million; Sen. Dianne Feinstein (D-Calif.) lost about $11.8 million; and Sen. John McCain (R-Ariz.) lost about $10.1 million.

Letter From New Delhi: India Loses Patience With the Super-Rich - washingtonpost.com

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By Emily Wax
Washington Post Foreign Service
Tuesday, October 6, 2009

NEW DELHI -- In this developing nation, government officials have long enjoyed first-class air tickets, overnight stays at five-star hotels, and vast entourages of servants and security, in what is known here as "V-VIPism."

But with the global economy in peril and India in the middle of its worst drought in years, such displays of wealth have begun to anger the public, especially after the Indian media reported that Foreign Minister S.M. Krishna and his deputy, Shashi Tharoor, had been holed up for more than three months in two of the capital's most opulent five-star hotels while their pricey bungalows were being built.

The men said they were paying for the hotel stays out of their own pockets. But television pundits wondered how public servants could afford suites that can cost anywhere from $250 to more than $2,000 a night.

While the extravagance is not all that notable for India, the fact that it's become such a hot issue is. Many Indians say an "austerity drive" announced by the ruling party would never have even surfaced 10 years ago. There is more hope for genuine social mobility in India then ever before and more willingness to question those at the top who are seen as living lavishly on the public dime.

The two Foreign Ministry officials recently moved out of the hotels and into modest guesthouses. But that's when penny-pinching became political.

Suddenly, leaders of all ages and political parties began flying economy class, taking the train, eating roti rolls and lentils at roadside truck stops, and wearing khadi -- Mohandas Gandhi-esque homespun cottons, which are a symbol of commitment to the common man in Indian politics. All this was done with the cameras rolling, of course.

Pranab Mukherjee, the finance minister, flew economy class from Delhi to Kolkata. "It was quite enjoyable," Pranab told a scrum of TV reporters.

Soon after the hotel exposé, Sonia Gandhi, leader of the ruling Congress party, announced the austerity drive and flew economy class. She had also previously asked ministers to contribute 20 percent of their salaries toward drought relief.

Rahul Gandhi, the party's heir apparent and Sonia Gandhi's son, made front-page news when he took the train.

More recently, Rahul Gandhi made headlines when he visited a poor rural area and slept outside on a rope cot known as a charpai, refusing even a mosquito net. He then bathed at a hand pump, ate local vegetables and hung out with low-caste farmers.

But there is a question of just how sincere these efforts really are. Tharoor, minister of state for external affairs, went on Twitter and wrote that he would travel "cattle class out of solidarity to all our holy cows." He was chastised by leaders of the Congress party, who were reelected this year on a platform to lift hundreds of millions of Indians out of abject poverty.

Tharoor, a well-dressed man with a head of thick, shiny black hair, is popular in India and was well respected abroad when he was a U.N. undersecretary general. His defenders said that his comments were clearly a joke and that most Indians themselves aspire to fly first class.

The tabloid newspaper Mail Today ran a front-page story describing "sheepish Tharoor going to various offices through the day, to apparently apologize for his remarks. All in a country where less than one percent of the population travels by air."

Even as the politicians appear to be adopting more austere ways, they also know that deep beneath the feelings of young Indians and their aspirations to the middle class is an even stronger current of respect for the wealthy. In a nation built on centuries of caste-driven roles, the tolerance of those born to a higher position is strong.

"Rarely are the rich questioned," said Brahma Chellaney, a security expert with the New Delhi-based Center for Policy Research. "Egalitarianism is not from this part of the world. This is starting to change."

The Scottish-born William Dalrymple, who lives in India and is the author of several best-selling books on Indian history, weighed in on the hubbub: "In London you might expect the traffic to be held up for the queen or the prime minister, but that's it -- in Delhi, traffic will be held up for the minister of fertilizer distribution. All this makes for a greater contrast and culture of irritation between the haves and have-nots as compared to anywhere else I have lived," he wrote in the business newspaper Mint.

