Politics & Policy

A Modest Proposal for ‘Draining the Swamp’

(Jim Young/Reuters)
Former elected officials should not be collecting lucrative salaries after they leave office.

In May 1996, Senate majority leader Bob Dole resigned his position to focus on his presidential race against Bill Clinton. His announcement’s most memorable line was that he now had “nowhere to go but the White House or home.”

Maybe his fellow senators knew better, but little did the American public think that what he meant by “home” was not some bungalow in Topeka, Wichita, or Overland Park, Kansas, but a cozy Washington, D.C., residence in the swank and storied Watergate apartment complex where he could unleash his rolodex to maximum personal enrichment for the next 20 years.

Which is not to pick on Bob Dole. He wasn’t the first or last prominent and powerful member of Congress to go the route of lobbying and consulting for companies who had until recently been his supplicants, cashing in on political connections to help his clients tilt the playing field in their direction. Other prominent members who have cashed in in recent years include Henry Waxman (D., Calif.), Bob Livingston (R., La.), and Mark Pryor (D., Ark.).

An analysis by The Atlantic shows how widespread the practice is, with one-quarter of congressmen retiring in 2016 and about half of those who retired in 2014 staying in Washington, D.C. According to left-wing group Public Citizen, between 1998 and 2004, more than 40 percent of departing House members and 50 percent of departing senators became lobbyists.

Meanwhile, companies curry favor with ex-presidents by making sure they’re handsomely paid for speaking engagements. The fees for these are not somuch compensation for their speeches themselves as a signal to future presidents and other elected officials that these firms are ready, willing, and able to assist with their post-retirement financial needs when they’re out of office.

And then there’s the mother of all postdated bribes: Netflix’s hiring of Barack and Michelle Obama to produce TV shows and films, with a payment that’s been described as in the “high eight figures.” Sure, maybe that’s what the media-production talents of the Obamas are worth. But it’s hard not to think that Netflix just gave them a gift in exchange for President Obama’s heavy-handed push for “net neutrality.”

Why would they do this despite the FCC’s reversal of net neutrality under President Trump? Because there’s no better way to signal to future presidents how generous Netflix can be with those who agree with them and have the power to change the rules back.

So here’s my suggestion: Once someone is elected to federal office — the House, Senate, or White House — they will get that office’s pay for life, guaranteed, plus inflation, no matter how soon they retire or how long they linger in office. However, all other income (except for withdrawals from previously accumulated retirement funds and Social Security) will be taxed at 100 percent.

No speech fees, no lobbying, no consulting, no corporate boards, no book deals, no film deals, no university positions. No other jobs, either. Basically, no nothing. Unless, of course, you just want to work as a labor of love, in which case be my guest.

Obviously, this is not a free-market proposal. And, to be clear up front, before the purist libertarian types sic their private police on me, I fully admit this idea is half-baked. I’m not even sure I support it myself — but I don’t think the downside would be significant.

The proposal would certainly eliminate former federal officeholders’ incentive to earn other income, to be “productive” citizens. But what is it that former politicians produce? To my eye, it looks like what they’re best at is collecting rent on their previous positions by finding ways to tilt the market away from freedom and toward a system rigged in favor of their clients, or collecting bribes through loopholes for having done so while in office.

Confiscating the private-sector pay of former elected officials may expand the size of the private-sector for the rest of us.

Sure, someday we may elect a politician to some federal office who, when she leaves office, is fully capable of starting a business having no connection to government favoritism, or running an investment firm that doesn’t depend on her previously accumulated political favors, or inventing a product or process that someone finds useful and is willing to pay for. Maybe one of these politicians will burn the midnight oil and come up with a great new app. And telling them the government will take everything extra they earn would eliminate their incentive to work and invest their time, energy, and money; there would no financial gain from legitimate private-sector endeavors. That would be the downside.

But think about the upside.

First, if you’re a talented individual with many years of highly productive (and compensated) private-sector work in front of you, you would end up staying in the private sector, waiting until an older age to make the transition to federal office. Or maybe, you would stick to state or local office, where you would maintain the option of returning to private employment.

Second, the policy would be a natural form of term limits. Once elected, your pay is guaranteed for life, so why bother running again and again, unless for higher office, if it has no effect on your pay?

Third, if you’re the kind of politician who runs for Congress to become a lobbyist later on — which seems to be a growing constituency in Washington, D.C. — you should be persuaded by the ban on other income not to run at all.

Are there ways around this ban? Sure. Although a spouse’s pay could also be taxed at a rate of 100 percent if the couple files jointly, politicians are conniving sorts by nature. They could start using grown children, in-laws, cousins, romantic partners, and friends as fronts. The proposal isn’t a silver bullet.

But we live in a world where the federal government wields enormous power, where the private-sector earnings of former officials reflect that power, and where the latter creates an incentive to generate more of the former. The goal of draining the swamp is laudable, but not for its own sake; it’s a means to shrink the government. Oddly, confiscating the private-sector pay of former elected officials may be one way to expand the size of the private-sector for the rest of us.

Robert Stein — Robert Stein is an economist for an asset-management firm and a former deputy assistant Treasury secretary for macroeconomic analysis.

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