Down and Out in Washington on $89,500 a Year
Rowe, Jonathan
Down and Out in Washington on $89,500 a Year Congress isn't underpaid. The rest of Washington is overpaid. by Jonathan Rowe People knew him only as "The Xerox Man . " His office, on an upper...
...Twenty dollars bought a book of 10 tickets to the Circle Theater...
...Valenti's salary alone would have paid the salaries of the entire congressional delegations from each of 22 different states, including Oregon, Arizona, Kansas, and Mississippi...
...The so-called "Capital Beltway" syndrome is greatly overblown...
...And that includes many in the media who rushed to Congress's defense...
...It's that the lobbyists in question would face ruin if that industry didn't believe that the lobbyists stood between itself and ruin...
...See "Abolish the Lobbyist Maintenance Tax," page 14...
...The Lobbyist Tax also makes the whole economy less efficient...
...The Dupont Circle Building, once a haven for underfunded groups, now has an elegant, Hyatt-style entrance and rents to match...
...Congress is itself to blame for much of the inflated affluence around it...
...One can usually avoid the sales tax by buying mail order, or avoid a state income tax by moving to New Hampshire...
...His renegade spirit matched the decade perfectly...
...Apple Computers started in a garage, not in the Trump Towers...
...Journalists do the same thing...
...Safire explained to The Washington Post that giving such speeches "gets you out of the ivory tower...
...Peanuts and parachutes And not by a little...
...Although people complained about the lack of "culture," one could live on a modest income and not feel deprived...
...When Dan Rostenkowski, the House Ways and Means Committee chairman, addresses a group of corporate CEOs, he's talking to men who average, according to Business Week, more than $2 million a year...
...The old low-rent Dupont Circle Building spawned all kinds of movements and causes, from the Airline Consumer's Action Project to the People's Bicentennial Commission...
...Which brings us to the subject of congressional pay raises...
...What the nation needs right now is not a raise in congressional pay but a cut in the Lobbyist Maintenance Tax...
...At least we can vote against the members of Congress we don't agree with...
...Low budget groups of the kind that flourished during the sixties can no longer afford the rent...
...Today a restaurant called Lauriol Plaza occupies the site...
...judges compare theirs to lawyers in private practice...
...The Lobbyist Tax is a case of what economists call "market failure . " People don't have enough information about it to make an informed decision in the marketplace...
...Eighteenth Street and Columbia Road, once a hub of inventive neighborhood activism, now sports a chic ethnic restaurant row...
...Given the elephantine incomes of the Safires and Donaldsons and DiBonas and Valentis, it's no wonder the capital goes through periodic spasms of congressional mopes...
...Instead, they find themselves trying to run with a very expensive crowd...
...Consumption is, after all, social—in an industrial society people have wants, not needs...
...But when everyone else seems rich too, it starts to hurt...
...It is not surprising that Will is now bemoaning what he calls a "childish impatience with imperfection" and "miniaturized ethics" in Washington...
...Almost 9 out of 10 D.C...
...In effect that's a tax...
...Worse, the new upscale Washington has aggravated the local self-pity index...
...Frequently, companies get a greater return from the tax loopholes they achieve by supporting their lobbyists in Washington than they could by investing in machinery and equipment back home...
...Lawyers in Washington can do even better...
...It's that way all over town...
...David Broder gave voice to the establishment pique when he accused pay-raise opponents of "KnowNothing demagoguery" and chastised Ralph Nader, a leader in the fight, for "moralistic blackmail . " Nader, meanwhile, was lionized throughout the nation, and with reason...
...But the norm is extraordinarily high...
...The nation needs a slimmed-down capital because a democracy itself is like a city—it requires low-rent districts in which to renew itself...
...A portion of every dollar spent at the gas pump supports the American Petroleum Institute in Washington, as surely as another portion goes to support the maintenance of highways...
...People don't have to be in Washington to be parochial and short-sighted...
...The Washington that fosters a sense of deprivation in public officials is also a Washington that's bad for democracy...
...By contrast, the Lobbyist Tax compels us to support interest groups we don't agree with...
...Volvos and huts The Washington establishment—conservative as well as liberal—could not understand why taxpayers would begrudge their poor, beleaguered representatives a decent wage...
...But the Lobbyist Tax gets you wherever you go...
...Charles DiBona of the American Petroleum Institute gets $330,000 a year, as does Richard Lesher of the U.S...
...Robert 0. Anders of the Food Marketing Institute gets $406,000...
...Meanwhile, for all the heat Congress takes for presiding over an inefficient government, Business Week judged Eisner to be among the CEOs giving their shareholders the least in return for their pay...
