Congressional outside income WITH the approach of the 96th Congress, returning members of the Illinois House delegation will be faced next month with one key change most of them don't particularly like — limits on outside earned income. In 1977, Congress enacted new ethics codes for itself. The codes limited income from such activities as real estate sales and law practices to 15 per cent of each member's congressional salary. At current salary of $57,500 per member, that translates to a figure of $8,625. The code, however, sets no limits on unearned income: dividends, interest and other investment benefits. When the code originally passed in 1977, there was quite a bit of under-the-table congressional grumbling. Rep. Morgan Murphy (D., 2nd District) led those members who were openly upset. With the House haunted by Korea-gate and a controversial pay raise, voting against ethics was almost unthinkable in 1977 or 1978. A September 1978 motion to repeal the 15 per cent limit failed dismally, 97-390. But if it had been up to the Illinois delegation, the outside income limit would have fallen. Twelve Illinoisans voted to repeal the limit, nine opposed repeal and three were absent. Illinois was the only large delegation to favor repeal. Favoring repeal of the income limit were Democrats Morgan Murphy, John Fary, Cardiss Collins, Daniel Rostenkowski, Martin Russo and Frank Annunzio and Republicans Henry Hyde, Philip Crane, John Erlenborn, Robert McClory, George O'Brien and Tom Railsback. Opposing repeal of the income limit were Democrats Ralph Metcalfe, Sidney Yates, Abner Mikva, Melvin Price and Paul Simon and Republicans Edward Derwinski, Edward Madigan, Paul Findley and Tom Cocoran. Republicans John Anderson and Robert Michel and Democrat George Shipley did not vote. A sampling of reasons given by Illinoisans for opposing the limits reveals explanations as varied as the ideological spread of the opponents. Chicago Democrat Murphy has the most to lose from the outside income limit. The most recent House financial disclosure statements show that almost all of the $33,785.76 he reported for the fourth quarter of 1977 would be banned by the new rules. Murphy received $30,005 in legal fees from his Chicago law firm in that quarter (the statement also showed Murphy with a net worth over $800,000).
Others in the delegation with outside incomes over $10,000 were Mikva, Findley, Yates and Anderson. In Mikva's case, his wife's teaching salary — which is not counted under the outside income limits - accounted for most of his outside income. Yates was the only Chicago organization Democrat favoring the income limit. He reported $29,671.46 in outside income last year, but all of it was in dividends and interest — which are exempt. Rostenkowski disclosed that he talked with other Chicago organization Democrats about the limits, but says he did not try to influence their votes. However, those Democrats voted 5-1 in favor of repealing the limit. "I think ethics legislation is too personal for conversation," Rostenkowski said. "I consistently voted against outside income limits because they hit urban members more than they do rural ones. For anyone to say it's ethical to sell crops but not real estate on one's own time is inconsistent." Russo's and O'Brien's aides seconded Rostenkowski's point to explain their bosses' votes. "It did not strike equally at farmers and lawyers," a Russo aide noted. O'Brien's top aide added, "It's easy for a farmer to incorporate and receive dividends which are exempt; but it's not so easy for a professional man" — such as lawyer O'Brien. O'Brien also asked a question which has troubled other observers: why limit outside earned, but not unearned, income? This point was the crux of Senate debate in 1977. "He thinks it is unfair to put a lid on this income while allowing someone with $5 million in General Motors stock to collect dividends on it," O'Brien's aide said. Hyde charged in a House floor speech that the earned income limit "will produce a Congress full of college professors, professional bureaucrats and social scientists." In a similar vein, Rostenkowski noted, "the businessman and his expertise will be discouraged" from running." Mount Prospect's Phil Crane had philosophical objections to the income limit, his aides said. "He believes it's an unconstitutional limitation on members. By putting the limit in, you're adding a condition not in the Constitution on who can run for Congress." Crane's position may be defensible constitutionally, but he may have trouble explaining his vote against the income limits while out on the GOP presidential trail. December 1978/Illinois Issues/35
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