March 22, 1977
Page 8592
Mr. MUSKIE. Mr. President, all I want to do is very briefly remind Senators, some of whom may not have been on the floor earlier, what this amendment would do and why.
What this amendment would do would be to apply to all income, earned and unearned, the same 15 percent limitations as the committee resolution would apply to earned income, particularly income earned from lecture fees.
With respect to unearned income, however, the mechanism is different than it is with earned income.
What would be required of Senators with income-producing assets is that they put those assets in trust under the complete control of a trustee. Their enjoyment of the income of the trust would be limited to 15 percent of their basic senate salary, to the same extent that earned income would be limited.
There are differences, however, which take the discipline less restrictive with respect to unearned income, even with those limitations.
For example, income in excess of 15 percent would not be divested. It would simply be deferred. The Senator's enjoyment of the income would be deferred until the end of his Senate term.
Second, the amendment provides for three points of flexibility over the Senator's unearned income.
One, they could use income from the trust in excess of the 15 percent to pay income taxes on their income from whatever source.
Second, because of the Supreme Court decision last year on the use of personal funds for political campaigning, this amendment provides that funds may be used in excess of the 15 percent for that purpose which the Court says is mandated by the Constitution.
Finally, the amendment provides that income in excess of the 15 percent would be available for unforeseen personal circumstances. I suggest to my colleagues that is the kind of flexibility the committee resolution does not provide for earned income. But we do understand, those of us who sponsored this amendment, that any Senator can be hit by some unforeseen personal circumstances that ought to be taken into account with respect to restrictions on his income.
I take the view that ought to apply to those of us on earned income. Suppose we had a catastrophic illness in our family. What is wrong, may I ask, with going out on the lecture circuit and making a couple of speeches to a conflict-free audience for the purpose of meeting that emergency?
The committee recognizes no such emergency with respect to earned income, but my amendment does with respect to earned income, but my amendment does with respect to unearned income.
The whole purpose of this amendment is to treat all income, all outside income of Senators, the same.
This is not my idea of the right kind of discipline. The committee says it is with respect to some income, and I am willing to live with the restriction, as I am sure most Senators are, if it applies to all of us.
Mr. President, I have put in the RECORD today several editorial and newspaper columns or comments favorable to the point of view which I have been laboring to persuade the Senate on for several days.
The most recent that has come to my attention is the Wall Street Journal of today, which supports not my first amendment, unfortunately, but the second. The interesting thing is the philosophy in the column, the logic of this
The PRESIDING OFFICER. All time on the amendment has expired.
Mr. MUSKIE. Then I will postpone reading that until we get to my second amendment.
I think we have talked the subject out, I am ready to vote, and I yield whatever time I have.
Mr. NELSON. Mr. President, have the yeas and nays been ordered?
The PRESIDING OFFICER. The yeas and nays have not been ordered.
Mr. NELSON. I ask for the yeas and nays.
The PRESIDING OFFICER. Is there a sufficient second? There is a sufficient second.
The yeas and nays were ordered.
The PRESIDING OFFICER. The question is on agreeing to the amendment (No. 93) of the Senator from Maine. On this question the yeas and nays have been ordered, and the clerk will call the roll.
The assistant legislative clerk called the roll.
The result was announced — yeas 29, nays 67, as follows:
[Roll call vote tally omitted]
So Mr. MUSKIE's amendment (No. 93) was rejected.
Mr. CRANSTON. Mr. President, I move to reconsider the vote by which the amendment was rejected.
Mr. THURMOND. I move to lay that motion on the table.
The motion to lay oh the table was agreed to.
AMENDMENT NO. 92
Mr. MUSKIE. Mr. President, I yield myself 5 minutes and I hope I might have the attention of my colleagues.
The PRESIDING OFFICER (Mr. ZORINSKY) . Will the Senator allow the amendment to be reported?
Mr. MUSKIE. Mr. President, what is the pending business?
The PRESIDING OFFICER. The clerk will state the amendment.
The assistant legislative clerk read as follows:
The Senator from Maine (Mr. MUSKIE), for himself and others, proposes amendment No. 92.
The amendment is as follows:
On page 24, beginning with line 13, strike out all through line 24 on page 26.
Renumber proposed rules XLV through L (and cross references thereto) as XLIV through XLIX, respectively.
Mr. MUSKIE. Mr. President, I yield myself 5 minutes.
Mr. President, 67 Senators, if I heard the vote correctly, have just said in unmistakable terms that a limit of 15 percent on outside earned income is inequitable, unjust, and unjustified.