...When Americans buy products at the supermarket they should know when their purchases are supporting Jesse Helms or Ted Kennedy, or any other politicians or causes...
...All the way up to Columbia Road, the story is the same...
...According to the D. C. Bar Association, the average Washington lawyer—including the criminal lawyers on 5th Street—makes $91,000, more than a U.S...
...This helps explain why nowadays the press tends to see the congressional pay raise issue in Beltway terms rather than lunchpail ones...
...But as golden parachutes go, that's peanuts compared to the $53.8 million that F. Ross Johnson, the former president of RJR Nabisco, got after the buyout of that company...
...Not only the network anchors but lots of people you'd hardly recognize...
...Of the Washingtonian's list of 50 top Washington reporters, two-thirds make close to $200,000 a year or more...
...In the interest of an efficient free market, therefore, Congress should require political content labeling...
...At the corner of S Street was Stone Soup, a grocery collective that sold bulk grains and fresh produce at low prices and was a social center for the Dupont Circle community...
...Nobody asks the nation's insurance customers whether they want to contribute to a $50 million lobby, which works to maintain special favors— such as the antitrust exemption for insurance companies—that help keep insurance rates high...
...James P. Mooney of the National Cable Television Association gets $559,000...
...And then Congress has to sit there and listen to such executives demand tax breaks while bewailing their lot...
...Ordinary citizens without expense accounts are on their own...
...A $1.95 souvlaki at the Astor was a fine night out...
...Obscure print journalists get from $2,000 to $5,000 per speech...
...In a recent Forbes survey of high-paid executives, Allen F. Jacobson, head of 3M Corp., was asked how it felt to be making over $2 million a year...
...This is a regrettable American trait...
...It's hard for any politician to be expected to raise money on a personal basis when he's in a $200 suit, and they are in $1,000 suits," is how a friend of Tony Coelho, recently retired congressman and fundraiser, explained the feeling...
...As a result, corporations can make them pay extra for something they may well not want...
...People don't feel bad when just the rich are rich...
...It's the American way . " The Washington Post's way, of course, is to lambaste any member of Congress who utters a thing like that...
...As recently as the late sixties, Washington was still a sleepy southern city...
...Asked by a reporter what the influx of Reaganites meant for the Washington real estate market, one broker beamed, "It means wonderful things . " $1,000 suits The sense of deprivation is not entirely psychological, of course...
...If these sums seem like something out of Fantasyland, they're nothing compared to what you get for running Fantasyland...
...Surrounded by people who make much more than they do, members of Congress feel deprived even when they are not...
...They would also provide an address to which customers can write for more detailed information...
...Take a walk along 18th Street...
...He bragged about rigging the meter in the Xerox machine to beat the leasing company...
...An auto driveaway company, an estate liquidation business, and—his personal favorites—an escort service and outcall massage...
...I just want to get up to where the baseball players and rock stars are," Jacobson laughed...
...And even when Washington lobbyists aren't really able to provide that kind of financial edge, they can often convince their clients that they perform this service...
...In the greater metropolitan area, the average single-family house sells for around $200,000...
...Anyone who doubts it is a tax—that is, who doubts it's compulsory—should set out tomorrow with the purpose of buying a gallon of gasoline, a watt of electricity, or a loaf of bread without paying it...
...When David Brinkley and George Will discuss the pay raise on the Sunday morning talk shows, they are looking down from the rarefied heights of their millionplus incomes, not up from the $21,000 national median...
...Washingtonians are about 70 percent more likely to buy Volvos than Americans generally...
...Teachers compare their salaries to those of high-tech engineers...
...It even forced the Perpetual American Bank to devote a part of its portfolio to neighborhood loans as a condition of agreeing to let the bank locate at 18th and Columbia...
...Because it would let consumers exercise control over political cash flow, political content-labeling could help drain some of the corrupting cash excess out of Washington...
...Call it the Lobbyist Maintenance Tax...
...I ain't talking," Sam Donaldson told The Washington Post...
...People who used to feel reasonably well off now feel poor...
...We need to shrink Washington's bloated influence sector, which drives up prices, corrupts the political process, erects a moat of affluence around the nation's capital, and makes everyone else—including members of Congress— feel deprived...
...Together these two moguls could pay the salaries for all the members of Congress and have $24 million left over...
...Carter's White House was full of people who had never seen the kind of money they were making in government...
...They were part of an era, as well as of a city...
...When spotting the bloated salaries of their peers, Americans seldom argue that others make too much but rather that they make too little...
...He was a character out of Mark Twain: boyish face and ample belly, his business dress a tee shirt and Bermuda shorts...
...What seems to have escaped notice is that the demand for a congressional pay raise is only one symptom of this much larger problem...
