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5 Financial Perks of Congress You Won't Believe Are Legal

By Brian Reed
November 11, 2011 3

While their approval rating may be at some of the lowest levels ever, it's financially a good time to be a member of Congress.

Lawmakers' $174,000 annual salary is more than three times the average American's median income ($49,909), and the retirement and health benefits are generous -- members are fully vested after only five years of service and eligible for pension at age 50.

[And they're getting rich from their positions, too: The 5 Wealthiest Members of Congress]

But the perks don't stop there. In fact, some of them are considered borderline criminal.


Political Perk #1: Congress Nearly Gets Away With Insider Trading Every Day

Making trades based on non-public information is very illegal. Insider trading convictions come with severe fines (up to $5 million for each "willful" violation) and possible jail time.

Unless you're a member of Congress. There's absolutely nothing in the Securities and Exchange Commission Act that prevents lawmakers and federal employees from profiting on inside information they learn just doing their jobs.

Strangely enough, many representatives also outperform the average investor. A recent university study looked at stock transactions by 300 House representatives from 1985 to 2001 found they beat the performance of the stock market by about 6% annually. Senators outperformed other investor averages by nearly 12% annually. Representatives who invested frequently performed better than corporate insiders.

While not totally condemning, the numbers are certainly interesting. One of the study's researchers said, "We have every reason to believe they are trading on information that the rest of us don't have."

In 2006, Rep. Louise Slaughter (Dem -- N.Y.) introduced the Stop Trading on Congressional Knowledge (STOCK) Act, a bill that would hold members of Congress and federal employees to the same insider trading standards as everyone else.

The bill was re-introduced in 2007, 2009, and most recently, March 2011. It hasn't been heard from since.

Political Perk #2: Great Tax Breaks and Bonuses

Since Congress writes and approves the tax code, it's not surprising that they wrote in a few bonuses for themselves.

Members of Congress are able to deduct $3,000 from their annual income tax for any expenses incurred outside of their home state or district.

Additionally, all the of the perks given to the members of Congress-- including free parking at the office and D.C. airports, child daycare, free meals at the legislative dining hall, and cheap membership to the house gym -- are tax free.

And the perks don't stop when they retire: In addition to free health benefits and a generous pension, former members of Congress can send mail for free, courtesy of the U.S. taxpayer.

Additionally, campaign funds can be spent on meals and entertainment for constituents, as well as travel, anytime of the year, whether in session or not.

[See some of the tax breaks YOU could receive next year: 2012 Tax Law Changes Affecting Your 401(k) and IRA]


Political Perk #3: Free Travel and Trips

Want to take a "fact finding" trip to France? Not a problem if you are a member of Congress, so long as it's "business" related. Just join a committee and chances are you will need to carry out one of these strictly-business-trips overseas at least once.

Last year, the Congressional Research Council found that it is nearly impossible for the public to find out which Congressional members make trips and where they go. What's more, current laws don't impose any spending limits on these government trips. The U.S. Treasury simply refills the travel funds on an "as-needed" basis.

Additionally, Congress members get to travel between D.C. and their home district for free as often as they like.

[InvestingAnswers Feature: 6 Projects You Won't Believe the Government is Funding]

Political Perk #4: Almost Half the Year Off for Vacation

When all that trip-taking wears them down, members of Congress can always fall back on their vacation time. Out of 260 working days in a year, Congress only works 137 of them.

In the first 42 weeks of this year, Congress members worked an average of 2.67 days per week. Amazingly, that's actually a better attendance rate than usual -- the last two years, our legislative branch only worked 111 days.

Political Perk #5: They Can Vote For Their Own Pay Raise

Can you imagine a workplace where the employees could choose to give themselves a raise, regardless of the financial shape of the place they work for, the current economic climate or even their own job performance?

That's how it works for members of Congress. They don't have to prove to a boss that they deserve a higher salary; they only need to convince one another that it is a good idea. Then they all vote on it.

