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How One Likely Budget Compromise Will Promote More Congressional Corruption

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The current posturing by both the Democrats and Republicans over the debt ceiling impasse is that both sides are digging in for a long shutdown. Whether that proves to be the case or not, the resolution is likely to involve some face-saving concessions offered by each side. One that is up for grabs is the provision that allows Congressmen and their staffers to continue to have their own Congressional policies. This plan has been attacked as generous, with the Wall Street Journal describing features like doctors on site at Capitol Hill.

This is basically a long-standing plot to try to persuade the public that they can get a free lunch, even when what they are getting is rancid cooking.

The basic deal is as follows. If you pay cops terribly, you’ll get cops who take bribes. If you pay members of Congress or regulators way less than first year law school graduates in large New York or DC law firms, you’re going to get members and regulators who take bribes. If you cut health care subsidies for Congressional staff, you’ll get lobbyists writing the laws. It’s not that all poorly paid cops are corrupt, it’s just that it’s more likely for corruption to flourish where the public sector is radically unequal compared to the private sector.
That’s just the way it works.

And that’s why the movement to get rid of health care subsidies for members of Congress and Congressional staffers is so pernicious. It’s a surprise to most people the first time they find out that Congressional staff who write laws are often in their 20s. It’s because the pay, which is between $20,000 to $110,000 at the very most isn’t sustainable for people with families who want to live in the DC area. Some staff aren’t young, but many of them are working the hill (especially in committees) for a few years before heading back to law partnerships to get what is effectively deferred income.

We are constantly hearing the argument that members of Congress need their pay cut, or need to be replaced, or the latest incarnation, they should have their health subsidies for Obamacare cut. That was one of the proposals floated as part of the debt ceiling/CR resolution. The technical part of this is unimportant, suffice to say that this is purely about making it so that only the wealthy can affford to serve in Congress. This seemingly minor change is another plank in a long-term campaign to make Congress every more hostage to big business and other monied interests. It goes well beyond the common problem of Congressmen prioritizing the interests of their big backers over those of the broad base of their constituents. It’s that changes in how Congress operates over the last 20 years put big business in an even better position than before to make sure that legislation serves their interests.

One of the major, and still insufficiently recognized mechanisms to make it even easier for wealthy individuals and big corporations to influence Congress was put in place the last time radically conservative Republicans were ascendant, in the Gingrich era. One of Gingrich’s innovations, which was eagerly copied by the Democrats, was an explicit pay to play system. Leadership roles on committees was once determined by seniority. University of Massachusetts political scientist Tom Ferguson described how crassly explicit the pricing is, citing the work of Marian Currander:

Under the new rules for the 2008 election cycle, the DCCC [Democratic Congressional Campaign Committee] asked rank-and-file members to contribute $125,000 in dues and to raise an additional $75,000 for the party. Subcommittee chairpersons must contribute $150,000 in dues and raise an additional $100,000. Members who sit on the most powerful committees … must contribute $200,000 and raise an additional $250,000. Subcommittee chairs on power committees and committee chairs of non-power committees must contribute $250,000 and raise $250,000. The five chairs of the power committees must contribute $500,000 and raise an additional $1 million. House Majority Leader Steny Hoyer, Majority Whip James Clyburn, and Democratic Caucus Chair Rahm Emanuel must contribute $800,000 and raise $2.5 million. The four Democrats who serve as part of the extended leadership must contribute $450,000 and raise $500,000, and the nine Chief Deputy Whips must contribute $300,000 and raise $500,000. House Speaker Nancy Pelosi must contribute a staggering $800,000 and raise an additional $25 million.

Ferguson teases out the implications:

Uniquely among legislatures in the developed world, our Congressional parties now post prices for key slots on committees. You want it — you buy it, runs the challenge. They even sell on the installment plan: You want to chair an important committee? That’ll be $200,000 down and the same amount later, through fundraising…..

The whole adds up to something far more sinister than the parts. Big interest groups (think finance or oil or utilities or health care) can control the membership of the committees that write the legislation that regulates them. Outside investors and interest groups also become decisive in resolving leadership struggles within the parties in Congress. You want your man or woman in the leadership? Just send money. Lots of it….

