Don’t feel bad if you feel a sneaking envy when you read about the wealth of our members of Congress.
Overall, the legislators we elect to look after our tax dollars are richer than we are.
“I would think that while there are occasionally not-very-well-off legislators, they tend to do pretty well,” said Ross Miller, economics professor at the University at Albany.
While most Americans have a net worth of less than $100,000 — after you subtract the value of their homes — the average member of the House of Representatives has $5 million in net worth.
And the average senator? Closer to $13 million.
But that doesn’t mean they’re all filthy rich.
A look at the personal finances of the Capital Region’s congressional delegation shows they’re almost as diverse as the residents they represent.
It’s well-known that U.S. Rep. Scott Murphy, D-Glens Falls, is a multimillionaire.
But constituents may be surprised to learn that the 39-year-old still carries a student loan and owes family members more than $100,000. He’s saving money for his three children in college funds.
By contrast, U.S. Rep. Paul Tonko’s financial picture is as minimalist as the Democrat from Amsterdam is himself — he has little to his name besides a state pension but also doesn’t owe much to anyone. But he apparently plays the lottery on the side; he won a $2,500 prize last year before he took office.
Tonko said his modest net worth helps him identify with his 21st Congressional District constituents in a way that wealthy legislators may not.
“I think that there’s such a need to identify with all people,” Tonko said.
He finds it troublesome that more and more lawmakers are millionaires, saying that people in public office need to have a sensitivity for working families and the working poor: “There are a number of people who are working two jobs now to make ends meet.”
Sen. Kirsten Gillibrand, D-N.Y., appears to be a saver and carries a 401(k) left over from her days as a lawyer in private practice. Her husband, Jonathan, trades stocks frequently, and seems to have good fortune picking the right ones.
Democrat Sen. Chuck Schumer’s financial rap sheet looks like that of a man nearing retirement, since he has no liabilities and most of his savings in bonds.
The 59-year-old senator and his wife, Iris Weinshall, take in nearly $400,000 a year with both their salaries.
Members of Congress must file personal financial disclosure forms with their respective ethics offices — the House Committee on Standards of Official Conduct and the Senate Select Committee on Ethics — each year.
The disclosures were made mandatory by the Ethics in Government Act of 1978 to expose potential conflicts, not as a complete record of a legislator’s net worth.
Officials can exclude the value of their homes, vehicles and personal possessions, and liabilities like home mortgages and car loans. The numbers also don’t include the value of their federal pensions.
Still, the numbers give a clear picture of the legislators’ income, dividends, rent, interest and capital gains.
That’s where the numbers can get downright juicy, since legislators are more likely than most Americans to own individual stocks, bonds and mutual funds outside of retirement accounts.
“I would think that your typical politician would be holding assets that normal people they represent would not be holding,” said Miller, the economics professor. Most people carry the majority of their net worth in their homes, pensions, Social Security and retirement accounts.
“We’re not a country where a typical person has any significant wealth outside of that.”
Most of us can’t devote the time or energy, much less the funds, to buy and sell stocks as doggedly as Kirsten Gillibrand’s husband did in 2008.
Jonathan Gillibrand logged 187 transactions last year, with between $2.1 million and $8 million changing hands.
He made trades nearly every day from mid-January to mid-April, a month before their second child was born, and also conducted frequent transactions from late August through the end of November.
The British national is a venture capital consultant for Redbrick Partners, a real estate investment firm.
Tonko, who potentially has a negative net worth, is like many Americans but relatively poor compared to his congressional peers.
At least a quarter of us have negative net worth because of taking out too many loans, running up credit card debt or renting and not owning property, Miller said.
Those with negative net worth aren’t necessarily living in poverty, but they are living paycheck to paycheck.
“They’re driving a nice SUV. There are plenty of people like that with negative net worth,” Miller said. “People like to spend money. Americans are very good at doing it. You can find people who make half a million a year with small net worth.”
Not much to show
Perhaps that’s how one can explain Tonko, 60, who last year had somewhere between $2,000 and $30,000 in savings despite holding well-paying positions as a state assemblyman and, later, as president and CEO of the New York State Energy Research and Development Authority.
Compare him to Schumer, who at age 59 has between $358,000 and $1.04 million in savings and investments. Many of Schumer’s investments are bonds, including those held by banks, municipalities and school districts.
They’re solid investments, but aren’t increasing much in value.
By contrast, Gillibrand, 43, has increased her net worth more than threefold from 2007 to 2008, currently having between $1 million and $2 million in bank accounts in the United Kingdom and the United States. Like Schumer, she carries no liabilities.
But Murphy, who is richer than both Gillibrand and Schumer combined, carries at least $500,000 in liabilities.
Both financial patterns — a high net worth and no liabilities, and a high net worth with liabilities — are common and can make sense, Miller said.
“The difference is just if they’re in a line of business that requires having a lot of cash available to you, you’re going to be less likely to pay off your liabilities if they have little or no interest rates attached to them.”
Miller suggested Murphy’s student loan and loan from family probably carry low interest rates.
And his money is clearly working pretty hard for him in other areas.
Murphy, an entrepreneur turned venture capitalist, carries most of his net worth — between $2.9 million and $9.2 million of it — in venture capital partnerships all over the country.
He also earned a $421,582 salary from Advantage Capital Partners last year, and has dozens of bank accounts with a total balance between $500,000 and well over $1 million. The father of three started index funds in his children’s names, and owns between $300,000 and $1.2 million in individual stocks like Abercrombie & Fitch and Lehman Brothers.
Who’s got what
Capital Region officials, from richest to poorest:
* U.S. Rep. Scott Murphy, D-Glens Falls, is the 38th richest in the House, with between $3.9 million and $13.8 million as his reported net worth
* Sen. Kirsten Gillibrand, D-N.Y., is the 55th richest senator, with between $970,000 and $2.1 million to her name
* Sen. Charles Schumer, D-N.Y., is the 77th richest senator (or the 23rd poorest), with between $358,000 and $1.04 million net worth
* U.S. Rep. Paul Tonko, D-Amsterdam, is the 19th poorest member of the House, with a net worth of -$62,998 to $4,999
SOURCE: Compiled from OpenSecrets.org