I would expect if those 67 Senators mean what they just said, not just as a matter of serving their own interests but in terms of wise and just public policy, those 67 will vote for this next amendment because that is exactly what this next amendment says with respect to all outside income, with one qualification that exists in current law. Under current law lecture fees are limited to $2,000 per lecture and $25,000 overall. So even with this next amendment earned income is subjected to more restrictive limitations than the unearned income which 67 Senators just voted to protect.
This vote also indicates probably that those of us in the group I am seeking to protect, including myself, are in a minority in this body. So the interesting question is whether or not the Senate will vote to protect the interests of a minority of Senators as well as the interests of a majority of Senators.
In the course of the day I have put into the RECORD many, many comments that are appearing in the press with respect to this issue.
I would like to call the Senate's attention to one that appeared in today's Wall Street Journal, a publication with which I do not find myself in very frequent agreement.
This is what the Wall Street Journal says with respect to the current situation, the committee resolution that limits earned income in the Senate vote.
Mr. NELSON. Mr. President, may we have order so that the Senate can hear the Senator?
The PRESIDING OFFICER. The Senate will be in order. Will Senators desiring to converse please adjourn to the cloakroom?
Mr. MUSKIE. So the Wall Street Journal has this to say about the current situation, which is a committee resolution that limits outside earned income and a Senate vote against limiting unearned income. This is what the Journal says:
The logic of this, we are told, is that a Senator is more likely to corrupt himself for a $1,000 fee than to protect his $250,000 investment in International Widgits. For a welcome change we find ourselves on the side of Senator Edmund Muskie of Maine, who wants no ceiling on outside income. We will trust the voters to decide at the polls whether or not they think their representation in Washington is suffering because of the outside activities of Senators and Congressmen.
I ask unanimous consent that the editorial be printed in the RECORD.
There being no objection, the editorial was ordered to be printed in the RECORD, as follows:
THE MOST EXPENSIVE LOOPHOLE
The debate continues in our nation's capital on what kind of limits Congress should impose on the outside earnings of its members. We would like to point out why it cannot be done at all.
The House has passed a bill that would only permit a member $7,500 in outside "earned" income, above the congressional salary of $57,500. The majority of House members, after all, have neither the time nor the market power to earn more than $7,500 a year in speaking fees. But because most of them earn much more than that each year on stocks, bonds and real estate, they voted not to limit such earnings at all.
In the Senate, it is a similar story. The millionaire Senators, such as Edward Kennedy and Jacob Javits, are in such high tax brackets because of their investment income that it doesn't pay them to make a speech for a fee, since the federal and local governments confiscate most of it in income taxes. So they are quite prepared to be righteous and ethical and, like the House, limit outside earned income to $8,625, but do nothing about unearned income.
These limousine liberals have rationalized all this by saying it is obvious that speaking fees come directly from lobbies, and are thus influential. The source and influence of unearned income is "usually slight and remote," according to one line of reasoning. The logic of this, we are told, is that a Senator is more likely to corrupt himself for a $1,000 fee than to protect his $250,000 investment in International Widget.
For a welcome change, we find ourselves on the side of Sen. Edmund Muskie of Maine, who wants no ceiling on outside income. We will trust the voters to decide at the polls whether or not they think their representation in Washington is suffering because of the outside activities of Senators and Congressmen.
Even if Senators and Congressmen stopped up a few loopholes there would be others left unstopped. One that we wonder about, for example, is the capital gains lawmakers enjoy on the appreciation of their homes in the Washington metropolitan area. Given the tightness in the supply of classy housing near the federal triangle, all Congress has to do to send prices up is create another agency or expand the supergrades in the bureaucracy.
What with all the added demand, houses that once cost Congressmen or bureaucrats $25,000 are pushing upwards past $80,000. When we stop to think about it, this may be the most expensive loophole of all. It probably costs the taxpayers $10 million or more to add $1,000 to the net worth of a Congressman in this fashion. And we do not believe for a moment that members of Congress and the gilt-edge bureaucracy are unaware of what is happening. So much for ethics.
Mr. MUSKIE. Mr. President, in the course of 2 days, may I say to my colleagues, I have undertaken every effort at my command to elicit the justification for this discrimination between earned and unearned income, and the justification comes down to three points:
No. 1, public unhappiness with congressional ethics. That is a legitimate point. But all the evidence indicates the public does not focus on lecture fees as its only target of displeasure.
