While Americans Become Poorer, Congress Becomes Richer

February 8, 2012

While the median net worth of members of Congress jumped 15 percent from 2004 to 2010, the net worth of the richest 10 percent of Americans remained essentially flat. For all Americans, median net worth dropped 8 percent, based on inflation-adjusted data from Moody’s Analytics.

Representative Nancy Pelosi, the House Democratic leader, was challenged about her wealth, as much as $196 million, by a member of her own party a few months ago. Representative Laura Richardson, a California Democrat who is among the poorest members of Congress with as much as $464,000 in debt, attacked Ms. Pelosi at a closed-door Democratic caucus meeting for endorsing a Congressional pay freeze, according to a report in Politico that was confirmed by other members.

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The data analyzed by The Times corroborated the idea that incoming members are in fact richer than those in the past. The freshman class of 106 members elected last year, including many Tea Party-backed Republicans, had a median net worth of $864,000 — an inflation-adjusted increase of 26 percent from the 2004 freshmen.

Congress has never been a place for paupers. From plantation owners in the pre-Civil War era to industrialists in the early 1900s to ex-Wall Street financiers and Internet executives today, it has long been populated with the rich, including scions of families like the Guggenheims, Hearsts, Kennedys and Rockefellers.

But rarely has the divide appeared so wide, or the public contrast so stark, between lawmakers and those they represent.

Why are members of Congress becoming wealthier while the average American becomes poorer?

One very powerful reason are the investments bought due from insider trading. When a Congressman knows of an upcoming bill which is likely to pass which will result in profits for certain companies, they buy stock.

Pass = Profit

This is why we need the STOCK Act. Bills are being passed with the primary concern of many members of Congress as to what the profit will be made, not from the what is in the best interest of Americans.