The Congressional party leadership controls the swelling coffers of the national campaign committees, and the huge fixed investments in polling, research, and media capabilities that these committees maintain — resources the leaders use to bribe, cajole, or threaten candidates to toe the party line… Candidates rely on the national campaign committees not only for money, but for message, consultants, and polling they need to be competitive but can rarely afford on their own..

This concentration of power also allows party leaders to shift tactics to serve their own ends….They push hot-button legislative issues that have no chance of passage, just to win plaudits and money from donor blocs and special-interest supporters. When they are in the minority, they obstruct legislation, playing to the gallery and hoping to make an impression in the media…

The system …ensures that national party campaigns rest heavily on slogan-filled, fabulously expensive lowest-common-denominator appeals to collections of affluent special interests. The Congress of our New Gilded Age is far from the best Congress money can buy; it may well be the worst. It is a coin-operated stalemate machine that is now so dysfunctional that it threatens the good name of representative democracy itself.

Another big change took place when the Republicans took control of the House in 2010. They put through significant cuts to the budgets of individual members. The result was big reductions in the pay to Congressional staffers and the evisceration of other budget items. For instance, staffers no longer have funds to buy trade journals or travel to conferences to obtain information and develop contacts outside the Beltway reality-distortion machinery. The result is that it is becoming more difficult for staffers to get information outside the predigested, persuasively-packaged positions served up by lobbyists. And even worse, the pay levels make it well-nigh impossible to hire anyone who might be inclined to do so. As one staffer remarked, “Only the children of rich parents or people who plan to become lobbyists can afford to take this job.” And needless to say, most children of rich parents aren’t predisposed to challenge the current order of caviar for the elites, crumbs for everyone else.

And on top of that, the pay levels also assure that the staffers are overmatched by lobbyists who have top-dollar law firms providing language to be inserted in pending legislation. The average pay for new graduates of top law schools is the in the $130,000 to $167,000 range. By contrast, junior Congressional staffers make just above $20,000, mid range staffers (those with X to Y years of experience) get salaries of $30,000 to $50,000, and senior staffers (X to Y experience) receive in the $70,000s. A few very seasoned staffers might just breach the $100,000 mark. And remember, House ethics rules make it effectively prohibit to earn additional income through writing or speaking. The problem of low pay relative to job responsibilities is made worse by the fact that Washington, DC is a high-cost city by virtue of the impact of a tsunami of lobbying dollars on living costs. At the Atlantic Economy conference in March of this year, Paul Volcker voiced disapproval of the way-too-obvious sheen of prosperity in the capital. The AACRA cost index of American cities put Washington DC as number 8 of 307 urban areas, with costs 145% of this national average.

Once upon a time, it was possible to have Congress produce well-crafted, terse, durable legislation. Former member of the Australian Treasury John Hempton has called the Securities Act of 1934 the single best piece of legislation ever written. By contrast, there was a good reason Dodd Frank was a sprawling bill that left numerous issues open by punting on major questions by kicking them over to further studies or rulemaking (which was recognized to give the banking industry lobbyists a second go at watering the rules down).

The health care matter may seem a minor issue, but it’s not. When you have staffers that are already significantly undercompensated and then make it worse by inflicting another de facto pay cut on them, you just assure further bribery. It’s no different that underpaying cops leads to more abuses, like only a fraction of the cash seized in drug and numbers rackets bust being turned in (a former DA in Brigdeport, CT, a famously rough city, told em the skimming in his day was about 20%. His guess is that it is now closer to 80%).

Sadly, some corruption in government may be inevitable, but there’s a huge difference between a system which has some petty pilfering around the margin and one that is being redesigned to stymie anything other than influence-peddaling. And we can already see that the best government money can buy is a crappy product. But the people who’ve succeeded in making Congressional staffers even more susceptible to lobbying have done a masterful job of diverting attention from the real game by playing on class and economic resentment. Nothing like getting the peasants fighting among themselves to keep the nobles safe.

If citizens want a public sector that can govern, they are going to have to pay for it by either taxing the rich or raising the compensation of public servants, or probably, both. There’s no free lunch. Talented and effective people are going to go where they are rewarded, and they are going to work for those who pay them. That means an army of incompetents in Congress, or worse, an army of talented people in Congress who work for the private interests that actually pay their salaries.