My good friend, the Senator from Missouri (Mr. EAGLETON) , yesterday went through a catalog of public unhappiness with the Senate.
The PRESIDING OFFICER. The time of the Senator from Maine has expired.
Mr. MUSKIE. Five additional minutes. Not one related to lecture fees. Not one, and I reread the Senator's colloquy in the RECORD this morning.
The Lou Harris poll, to which reference has been made here, had a question, it is true, with respect to lecture fees, but I think there were 15 questions in all covering a range of public criticism of congressional behavior with respect to investment income, among others.
But the committee applies divestiture only with respect to lecture fees. Public unhappiness with congressional ethics, if it is a legitimate ground for limiting outside lecture fees, is a legitimate ground for limiting all outside income, and 67 Members of the Senate have just said no to that proposition. They have just said no. If no is the answer with respect to unearned income, it ought to be the answer, in all equity, to earned income.
The second test applies to the second element of justification. There is a risk that lecturing will take time away from Senate duties. I have spent 2 days putting my record in that respect into the RECORD. In the last 4 years I missed 4 days of a Senate session in 1 year because of lecture commitments, 4 days out of over 180; and the next 3 years I never missed more than 2 days out of the days the Senate was in session.
I remind our colleagues that I earned close to the limit on lecture fees. Last year I delivered 19, that is one every 19 days. And this committee says to me, "That is too much time to devote to your interests." If it is too much time, then I ask my colleagues how much less time do Senators enjoying unearned income spend on their investment portfolios, or on their family farms, or on their real estate ventures, or their oil and gas leases? How much less time do they spend on those than I spend earning whatever outside income I get? They just said that is no problem; 67 of them have just paid that is no problem with respect to unearned income.
I say it is as much a problem with unearned income as with earned, and if their answer is no, as it has been, with respect to unearned income, it should be no with respect to earned income.
And then the third reason is the high risk of conflicts of interest.
I have been a target in this Chamber for 3 days because I said some things that Senators, and especially those on the committee, have found very uncomfortable. I have not heard anyone suggest yet that I have abused the public interest on the conflict of interest side. I suspect I could go over my 18 years on the lecture circuit and find some that I wish I had not made because of the appearance of conflicts, but I made a conscientious effort, a deliberative effort to avoid them, and I am not one to stand here and say there is no risk of conflict of interest with respect to lecture fees. But as to what kind of outside income is there no risk?
I put into the RECORD this morning a column by Walter Pincus in which he simply reviewed some of the outside interests of Senators who have voluntarily disclosed over recent years. Look that list over. Real estate ventures, land development partnerships, oil and gas leases, radio stations. I am not one to say that any one of the colleagues whose names are mentioned in that story was guilty at any time of a conflict of interest. But the test that has been applied to us is the risk, and if risk alone is enough to say you limit earned income, then it is enough to say you limit unearned income. I mean, what kind of a place has this become?
What kind of a place is it? When I came into politics, I made a deliberate decision to avoid the temptation of speculative investments, to close my law office, and to go on the lecture circuit because I regarded it on an historical basis as an honorable way to earn outside income. And now this committee tells me I made a mistake.
The PRESIDING OFFICER. The additional 5 minutes have expired.
Mr. MUSKIE. I yield myself 5 additional minutes.
I made a mistake when I sold my home the first year I was Governor. I should have used the proceeds to find a promising investment opportunity, however speculative, knowing that however speculative it might be I could find sponsorship that could reduce the risks of speculation, and Senators all know what I am talking about.
I deliberately did not.
That is not to criticize those who have investments, but then I arrive at this point in my Senate career, the 19th year, and I am told, "ED MUSKIE, that day you made a decision to avoid conflicts of interest, if only you had known how wrong you were, you were getting into the most conflict of interest prone activity that the Senate of the United States in 1977 could imagine."
That is what the committee is saying: that the lecture circuit is the most conflict of interest prone of any source of income. And they have not made their case.
The committee says in its report it did not have the time to conduct hearings or a survey to get the facts. No, they are going to correct the abuses the media has exposed; they are going to hang us in the press.
I hope this place is not what it seems to be, because if I detect the trend correctly it does not really matter what restrictions this imposes on me. I am not going to be around that much longer. But I can see future Senates made up of two groups of people: The very rich, who can afford to do anything they want, and maybe others who cannot do as well financially as with a Senate salary. For all those in between who have the talent, the drive, the energy to make a success of themselves in whatever form of activity they choose, from farming to practicing law, to engaging in any business, to engaging on the lecture circuit — and that is available outside the Senate of the United States — those people with special talents, skills, and energy—
The PRESIDING OFFICER. The Senator's 15 minutes have expired.
