Of the 90 or so new members of Congress elected this month, none has received more attention than Alexandria Ocasio-Cortez.
In part, that’s because of her compelling personal story: a bartender knocking off a 10-term incumbent in a primary and going on to win the general election at age 29. It’s also in part because of her ideological extremism (she identifies as a “democratic socialist”) and because of her tendency to sound as though she has no idea what she’s talking about—though to be fair to her, that characteristic is obviously neither rare nor disqualifying in contemporary political life.
Lately, though, some of the criticisms of AOC have smacked of elitism, such as the complaint that her choice of outfits is too extravagant for a person of supposedly humble means, or making fun of her professed lack of money to find an apartment in Washington.
If you look at the available evidence on AOC’s finances, though, you’ll see that they’re not at all atypical for a person in her late 20s.
Much of our knowledge about Ocasio-Cortez’s finances comes from a federal disclosure form filed last April. People running for public office are required to file forms listing their sources of income, assets, and debts. Here’s what they show about Ocasio-Cortez:
INCOME: AOC lists just $3,600 in 2018 income from a bartending job she quit in February. The previous year, she listed nearly $27,000 in annual income. That’s about right on the national average wage for bartenders ($28,808), according to the Bureau of Labor Statistics. Across all fields, starting salaries for college graduates averaged just above $50,000 in 2017. (She holds a bachelor’s degree in economics and international relations from Boston University.)
Her campaign raised $1.9 million, and it included big donations from the AFL-CIO ($5,000), the United Auto Workers ($5,000), MoveOn.Org ($5,000), Tom Steyer ($2,700), and Ben Affleck ($2,700). But as Rep. Duncan Hunter could tell you, you cannot use campaign funds for personal use, although you are permitted to pay yourself a salary. Ocasio-Cortez’s campaign paid her about $6,200 between August and October.
When she starts as a member of Congress in January, she’ll receive a big raise. Members of Congress earn $174,000 a year—which will place her in the top 10 percent of income nationally. People with that income typically pay around $34,000 annually in income taxes (which, just as an aside, is about $2,400 less than she would have paid had Trump not passed his tax cut).
SAVINGS: In her April financial disclosure form, Ocasio-Cortez listed three sources of savings: a checking account at Charles Schwab with between $15,000 and $50,000; an investment account at Charles Schwab with between $1,000 and $15,000; and a 401(k) retirement plan through the National Hispanic Institute valued at between $1,000 and $15,000.
Her spokesman said this month that she had burned through a lot of her savings during the campaign and now has “well below $7,000” in savings. A portion of her savings came from the sale of her parents’ house in 2016, the spokesman said.
Still, she’s doing better than most people her age. The median millennial has just $2,430 in savings, according to a study this year based on federal data.
Even AOC’s retirement savings are better than most her age. A February study showed that two-third of working Millennials have no retirement savings at all. Retirement savings is important for people in their 20s because money invested while you are young has more time to grow through compounding interest.
Ocasio-Cortez’s 401(k), according to her financial disclosures, is invested in a fund called Prudential High-Yield Z. High-yield bonds are what used to be known as “junk bonds”—risky corporate investments that in the 1980s were associated with greedy capitalists and that can carry higher returns than traditional bonds. While millennials should consider aggressive investments for retirement, many financial advisers would probably counsel her that it’s important to have a diversified portfolio that includes a variety of stock funds.
DEBT: Like many people her age, Ocasio-Cortez has some student loan debt. She lists between $15,000 and $50,000 in liabilities owed to the U.S. Department of Education associated with her studies at Boston University from 2007 to 2011. Student loans are common among Millennials: The year she graduated, about 68 percent of college students took out loans, according to the National Center for Education Statistics. Federal loans are generally designed to be paid off in 10 years, but there are also flexible payoff plans that account for people with low incomes.
Ocasio-Cortez has proposed forgiving student-loan debt.
One encouraging sign for her finances is that Ocasio-Cortez listed no credit card debt in her April disclosure. Credit card debt is the most common form of debt in America, with roughly 44 percent of households carrying a balance. With interest rates averaging 17 percent, credit card debt can quickly overwhelm financial goals. Financial advisers tend to make paying off high-interest debt a top financial priority.
There are other young members of Congress who aren’t fabulously wealthy. In 2014, when she was elected at age 30, Rep. Elise Stefanik listed just $41,000 in salary from a plywood company, though she also an ownership stake in a Capitol Hill townhouse worth $250,000 to $500,000 (and associated mortgage debt).
Most members of Congress, though, are far wealthier: Roll Call found that nearly 40 percent of the members of Congress are millionaires. Leading the pack is Rep. Darrell Issa, with $283 million in assets, largely from a successful car-alarm business. The member with the most difficult finances might actually be Rep. David Valadao, whose net worth was listed at -$17.5 million because of debts and loans from his family’s dairy farm.
Alexandria Ocasio-Cortez’s finances are actually encouraging in their ordinariness. America’s founders wanted the House of Representatives, with its short two-year terms, to be closer to the people than the Senate, which remains more insulated from popular whims. As James Madison wrote in Federalist 52: “The door of this part of the federal government is open to merit of every description, whether native or adoptive, whether young or old, and without regard to poverty or wealth.”
