http://www.washingtonpost.com/business/economy/growing-wealth-widens-distance-between-lawmakers-and-constituents/2011/12/05/gIQAR7D6IP_story.html GrowingMessage 1 of 1 , Dec 26 2:37 PMView Source
Growing wealth widens distance between lawmakers and constituents
By Peter Whoriskey,
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, little or no money, and he was a Republican in a district that tilted Democrat.
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.
Back 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 representatives 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 has risen 2 1 / 2 times, according to the analysis of financial disclosures, rising from $280,000 to $725,000 in inflation-adjusted dollars.
Over the same period, the wealth of an American family has declined slightly, with the median sliding from $20,600 to $20,500, according to the Panel Study of Income Dynamics from the University of Michigan.
All figures have been adjusted for inflation and exclude home equity, which is not included in congressional reporting. The year 1984 was chosen because it was the earliest for which consistent wealth data were 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 and 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, 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 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, said. “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. The government should be run more like a business and 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 so-called Ryan budget plan, 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 ’60s.
“He’d say ‘Oh, I love your ideas, I love your ideas,’ ” Kelly recalled. “But he’d say, ‘You know why its a great country, don’t you? We worked our asses 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; by 2009, the 90th percentile was worth 12 times the median family, according to the Panel Study of Income Dynamics out of the University of Michigan, 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 amount that the average winning candidate for a House seat spent has quadrupled in inflation-adjusted dollars to $1.4 million, according to the Federal Election Commission.
For example, Myers’s first winning campaign for Congress, 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.
“Each one had different colors and designs my mom made — and they’d hand them out at stores,” Myers’s son, Mark, recalled. “I don’t want to disparage my parents, but it was kind of like they were running for student council.”
By contrast, when Kelly ran for the first time in 2010, he spent $1.2 million on his election, financing $380,000 of it himself, according to campaign records.
Finally, while congressional pay is a frequent object of controversy, it is unlikely to have been one of the reasons for the growing disparity between representatives and their constituents. In inflation-adjusted dollars, Myers earned $215,000 in 1977; today, a member of Congress earns $174,000.
About a decade ago, academics studying the effect of income inequality on politics noticed a striking fact: The growth of income inequality has tracked very closely with measures of political polarization, which has been gauged using the average difference between the liberal/conservative scores for Republican and Democratic members of the House. The scores come from a database widely used by academics.
“The proximity of these trends is uncanny,” according to a 2003 paper by researchers Nolan McCarty, Keith T. Poole and Howard Rosenthal. “Remarkably, the trends of economic inequality and elite political polarization have moved almost in tandem for the past half-century.”
Exactly why this should be is a matter of ongoing research. Likewise, it is probably impossible to pinpoint the effects that the growing wealth gap may have on members of Congress — too many different factors, including party affiliation and district leanings, come to bear when a member of Congress casts a vote.
But a person’s financial circumstances certainly impacts a person’s political outlook. For example, people identified as lower or middle class have been more likely to see income inequality as a problem and to favor redistribution of income, according to figures from the General Social Survey.
Moreover, there is at least some research that shows that members of Congress bring their life experiences to bear when they vote. Members of Congress with a higher proportion of daughters, for example, are more likely to take liberal positions on women’s issues, according to a 2006 working paper for the National Bureau of Economic Research by Ebonya Washington.
Similarly, a representative’s occupation before being elected influences how liberal or conservative he or she votes, according to an analysis of more than 50 years of congressional votes by Duke University professor Nick Carnes.
In order from most conservative to most liberal: farm owners; businesspeople such as bankers or insurance executives; private-sector professionals such as doctors, engineers and architects; lawyers; service-based professionals such as teachers and social workers; politicians; and blue-collar workers, according to the analysis, which is being published in Legislative Studies Quarterly.
Carnes said that while party affiliation is the strongest determinant of congressional voting, “the differences between legislators of different occupational backgrounds are pretty striking. People tend to bring the worldview that comes with their occupation with them into office,” he said.