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17 comments

  1. Eric O.

    Just to put a finer point on the post. Congressional staffers usually begin as unpaid interns, who often spend a summer or semester away from college to perform tasks like answering constituent mail (blowing them off). They often need to procure housing in the Washington D.C. area which can be pricey. Needless to say only a children of a certain status can afford the job because moonlighting as a bartender is a non-starter, because even with the limit on lobbying events, attending is still a mandatory function for such low level staffers (plus hey, free food).

  2. Thorstein

    Right on the money, Yves. Those of us who have been there know that in DC today, it’s sell out or move out.

    1. Pwelder

      Print this post out, fold it neatly, and keep it with your copy of This Town by Mark Leibovich.

  3. Banger

    Great post, Yves, this subject is much more important than people think. It’s funny that the reality of Washington and salaries/compensation for Congress and its staff is rarely talked even in the alternative press and what that staff does is where the rubber hits the road. In recent decades the big effort by the lobbying and PR firms has been to corrupt this staff by any means necessary–from pillow talk to lucrative job offers.

    At one time government work was seen as a legit alternative to the private sector as a secure and honorable profession. Today, the world of government is dominated by the world of consultants, lobbyists, PR people all with money to burn and money to make from legislation and regs. Plus, now federal workers are less secure and always in danger of being furloughed or having their job lost to further budget cutting. All this tends to cause workers to circle the wagons and avoid change and innovation.

    I have very mixed feelings about all this having been in gov’t as a consultant and seen how the system is gamed and corrupted on multiple levels. Yet, what else can we do? We need a central government but its deep unpopularity will lead to further cuts, further chances for the right to sabotage the system—and believe me, that has been the right-wing agenda for decades with the so-called left just following along a few years later to speed the process.

    1. sue

      “This concentration of power also allows party leaders to shift tactics to serve their own ends….They push hot-button legislative issues that have no chance of passage, just to win plaudits and money from donor blocs and special-interest supporters. When they are in the minority, they obstruct legislation, playing to the gallery and hoping to make an impression in the media…”

      Read more at http://www.nakedcapitalism.com/2013/10/how-a-likely-budget-compromise-will-promote-more-congressional-corruption.html#tK6GvCVEg3dYz7cp.99
      ………………….

      Which is what all who peruse legislation have viewed more and more often. It is rare these days that media even note legislation taking place.

    2. sue

      Banger-what “we can do” is end all campaign contribution to “the people’s representative government”, as my brother always notes-is money “speech”, or is it property-it is illegal to “give” property to influence legislation.

      1. Banger

        Well if money is speech and corporations persons without responsibilities who don’t have to suffer equivalent penalties to people then if you play out the “game” the world will be run by money and corporations and there will be no actual speech because all speech will become money, essentially.

        The problem we have with our political economy is that it is founded on values that will lead directly to neo-feudalism or some kind of fascism or both. The question is only how fast? The way “out” is to not attack the politics but the moral assumptions that this system is currently built on.

  4. James

    I confess I got no further than the 7th paragraph before giving up on the logic of this article, which discusses congressional pay and benefits as if they exist in an electoral vacuum. The fact is you have to be rich to run for congress, therefore we have mostly millionaires or soon-to-be millionaires there, i.e., 1%-ers representing the other 99%.

    If the electoral process were radically reformed such that ordinary joe’s could run and win, they’d be winning a glorious prize of high pay and super benefits to attain the office, and indeed thie rich sh*ts would stop running the show and demanding more pay or else they’ll go on the take, like the moral scum these hyper-privileged low life are…

    1. hunkerdown

      Exactly the sort of people that have no business there — the aspiring, I mean, not the poor.

  5. Lune

    Absolutely spot on, Yves.

    I’m always amazed by how much Americans denigrate their public servants. The US managed to fashion an effective, efficient, almost corruption-free civil service (not talking the politicians) over several decades of reform, and now, we’re in danger of losing it all because people are convinced that civil servants are the enemy.

