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.