THE CONGRESS: They Are Paying the Price of Virtue

I think if the members of this body were to take the vows of poverty, abolish our offices, abandon our homes and pitch pup tents on the Capitol lawn, we’d still be criticized for something—maybe for walking on the grass.

—House Democratic Leader Jim Wright

The Texas Congressman’s wry complaint, offered in support of the toughest financial code of ethics ever imposed on a U.S. legislative body, was exaggerated, but based on reality. Rocked by scandals involving sex and bribes, and widely assailed for accepting a pay raise without facing up to a vote on it, the post-Watergate Congress is in trouble with its constituents. In the most recent Harris survey of public attitudes toward the leaders of 10 national institutions, members of Congress ranked eighth in esteem (liked even less: corporation executives and labor bosses).

Thus there was great pressure on the House last week as it considered a proposal from a special congressional commission, appointed last year by then Speaker Carl Albert, to limit the Representatives’ outside income and require public disclosure of all income sources and most large debts. The members had been stung by the angry letters and editorials about their recent pay hike from $44,600 to $57,500. Proposed by the Ford Administration and supported by President Carter, it went into effect automatically on February 20 because Congress made no attempt to block it. This procedure had been set up precisely to avoid a situation under which Congress would directly be raising its own pay—but the lack of a vote angered the public as much as a vote might have.

The Tulsa World assailed “the gutless way the pay raise was done.” Mayor David Burrell of Watonga, Okla., asked residents of his city to fly their flags at half-staff to mourn the “pay-raise ripoff’ that Congress “had snuck through.” Complained Malcolm Johnson, editor of the Tallahassee Democrat: “You can’t find out who did it.”

The voteless pay raise was part of a carrot-and-stick deal carefully engineered by House Speaker Tip O’Neill. With justification—the Peterson Commission cited the need for such raises early this year—he figured that members of Congress deserved their first significant salary increase since 1969 to try to catch up with inflation. But he was convinced the raise would have been voted down if each legislator had been forced to take a public stand on it. So O’Neill pledged to link the pay raise with something he felt Congress needed even more: a code of ethics. This would seek to change the public perception that members of Congress devote less than full time to their jobs and pick up a lot of money from special interests in the form of generous speaking honorariums, lawyer’s fees, gifts to secret office slush funds and occasionally outright graft and fraud.

O’Neill’s Gamble. As the ethics showdown arrived last week, O’Neill took the gamble of basing his personal prestige as the new Speaker on the outcome. The crucial vote was on the Democratic leadership’s plan to restrict amendments to the code; only outright deletions of provisions would be permitted. Opening the many proposals in the plan to unlimited modification might well have doomed the whole project. A worrisome 84 Democrats had signaled that they might vote against limiting amendments. Republicans almost unanimously favored an “open rule,” under which each proposal could be altered. But as the Democratic leaders passed the urgent word—”We’ve got to protect Tip on this”—the troops fell in line; only 15 Democrats strayed.

The emotional debate on the code began Wednesday afternoon before packed galleries. It continued into the evening as members freely booed and cheered the arguments. This was a highly personal issue on which their style of living was at stake—the hottest fight being over a provision to limit outside earnings in a year to 15% of a Congressman’s salary: $8,625. This would apply to income from making speeches, salaries from any other job, legal fees—but not to income from a family business, a farm, writing books or from stocks and bonds. To many that seemed unfair, but Wisconsin Congressman David Obey, who headed the commission that produced the package, argued that the code was not designed to equalize all members’ incomes, but simply to limit their involvement in nonlegislative business.

Yet it would surely affect the annual incomes of some of the 108 Congressmen who reported receiving speech honorariums last year and, more severely, the 55 lawyers making more than $1,000 in outside law practice. Democrat Claude Pepper of Florida, for example, told colleagues that he earns more than $100,000 a year from his law firm. Chicago Democrat Morgan Murphy revealed that he gets $60,000 as an attorney—and hinted he might have to quit Congress if the restrictions passed.

During the stormy debate, Tennessee Republican James Quillen contended that to restrict income would amount to “an amendment to the Constitution” and “strike directly at the American free-enterprise system.” New York Democrat Otis Pike, who has a large undisclosed income from a hospital corporation, protested obliquely: “I would like nothing better than to be rich enough to be deemed ethical by this distinguished body, but if we pass this legislation without amendment, I will be judged too unethical to stay here.”

But the code’s backers proved persuasive. Wright argued that public disclosure of finances may be considered “a voyeuristic invasion of privacy,” but “each of us knew this was a goldfish bowl when we entered it—and each of us entered it of our own accord.”

O’Neill himself finally entered the fray. Limiting outside income was “the heart and soul of this entire package,” he argued. His voice rising, O’Neill warned: “This issue is credibility, restoring public confidence in this Congress as an institution, restoring confidence in the membership.” That clinched it. The limitation was approved by a surprising margin, 344 to 79. The entire code was approved, 402 to 22.

Beyond restricting outside earned income, the code also prohibits:

1) acceptance of any gifts valued at $100 or more from anyone having an interest in legislation;

2) the use of committee funds for foreign travel by members defeated for re-election (a frequent practice in recent years);

3) mass mailings under franking privileges within 60 days of an election (this has been used to great political advantage by incumbents).

The code also rules out the apparently widespread practice of creating slush funds from unreported sources to meet various office expenses of members. However, it increases the personal expense allowance from $2,000 to $7,000 a year.

The disclosure provisions of the code are stringent. To be revealed are: the source and amount of any income more than $100; the source and value of gifts over $100, and transportation, food, lodging or entertainment valued at over $250; the general amount of any financial holdings worth $1,000 or more; any debt exceeding $2,500, except home mortgages; any transaction in securities or commodities exceeding $1,000.

The Senate is considering a nearly identical code, and is expected to pass it next week—although the anguish may be even greater in that chamber. Since the Senators are generally in more demand for speeches and those who are lawyers are often of more value to law firms, their outside income is often higher than that of House members. Senator Hubert Humphrey, .for example, earned $81,000 in speaking engagements in one year, George McGovern $80,000. (Humphrey has never been secretive about such benefits; a sign in his Waverly, Minn., home proclaims: THE HOUSE THAT WIND BUILT.) Yet the limitation is expected to pass. Explaining the prevailing sentiment, one supporter of the code said: “People who come to the Senate rich can’t be made poor. But people who come to the Senate poor shouldn’t leave rich.”

To be sure, the House and Senate codes will inflict some inequities on members, depending upon their sources of outside income. Lawyers who draw fees and salaries, for example, cannot convert their income to unrestricted stock holdings; Congressmen connected with corporations can. Indeed, the estimated 22 millionaires in the House will be unaffected, since their income is mainly in inherited wealth, farms, family companies and dividends.

Yet it is hard to argue that Senators and Representatives earning large outside salaries and fees are not either spending far too much of their time on business other than the public’s or getting paid far too much for these outside tasks because of the public positions they hold. Nor can much public sympathy be generated for the legislator who claims he cannot live on $57,500 a year, plus $8,625 in outside pay, plus the imposing array of financial perks that go with the job.