...Nothing is going to bring back AMO or Stone Soup, or the Xerox Man, for that matter...
...In any recounting of Washington misdoing, the clinching line is inevitably that "the taxpayers pay for it . " Yet these taxpayers also buy groceries and gas, employ doctors and lawyers, and thereby support the lobbying efforts of these groups, whether they agree with them or not...
...It could work as follows...
...A true libertarian, he had model guns on the walls and never tired of telling how he once apprehended a bank robber and won a commendation from the police...
...Michael Eisner, president of Walt Disney Inc., got $40.1 million dollars last year, including stock options...
...With the cheapest bulk rates around, it was a gathering place for the denizens of Washington's late-night public interest world...
...There could be reasonable rules for small businesses, retail establishments, and so on, so that the system could be workable and not overly burdensome...
...The sense of deprivation became especially bad during the Reagan years—which, not incidentally, is when the present pay raise push began...
...Questions of benefits and compensation hit close to home...
...There is no other major American market that comes even close to ours in terms of spendable incomes," concluded a report for the Greater Washington Research Center...
...On any given night out, it's the member of Congress and his spouse who have to watch the right column of the menu...
...At the height of his career, Michael Milken, Drexel Burnham's indicted junk bond wizard, made that much in 36 minutes...
...Nobody asks the nation's motorists whether they want to contribute to oil lobbyist Charles DiBona's salary of one-third of a million dollars, or to the $50 million annual budget he oversees on behalf of the nation's oil companies, not consumers...
...A house in Washington may cost a fortune, but when it's sold, it yields an even bigger one—especially if it was purchased years ago...
...No longer viewing Congress as a temporary break from a law practice back home, they assess their prospects primarily in Washington terms...
...A survey of trade association heads by the National Journal showed that, for all the heat they take, it's not members of Congress who are living high off Washington's hog...
...And the people they consider their peers—top lobbyists, lawyers, trade association heads—all make more money than they do...
...by Jonathan Rowe People knew him only as "The Xerox Man . " His office, on an upper floor of the old Dupont Circle Building, was open until 10:00 or 11:00 at night...
...Many have lamented the way PACs have corrupted the legislative process...
...The Adams Morgan Organization (AMO) led the battles against real estate speculators in the seventies...
...At some point, we have to ask whether the highest salaries are justified, not whether everyone else can match them...
...But don't shed tears about the housing costs of Congress...
...At Fried, Frank, and Harris, it was $560,000...
...At Skadden, Arps, a partner's share of the earnings in 1987 was $885,000, according to Washington's Legal Times...
...His number-two man, Frank G. Wells, got $32.1 million...
...Restaurants are so expensive in part because Congress said that lobbyists and businessmen could deduct their lunches...
...Smith defined a necessity as "whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without . " Marx wrote of the owner of a small house who finds a much larger one going up in the neighborhood, "The house shrinks from a little house to a hut . " In Washington, it's quite easy to feel as if you're in a hut these days...
...Or else take the free meal from the defense contractor...
...building featuring Duke Zeibert's power restaurant...
...The nation's capital has always been relatively well-off...
...It's true that Reps...
...Of course, it's not just congressmen who have to contend with those price levels—bureaucrats and Xerox service reps do too...
...It took 10 years for Jim Wright to bring in the $150,000 or so he stood accused of taking from his friend George Mallick...
...Average household income, after tax, is more than $47,000 a year, 42 percent above the nation as a whole...
...Housing costs a fortune in part because the unlimited mortgage interest deduction makes it such an attractive investment...
...Washington used to be that way...
...Washington doesn't have the monumental peaks of wealth of a Los Angeles or a New York...
...Jack Anderson and Patrick Buchanan get $10,000 per speech...
...Consider "honoraria," the politely named envelopes of cash that members get for showing up at industry events and imparting wisdom that could have been gleaned from The Washington Post for 25 cents...
...It has made Washington a very expensive place...
...We have no say in the matter at all...
...But it's important that there be places in Washington for such endeavors to begin...
...Under present laws, manufacturers must list the material ingredients of their products, so that customers know what they are putting into their bodies...
...There is much to be said for letting people pay for what they are willing to pay for," wrote columnist Henry Mitchell in The Washington Post, in defense of honoraria for reporters, "and to let people gobble up all the cash they can...
...What's different is that members of Congress come to Washington expecting to find themselves near the top of the heap...
...A real estate development firm called George Washington University has since torn it down...
...This has got to be the most affluent clientele we see anywhere," the president of Kay Jewelers told The Washington Post...
...Abolish the Lobbyist Maintenance Tax...
