Back in the early 80s, a group of Democratic legislators decided to room together to cut the cost of staying in Washington for the three nights or so per week that Congress is in session. The motley crew included Representative George Miller of California (owner of the blue-gray house in Southeast DC), Senators Dick Durbin and Chuck Schumer, future Defense Secretary and CIA chief Leon Panetta, and others. We can only imagine whose phone numbers they posted on the refrigerator in a house like that. Pizza delivery? Of course! Liquor guy? Oh yeah. Exterminator? Maybe not a bad idea . . . .
Visitors to the house could be forgiven for thinking they had mistakenly wandered onto the set of Animal House. The stove didn’t work, so the group lived mainly on Frosted Mini-Wheats. Durbin stopped making his bed when Bill Clinton was President. Schumer slept on a mattress in the living room, and his wife was so disgusted by the place she refused to stay with him. Still, the unconventional arrangement inspired news stories and even a TV series — Amazon’s Alpha House, starring John Goodman as one of four Republican Senators sharing a much cleaner house.
In 2014, Representative Miller retired after 40 years in Congress and sold the tenement fixer-upper. It seems ironic, then, that as Washington has become the most affluent city in America and home prices have climbed even higher, Congress gave up a tax break designed to make it easier to find a place to stay. From 1953 until 2017, lawmakers could deduct up to $3,000 per year for living expenses while they were away from their homes — but with last year’s Tax Cuts and Jobs Act, they gave up that deduction for themselves.
Writing off $3,000 may have been a sweet perk back in 1953, when Elizabeth II became Queen, Ian Fleming published his first James Bond novel, and Marilyn Monroe starred in Gentlemen Prefer Blondes. The average taxpayer earned $4,000 that year. The average car cost $1,650. And the gas to power the car cost just 20 cents a gallon. (Of course, there was no Facebook. Life is full of tradeoffs, right?)
Today, of course, $3,000 is a rounding error for most congresscritters. Their base salary is $174,000, which is enough by itself to put them in the top 3% or so of earners. But the average Representative’s net worth hovers around $1 million, and the average Senator is worth $3.2 million. Plenty are rich enough to essentially “buy” their seats. Longtime members can cash in for that much in a single year with cushy lobbying jobs after they leave — former Representative Billy Tauzin raked in over $19 million lobbying for drug companies in the five years after he gave up his seat.
Of course, those averages, by definition, include the 50% who are below average. Dozens of mostly-younger members sleep on futons or pull-out couches in their offices while they’re in DC. (They shower at the gym.) That group includes House Speaker Paul Ryan (net worth: $7.8 million), who earns an extra $49,500 as Speaker. Bunking at work can make far more sense than dropping a couple grand a month for an apartment when they’re only in town for 80 or 90 nights per year. (Durbin and Schumer paid about $800 for their squalid little spaces in Miller’s hovel.)
You may live by yourself in one of those fashionable new “tiny houses” or with a whole extended family in a mansion. Fortunately, you don’t have to score political points by giving up tax deductions. So why would you? Call us when you’re ready for a plan to pay less, and let’s see how much home you can buy with it!