Since the "Congressional cost-of-living adjustment (COLA)" rule was enacted in 1990, Congress has accepted an annual raise 13 times. Every year, the rule automatically increases congressional salaries in accordance to price indexes. In fact, the only time representatives don't get a raise is if they vote against it, which they did for 2010 and 2011.


The Investing Answer: If these perks tell you anything, it's that being a member of Congress has far more of an upside than simply just power, prestige and mass influence on laws. Unfortunately, it comes at the expense of taxpayers and that's no laughing matter. Be sure you understand the policies your representative stands for and vote to make sure your voice is heard.

this is one of many reasons people are out on the streets protesting.

Our system is so out of wack its allmost going to take a revelution to change it.

And the ***** of it all is the SCOTUS has ruled that the American people have no say in any of this, that congress is the supreme power 2nd to the SCOTUS!

This the reason for term limits. Serving in congress should not be a career.

I'm surprised there has been so few comments on this

Think people!!!!! These are the people who are supposed to be protecting OUR rights, not spending all their time (what little they do spend) finding ways to rob us!

OCCUPY CONGRESS!

in which case has scotus ruled "that congress is the supreme power 2nd to scotus"?

https://www8.georgetown.edu/centers/cndls/applications/posterTool/index.cfm?fuseaction=poster.display&posterID=1714

Crony capitalism exposed


By Marc A. Thiessen, Published: November 14


Insider trading is illegal — except for members of Congress. A Wall Street executive who buys or sells stock based on insider information would face a Securities and Exchange Commission investigation and quite possibly a federal prosecutor. But senators and congressmen are free to legally trade stock based on nonpublic information they have obtained through their official positions as elected officials — and they do so on a regular basis.

On Sunday night, CBS News’ “60 Minutes” looked into this form of “lawful graft.”The “60 Minutes” story exposed, among others, then-House Speaker Nancy Pelosi for participating in a lucrative initial public offering from Visa in 2008 that was not available to the general public, just as a troublesome piece of legislation that would have hurt credit card companies began making its way through the House (the bill never made it to the floor). And it showed how during the 2008 financial crisis, Rep. Spencer Bachus (R-Ala.) — then-ranking Republican on the House Financial Services Committee — aggressively bought stock options based on apocalyptic briefings he had received the day before from Federal Reserve Chairman Ben Bernanke and Treasury Secretary Hank Paulson.


The report was based on an explosive new book by Peter Schweizer that will hit stores on Tuesday. It’s called “Throw Them All Out: How Politicians and Their Friends Get Rich off Insider Stock Tips, Land Deals, and Cronyism That Would Send the Rest of Us to Prison.” (Full disclosure: Schweizer is a close friend, a former White House colleague and my business partner in a speechwriting firm, Oval Office Writers.

The “60 Minutes” story only scratches the surface of what Schweizer has uncovered. For example, Bachus was not the only member of Congress trading on nonpublic information during the financial crisis. On Sept. 16, 2008, Schweizer writes, Paulson and Bernanke held a “terrifying” closed-door meeting with congressional leaders. “The next day Congressman Jim Moran, Democrat of Virginia, a member of the Appropriations Committee, dumped his shares in ninety different companies . . . [his] most active trading day of the year.”

Rep. Shelley Capito (R-W.Va.) and her husband “dumped between $100,000 and $250,000 in Citigroup stock the day after the briefing,” Schweizer writes, and “at least ten U.S. senators, including John Kerry, Sheldon Whitehouse, and Dick Durbin, traded stock or mutual funds related to the financial industry the following day.” Durbin, Schweizer says, “attended that September 16 briefing with Paulson and Bernanke. He sold off $73,715 in stock funds the next day. Following the next terrifying closed-door briefing, on September 18, he dumped another $42,000 in stock. By doing so, Durbin joined some colleagues in saving themselves from the sizable losses that less-connected investors would experience.” Some members even made gains on their trades, at a time when ordinary Americans without insider knowledge were seeing their life savings evaporate.