    We take it for granted that any policy passed by DC will be implemented. But one only needs to look at many third world countries to see what happens when you’ve decimated your civil service: politicians happily pass all sorts of laws, and the corrupt civil service happily ignores them, or uses them for new opportunities to shake down the public. For example, for better or for worse, when a politician puts in legislation for a bridge-to-nowhere, at the very least, that bridge will be built. And probably won’t collapse with the first car that rides over it. In places like India, OTOH, funding for a new hospital or road or something magically gets diverted to a hundred different satraps and 10 years later, there’s not even a shell of a building as a result. That’s a difference that gets lost on the public that forgets what it was like living under a predatory and corrupt civil service.

    As for congressional staff, you’re correct. Except for a few truly dedicated people, the turnover in staffs is incredibly high. Most staffers are on a 5-10 year plan to gain enough experience to hit the next level of employment in the private world. While they may try to do the best they can during those five years, the constant loss of accrued expertise and the turnover in institutional memory means they are not as effective as they could be.

    And what the public doesn’t understand is that part of the reason we can pay good civil servants so much less is precisely because it’s made up in benefits including actual benefits like health insurance and pension plans, but also soft benefits like job security and a regular 9-to-5 schedule. Witness the fact that inevitably, whenever a task is outsourced from employed civil servants to private consultants, the costs usually balloon and the product is almost never as good.

    If Americans believe that the people in charge of writing the legislation to solve their complex problems should be paid less than their (now privatized) garbage man, then so be it. Just don’t be surprised at the results.

  6. paul

    Whenever I see ostensible progressives complaining about cushy congressional pensions, I try to disabuse them. If anything, those pensions should be higher so that legislators don’t have to be thinking about what their next job will be. Same for staff.

    But ultimately we have to reduce the Gini coefficient. Either by raising pay or by a suite of services that make high pay less necessary. How you do this nonviolently at this point is unclear to me.

    1. praedor

      No. No pensions. Only 401ks and Social Security. They MUST be required by law to depend upon what they’ve inflicted upon the real people of this country. They have been crying about public pensions and private pensions…for WORKING people only. They MUST be required by law to suffer under what they do to us. Hell, I’d like to see rich members barred from tapping into their wealth in retirement. To serve means they eschew their previous ill-gotten wealth and agree to live in retirement like real people subject to catfood cuts to their Social Security and worrying about finding a doctor that accepts their Medicare. Goose, meet gander.

  7. Glen

    Interesting to see we’re deregulating in DC and putting our politicians and government on the open market.

    Too bad we already learned from Wall St that unregulated open markets are a disaster.

    And when we get an even more dysfunctional government (although it is difficult to speculate what even more would look like), we’ll hear the predictable chorus of whocudaanoes.

  8. Susan

    Thanks for writing about this. I have a youg relative who was on a congressional staff in DC, after starting out in one of the member’s state offices right out of college. His DC pay started at $30k, and reached $40k four years later. Now he works for the administration in a cabinet department, for $50k. Through all this, his living situation has been precarious, and dependent on shared lodgings and a commute from across the Potomac because living in DC is prohibitive. Marriage? Children? Home ownership? Hard to pull off. He doesn’t even own a car.

  9. run75441

    Yves:

    Great post and I support it.

    “The health care matter may seem a minor issue, but it’s not. When you have staffers that are already significantly undercompensated and then make it worse by inflicting another de facto pay cut on them, you just assure further bribery.”

    I agree this is not a minor issue and the Republicans and Teabaggers are willing to sacrifice them to win with their political agenda. This is the same sacrifice they are willing to force upon those who can not afford healthcare insurance. They do not have to live it, so they walk away. It is not acceptable. They should be able to buy helathcare insurance under the same or similar subsidy as ESI which many of us in the private sector enjoy today.

    Thanks for exposing it.

  10. Praedor

    I disagree that public “servants” should be paid better. It depends. If they come into office rich, then they don’t need pay. At all. Means test the scumbags. If they are real people ( not rich) they get paid enough to live on. If rich, they have everything they need already.

    All the corruprion goes away (ok, most of it) if you make all elections 100% public funded only. NO private money allowed. Your “speech” in favor or against a candidate has to take the form of SPEECH, NOT MONEY. Accepting money from ANY private entity is grounds for arrest and losing your seat.

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