Mr. MUSKIE. Mr. President, 2 additional minutes. What are they likely to do?
The PRESIDING OFFICER. The Senator has made a unanimous consent agreement not to take any more time until the last 15 minutes in the debate.
Mr. MUSKIE. Maybe this is a good time to sit down. I will wait until the last 15 minutes.
Mr. JAVITS. Mr. President, I would like to ask, who has control of the time on this amendment?
The PRESIDING OFFICER. The Senator from Wisconsin has control of the time.
Mr. JAVITS. Will the Senator yield 3 minutes?
Mr. NELSON. The majority leader asked for 15 minutes, I need 4 minutes and the minority leader has asked for 2 minutes. Where does that leave us? The Senator wants 3 minutes to ask a question?
Mr. JAVITS. Yes.
Mr. NELSON. I will yield this time but I cannot yield any more from our side.
Mr. JAVITS. Mr. President, I am inclined to be with the Senator on this point. I believe all of his arguments are pointed to this amendment and not the previous amendment. But this makes sense. I would like to be sure all Members understand what he is doing.
One, the Senator will leave the $25,000 and $2,000 per speech limitation; correct?
Mr. MUSKIE. That is correct. I do not believe we could change it if we wanted to.
Mr. JAVITS. In any case, the Senator will leave it.
2 Mr. MUSKIE. I leave it.
Mr. JAVITS. Second, the Senator will leave everything here about conflict of interest, so if a Senator accepted $50 for a speech and it was something that was nefarious, the Ethics Committee can haul him up and accuse him of it; correct?
Mr. MUSKIE. That is correct.
Mr. JAVITS. And last, and also very importantly, the Senator makes no change in the limitations on the professional services which Members may render, which is found at page 28, line 16 to line 19. That is, a Senator may not, to earn anything, act as an engineer, a real estate agent, an insurance agent, an attorney, a physician, an architect, a consultant, or activities of a similar character. Is that correct?
Mr. MUSKIE. The Senator is correct.
Mr. JAVITS. So the Senator is definitely on the question of honoraria. I think there he is dealing with a problem de minimis. It is true the other body went to 15 percent. There is nothing magic about that figure. One of the things that happens here, because of the position we occupy, is that we have more such opportunities and we are more in demand. The Senator would leave that opportunity for two reasons: One, to afford some opportunity for outside earnings for people who want to represent the big States where it costs a lot of money out of a Senate salary — and I have experienced it for years and, second, and very importantly, to give a Senator freedom to bring his message to the people of our country.
Mr. MUSKIE. The Senator is correct.
Mr. JAVITS. I thank my colleague.
The PRESIDING OFFICER. The Senator from Wisconsin.
Mr. NELSON. Mr. President, I yield myself 5 minutes.
Mr. President, we went through this question backward and forward on Friday, into Friday evening, yesterday, and today, and anything that will be said from now on will be repetitious, just as the argument just made by the Senator from Maine was.
I might say, in listening to the Senator from Maine: He has done a magnificent job of destroying at least one straw man every hour. I have never seen such originality before in my life. And he has refuted every hour at least one argument that nobody is making.
We gave the Senator from Maine the last 15 minutes to speak, a very unusual unanimous consent agreement. We did it out of good grace, good will, friendliness to the Senator from Maine.
Mr. MUSKIE. And perhaps out of agreement. [Laughter.]
Mr. NELSON. And we did it, too, out of compassion for the weakness of the Senator's case. We thought he ought to have the last word. [Laughter.]
I am not unmindful of the risks we took by allowing the eloquent Senator from Maine to speak last.
I know, we know, everybody knows his great capacity through his eloquence to make a bad case sound like a religious crusade against inequity and injustice. I have never heard anything like it.
Well, when he makes his closing remarks, as Senators watch his virtuoso performances, the music will be beautiful, absolutely beautiful. But I urge Senators to pay attention to the lyrics. The lyrics do not make any sense.
Last Friday night here in the Chamber we were entertained by a magnificent virtuoso performance. We were treated to everything from a soft shoe dance to a Nijinsky ballet. It was marvelous. And the music was superb, too.
Mr. MUSKIE. But does the Senator think that kind of a performance is worth some money? [Laughter and applause.]
Mr. NELSON. Yes.
The PRESIDING OFFICER. Let us have order in the Chamber.