Government V-VIPs are known to shut down rush-hour traffic whizzing by with sirens blaring and red-and-blue lights flashing atop their official white sedans, complete with curtains to keep child beggars from peering into the car windows. They have separate lines at airports and are often ushered into luxury hotels with a phalanx of armed guards.

India is often described as the best place in the world to be rich and the worst place to be poor. It's not just V-VIPs who enjoy a life of privilege. Even most middle-class Indians have a staff of servants, including maids, cooks, laundry men, nannies, drivers and what are known as "peons," or fetchers of lunch.

Amit Gupta, 34, a manager of a food company, said it is up to elected officials to lead the change. Only if they do, he said, will modern Indians truly be able to move up the economic ladder.

"It's become our national reality show. But if our politicians go on TV and eat street food, we all know that they'll never be seen there again once this attention is over," Gupta said. "It makes good television, though."

Special correspondent Ayesha Manocha contributed to this report.

Race, Wealth, and Intergenerational Poverty

Darrick Hamilton and William Darity Jr. | August 17, 2009

Despite an enormous and persistent black-white wealth gap, the ascendant American narrative is one that proclaims our society has transcended the racial divide. But wealth is a paramount indicator of social well-being. Wealthier families are better positioned to afford elite education, access capital to start a business, finance expensive medical procedures, reside in higher-amenity neighborhoods, exert political influence through campaign contributions, purchase better legal representation, leave a bequest, and withstand financial hardship resulting from an emergency.

The wealth gap is the most acute indicator of racial inequality. Based on data from the 2002 Survey of Income and Program Participation, white median household net worth is about $90,000; in contrast it is only about $8,000 for the median Latino household and a mere $6,000 for the median black household. The median Latino or black household would have to save nearly 100 percent of its income for at least three consecutive years to close the gap. Furthermore, 85 percent of black and Latino households have a net worth below the median white household. Regardless of age, household structure, education, occupation, or income, black households typically have less than a quarter of the wealth of otherwise comparable white households.

Since the election of Barack Obama, a growing belief has emerged that race is no longer a defining feature of one's life chances. But the extraordinary overlap between wealth and race puts a lie to the notion that America is now in a post-racial era. The smallest racial wealth gap exists for families in the third quartile of the income distribution where the typical black family has only 38 percent of the wealth of the typical white family. In the bottom income quartile -- the group containing the working poor -- a black family has a startlingly low 2 percent of the wealth of the typical white family.

Those who recognize the racial wealth gap but still embrace the idea of a post-racial America have crafted two explanations for this disparity. The first is that, in search of immediate gratification, blacks are less frugal when it comes to savings. Indeed, in an April lecture at Morehouse College, Federal Reserve Chair Ben Bernanke attributed the racial wealth gap to a lack of "financial literacy" on the part of blacks, particularly with respect to savings behavior.

Such an explanation, however, is not the case. Economists ranging from Milton Friedman to Marjorie Galenson to the recently deceased founder of the Caucus of Black Economists, Marcus Alexis, found that, after accounting for household income, blacks historically have had a slightly higher savings rate than whites. In 2004, economists Maury Gittleman and Edward Wolff also found that blacks save at a moderately higher rate than do whites, again after adjusting for household income. This indicates even greater black frugality because many higher-income blacks offer more support to lower-income relatives than do whites, further reducing their resources to save.

The second explanation given to support the post-racial narrative is that inferior management of assets owned by blacks has resulted in lower portfolio returns. However, recent research finds no significant racial differences in asset appreciation rates for families with positive net worth.

Recessions disproportionately affect black and Latino families. During the 1999–2001 recession, median household wealth fell by 27 percent for both Latinos and blacks, while it grew by 2 percent for whites. The current recession likely will worsen the racial wealth gap. Although whites are more likely than blacks to own their home, the share of black wealth in the form of housing is nearly twice as large as the white share. And with blacks far more likely than whites to have been steered toward sub-prime loans in discriminatory credit markets, the foreclosure crisis is bound to have a more deleterious effect on black wealth than on white wealth.