‘Kill more than you eat’
Kelly begins the story of the car dealership with his father, who started out in the auto business as a “parts picker” in a warehouse. Getting paid by the part, he donned roller skates to bump up his productivity.
Eventually his father saved enough to buy a dealership here and soon the family was building a new showroom themselves on a farm just outside town. Mike Kelly, as the oldest, was in charge of feeding the animals.
“Each of the boys was in charge of some area of the dealership,” recalled Pat Collins, who worked for a year at the dealership in the ’70s. She is now the director of the Butler County Historical Society. “That was Mike’s life — the cars. The Kellys had the dealership, but those kids were not put above anybody else. They worked.”
“He used to sweep up the garage, wash cars for his dad,” said Art Bernardi, Kelly’s old football coach at Butler High School, where Kelly excelled. “I’m sure he had a lot more than the average guy. But he doesn’t live a fancy life. He acts like someone who works at the mill or whatever.”
In 1973, Kelly married Victoria, an heir of the Phillips oil fortune. Kelly’s financial disclosure forms show that among her holdings is stock in Phillips Resources Inc., valued at between $5 million and $25 million, and which generated more than $100,000 annually in dividends.
Four years out of college in 1974, Mike and Victoria were able to buy a home for $50,000, roughly twice the median value of home in Pennsylvania at the time, a large, stately home near the downtown.
In 1997, Kelly bought his dad’s business from him, taking out a $1.6 million mortgage to pay for it.
When discussing his wealth and how it came to him, Kelly, who was called “Millionaire Mike” during the election campaign, grows animated.
“The way my dad taught me was pretty basic: You have to kill more than you eat. You gotta wake up every day before anyone else, you better get to work and you better stay later than everybody else,” he said. “I’m a rich guy because I’ve worked hard. I gotta work every fricking day. Listen, nobody gives it to you. I compete. I’m not the only guy selling hot dogs at the ballpark, okay?”
His life at the car dealership influences much of his political outlook:
— On unemployment: Asked how long the government should pay jobless benefits, Kelly suggests that the government checks keep some of the unemployed from returning to work. He interviews some of the jobless for openings at the dealership.
“They say, ‘When are you looking to hire somebody?’ I say, ‘Right now — that’s why we have an ad in the paper.’ They say, ‘Well, I still have about six weeks left on my unemployment. Will you still be looking for somebody then?’
“I think that in a way we have made it harder for people to make a decision to move forward,” Kelly said.
— On the estate tax, which he would like to repeal: “The death tax doesn’t make sense to me. I would like to think that after I’ve worked all my life I could pass something on and not have to worry about a government that already overtaxed me my whole life taking it one day.”
— On Washington, the wealthy, and the private sector: “Let’s stop railing against the really wealthy because I got to tell you something, as a guy who has had to pay his own way his whole life, I am greatly offended by the idea that somehow someone in Washington knows how to spend my money better than I do,” Kelly said during emotional remarks during a committee markup in June that attracted lots of attention through YouTube.
— Kelly has been critical of the bank bailouts, too. But he declined to say whether he favored the government’s $50 billion bailout of General Motors, which benefited his auto dealership. Had GM gone out of business, it would have deprived Kelly of cars to sell at his Chevrolet Cadillac dealership, reducing his inventory to Hyundai, Kia and used cars. The government’s “Cash for Clunkers” program, which offered financial incentives for consumers to trade in old cars, also helped Kelly sell $2.9 million of cars.
As the automaker neared the brink of collapse in December 2008, didn’t he hope the government would offer a lifeline?
“I thought about making my payroll every two weeks,” he said.
From poverty to elected office
In the “hot mill” at the Armco steel plant, Myers supervised about 25 steel workers, the members of an independent union. The operation transformed slabs of steel in ovens heated to about 2,000 degrees Fahrenheit into coils, for later processing. He considered himself neither a worker nor a part of executive management. He was a shift foreman with engineering responsibilities, and each day he wore a work shirt, jeans and work boots.