...The Xerox Man isn't there any more...
...What we need now is a way for the voters to restore some perspective to the rest of the city, which is where Washington's salary bloat is most insidious...
...The Sholl's at Vermont Avenue and K Street is now Les Gals...
...senator...
...Trade associations have such large staffs in part because Congress, with its own large staffs, provides plenty of people for the lobbyists to talk to...
...And Jack Valenti of the Motion Picture Association gets $660,000...
...Asked to disclose these payments, some journalists have reacted like a congressman caught taking a secret loan from a Texas S&L...
...In Washington that point has come...
...Safire's tower Even reporters make more than congressmen these days...
...My own personal business," said James J. Kilpatrick, who had written previously that it "smells to high heaven" when Congress takes such fees...
...Developers are greedily eyeing old neighborhood shopping areas along Connecticut and Wisconsin Avenues, and no one is safe from their highrise schemes...
...If a journalist has lost contact with reality it's doubtful that an $18,000 speech to a well-heeled business lobby will restore it...
...Not any more...
...The average American worker, earning just under $21,000, couldn't understand why the politicians couldn't live on more than four times that much...
...He seems to have drifted off into the night, along with the Washington he was part of...
...This would include the lobby groups that customers are supporting through their purchases, the amount of this support, and the main issues on which these groups have worked over the past three years...
...It would also include a list of PACs they have supported and of members of Congress to whom these PACs gave money...
...He loved to give indignant, jailhouse-lawyer disquisitions on the antisolicitation laws and the Mann Act and why the cops couldn't touch him...
...A few blocks down Connecticut Avenue, where impecunious Washingtonians once dined at Sholl's cafeteria, limousines now wait outside a palatial new Jonathan Rowe is a contributing editor of The Washington Monthly...
...Virtually every toney store in America has opened a D.C...
...On the package or label, and in literature available at the point of sale, companies would list the amount of money they—and their unions—expend on political activities, including PACs...
...branch in recent years...
...High rents tend to exclude anything not already established—that is, the future—in politics as in business, in Washington as in any other city...
...When Detroit's auto factories slow down, and Texas oil prices fall, the affected corporations often spend all the more in Washington to get relief...
...The cheap rooming houses and apartments in the West End have yielded to luxury hotels...
...Most Americans see no reason to feel sorry for people who make $89,500 a year, plus generous pension and medical plans, plus subsidized meals, WATS lines, free postal service, a health club, and a tax-free discount store euphemistically called the "House Stationery Store . " Still, buried in the pay raise fight was a real problem: It's not that members of Congress are paid too little but that the rest of Washington is paid too much...
...The activism of the sixties took root here in part because it was the kind of city that could foster it...
...William Safire gets $18,000...
...households own corporate stock...
...Citizens who come to Washington to petition their government can't afford a hotel...
...Fortunately, the voters are around to restore some perspective to the congressional mind...
...PACs exist because Congress says they can...
...But the battle over the recently proposed pay raise showed that, in at least one respect, the Beltway mentality is undeniably real...
...Political content labeling would inform customers what their purchases put into the body politic...
...Washingtonians have a warped perspective on what it means to have enough...
...Even Karl Marx and Adam Smith agreed on this...
...But AMO's shabby old storefront has been swallowed up by the restaurant row...
...Unlike the wealth of most other cities, Washington's affluence practically never flags...
...At any cocktail party in Georgetown or McLean, the member of Congress is likely to be the lowest paid...
...There were hustles in every drawer...
...The reason there is so much opposition to closing the slightest tax loophole is not that the industry in question would face ruin without it...
...Before World War II, it had more cars per person and a higher average income than any place in the country...
...The three telephones were constantly ringing...
...Dan Rostenkowski, Stephen Solarz, and other members of Congress elected before 1980 do get to keep whatever's left over in their campaign chests when they retire—sums that can reach upwards of $1 million...
...This is nothing, moreover, compared to the relative deprivation members of Congress might feel when they look at the larger business world...
...But in recent years, the riches have become positively gaudy...
...Even corporate CEOs are subject to this...
...In a subsidy that rivals the perversities of the Internal Revenue Code, District hotels offer special corporate rates...
...Reagan's crowd, by contrast, hadn't seen so little for a very long time...
...But the invasion of high-paid corporate lobbyists has had another, more insidious, effect...
...Joseph D. Williams, head of Warner Lambert, commented on his $6.4 million salary: "In the scheme of what goes on in this world, it's a very little bit of money . " This kind of thinking is a treadmill to bankruptcy if ever there was one...
...Chamber of Commerce...
...All the money floating around Washington has made prices very high...
Vol. 21 • July 1989 • No. 6