For example, a recent report on mortgage lending and race by the Institute on Race and Poverty at the University of Minnesota found that black Twin City residents earning over $150,000, in comparison to whites earning below $40,000, were twice as likely to be denied a home loan. Those fortunate (or unfortunate) enough to get a loan were more than three times as likely to have a sub-prime loan.

Economic studies also demonstrate that inheritances, bequests, and intra-family transfers account for more of the racial wealth gap than any other demographic and socioeconomic factor, including education, income, and household structure. These intra-familial transfers, the primary source of wealth for most Americans with positive net worth, are transfers of blatant non-merit resources. Why do blacks have vastly fewer resources to leave to the next generation?

Apart from the national failure to endow ex-slaves with the promised 40 acres and a mule after the Civil War, blacks were deprived systematically of property, especially land, accumulated between 1880 and 1910 by government complicity and fraud as well as seizures by white terrorists. During the first three decades of the 20th century, white rioters destroyed prosperous black communities from Wilmington, North Carolina, to Tulsa, Oklahoma. Restrictive covenants, redlining, and general housing and lending discrimination also inhibited blacks from accumulating wealth.

Given the importance of intergenerational transfers of wealth and past and present barriers preventing black wealth accumulation, private action and market forces alone cannot close an unjust racial wealth gap -- public-sector intervention is necessary.

Indeed, the public sector already subsidizes asset acquisition. A 2004 report by the Corporation for Enterprise Development estimates that, even before the current financial crisis, the federal government allocated $335 billion of its 2003 budget in the form of tax subsidies and savings to promote asset development such as mortgage deductions. This excluded any corporate subsidies and tax savings and was more than 15 times the amount spent on education.

At issue is not the amount but the recipients. Those earning over $1 million a year received about one-third of the entire allocation, while the bottom 60 percent of earners received only 5 percent. Individuals in the bottom 20 percent typically received a measly $4.24 benefit. A more progressive distribution could be transformative for low-income Americans.

The surge in the post-racial perspective has moved us away from race-specific policies. However, wealth, given the racial disparity of its distribution, can be an effective non-race-based instrument to eliminate racial inequality. We could shift from an income-based to a wealth-based test for transfer programs. Policy eligibility based on net worth below the national median would qualify a large proportion of black households. Electronic financial records and publicly available home appraisals now make it easier to estimate net worth, and to avoid savings crowd-out, the program could be structured similarly to the Earned Income Tax Credit program, which uses a phase-out schedule to avoid work disincentives.

These changes in eligibility should be coupled with policies to promote asset building. For example, the American Dream Demonstration program uses individual development accounts to create match incentives for low-income savers. Another initiative, the Saving for Education, Entrepreneurship, and Downpayment, established children's development accounts (sometimes called "baby bonds") to create endowed trusts for children at birth. In the United Kingdom, since 2005, every newborn receives a trust ranging from 250 pounds to 500 pounds depending on familial resources.

In 2004, the American Saving for Personal Investment, Retirement, and Education (ASPIRE) Act was introduced in Congress to establish children's development accounts in the U.S. While the nation's first black president eschews race-specific policies, perhaps a strongly amended ASPIRE bill designed to progressively distribute funds based on familial net worth can be the policy that enables him to "bind ... [black America's] grievances ... to the larger aspirations of all Americans."

We envision a "baby bond" plan of much greater magnitude -- progressively rising to $50,000 or $60,000 for children in families in the lowest wealth quartile and accessible once the child turns 18 years of age. We also would determine eligibility for such a program based upon the net-worth position, rather than the income, of the child's family (all children whose family fell below the national median for wealth would receive baby bonds).

We should strive not for a race-neutral America but a race-fair America. For that to occur, the transmission of racial economic advantage or disadvantage across generations would have to cease. Public provision of a substantial trust fund for newborns from wealth-poor families would also go a long way toward achieving the ideal.