Schweizer also documents numerous examples of how members of Congress of both parties — including Pelosi, Senate Majority Leader Harry Reid and former House speaker Dennis Hastert — have used federal earmarks to enhance the value of their own real estate holdings. They have done so, Schweizer shows, by extending a light-rail mass transit line near their property, expanding an airport, cleaning up a nearby shoreline, building roads and bridges, and beautifying land and neighborhoods nearby — in each case “substantially increasing values and the net worth of our elected officials, courtesy of taxpayer money.”

Perhaps the most disturbing revelations come from Schweizer’s investigation into the Obama Energy Department and its infamous “green energy” loan guarantee and grant programs, a program Schweizer calls “the greatest — and most expensive — example of crony capitalism in American history.” The scandal surrounding Solyndra — the now-bankrupt, Obama-connected solar power company that received a federally guaranteed loan of $573 million — is well known. But Solyndra, Schweizer says, is only the tip of the iceberg.


According to his research, at least 10 members of President Obama’s campaign finance committee and more than a dozen of his campaign bundlers were big winners in getting tax dollars from these programs. One chart in the book details how the 10 finance committee members collectively raised $457,834, and were in turn approved for grants or loans of nearly $11.4 billion — quite a return on their investment.

In the loan-guarantee program alone, Schweizer writes, “$16.4 billion of the $20.5 billion in loans granted went to companies either run by or primarily owned by Obama financial backers — individuals who were bundlers, members of Obama’s National Finance Committee, or large donors to the Democratic Party.” That is a staggering 71 percent of the loan money.

Schweizer cites example after example of companies that received grants or loans and documents their financial connections to the Obama campaign and the Democratic Party. And he shows how “the [Energy] department’s loan and grant programs are run by partisans who were responsible for raising money during the Obama campaign from the same people who later came to seek government loans and grants.”

There is much, much more, which means that when Schweizer’s book hits stores Tuesday, heads in Washington are going to explode.

Im thinking that before they become politicians they are HUMAN. Im also thinking I dont know of one career field in the world that has managed to completely exclude dishonesty or greed,,,


I think it mostly works, although many things can improve

I think in a country of 'opportunity' where you can become a millionaire by releasing one or two sucky records , Im not gonna gripe too much about the congressmans salary relative to their responsibilities and job duties,,,

You didn't just say that, right? I had to read it wrong!

It's OK for politicians to pass laws that work against us, cost us money and freedom, and make money illegally while doing it? You condone their greed because you think they deserve it?

Tell me ONE thing they have accomplished that works for "we the people" in the last....10-15 years or so!

OK, they gave us bailouts for bankers, the patriot act (and all the freedom to commit crimes against us without warrants, due process, or evidence, it contains), deregulation, Obamacare, Iraq, Afganistan, Libya... and all the other wonderful things they have accomplished!

They are better than us, so they deserve better, and so if they want it they can take it, and it's OK with you?

Sorry msH, I usually appreciate your voice of reason on most issues, but on this one I must STRONGLY disagree!
And we must not forget.... that corporations are NOW people too!

yeah, you read it wrong,,lol

I dont condone greed or criminality, but I dont expect any area of life where humans are involved to be completely free from those very things

where people are guilty of crimes or greed, why not prove those instances and persecute those people

lumping all in one boat, doesnt work quite as well as holding people to personal responsibility though, when it comes to greed


I dont believe anyone to be 'better' than anyone else, but I do try to look at things objectively and in relation to the big picture

if lawyers, ceos, doctors, and other professions are worth the big salaries,, why not the politicians who likewise have huge responsibility for others lives?

I don't disagree with "attaining wealth", or capitalism in it's true form. But the article is about the "sins" of Congress againt the American people.

The OP showed their abuse of power for their own prosperity, while the people suffer without the same benefits of that power, which we pay them for!

That's like working for a publisher, but selling your articles to someone else with a bigger wallet!