He had grown up poor. His father, a bricklayer, had a drinking problem, he said, and his mother, a schoolteacher, largely raised Myers and his three siblings. At 9, Myers recalls working at his grandfather’s nine-table restaurant, washing dishes for 10 cents an hour. As a teenager, he started a business mowing lawns and eventually set his eyes on getting one of the co-op jobs at the steel mill, which allowed him to earn a bachelor’s degree in mechanical engineering at the University of Cincinnati.
That day in the dining room, he had explained to his wife that voters deserved better representation because neither “the Democrats or Republicans are putting up good options for us.”
Besides, he had tried to talk his brother into running, and he wouldn’t do it. He recognized his run for Congress might seem presumptuous.
“When it started getting around and the fellas down at work heard about it, I thought people might say stuff — you know, down there you stub your toe and they ridicule you,” Myers said. “I suppose some people probably thought, ‘What’s that Myers think he’s doing?’ But no one said anything. I was very grateful.”
He didn’t know much about running a campaign, and it was largely improvised by his wife, Elaine. She organized small gatherings and offered him tips on public speaking — when she noticed people’s feet started shuffling, she flashed him a sign to move onto another subject.
For fundraising, he turned to the president of a local plant who had connections to some of the money in the area.
“I said, ‘Why don’t we have a fundraiser at Elwood Country Club?’ ” recalled Robert Barensfeld, then president of the Elwood City Forge, a local plant, who became his finance chairman. “He thought it was the greatest idea since free beer.”
But while Myers accepted individual contributions, he shunned money from businesses and lobbying groups. Barensfeld said “it was against his principle.” Some of his volunteers thought he should take it, but Myers told them he didn’t want to get elected simply because he had more money.
He lost his first election, but was encouraged by the narrow margin of defeat. He ran again in 1974 and won. On the day after his election, a Pittsburgh TV station asked him to come be a guest on a news show. Myers told them he couldn’t come because he had worn out both the family cars during the campaign. The station agreed to send a car for him.
In Washington, Myers in most ways hewed to the Republican line: He voted at times to hold down the government’s debt, for example, and voted against raising Social Security taxes.
But like Kelly, he brought to bear his life experiences.
As might be expected of an engineer, Myers had a scientific cast of mind, according to his staffers at the time, demanding research and numbers to inform his views. But with the steel mills in his district struggling, he was also keenly aware of the problems facing thousands of workers. On issues relating directly to workers, Myers sometimes broke with the party majority.
He supported, for example, a hike in the minimum wage, then $2.30 an hour. He supported an amendment expanding a program that extends unemployment and other benefits to workers adversely impacted by trade. He voted fora $4 billion boost to a public works jobs program pushed by President Carter.
“I think he realized that good people sometimes fall on hard times,” said James Kunder, who as a young Harvard graduate just out of the Marines worked as an aide to Myers in the ’70s. “He wouldn’t have been elected from that district at that time if he didnt exude some of that spirit.”
Today, amid the debates on tax rates on the wealthy, he suggests raising the marginal income tax rate on the very highest incomes to 45 percent.
Myers also broke with Republicans on issues relating to business influence in politics, voting to require lobbying groups to disclose mass mailings and proposing an amendment that would force businesses to disclose when former members of the House lobbied on the House floor.
“He clearly saw that money could adversely affect politics,” said Jim Turner, another former aide, then recently out of Yale Divinity School.
Near the beginning of his second term, Myers stunned his staff and many in his district by announcing that he would not run for a third term, which it appeared he could have easily earned. He said he wanted to spend more time with his kids. He returned to the mill, taking a pay cut from the $57,500 that members of Congress then earned. Back in Butler, he coached his son’s baseball team and helped start a soccer program at the high school.
Today, when asked about the effect of wealth on members of Congress, Myers is characteristically detached.
“I guess I could see where someone who made a lot from personal risk taking and business initiative could have a different outlook. Even if people come with biases, I’m not sure they’re evil biases. I don’t have any problem with someone who has a lot of money. But I don’t have any doubt that my perspective was different from someone who had more money.”