Conservatives who want Supreme Court nominee Brett Kavanaugh to serve for a generation and move the law rightward have a new, perhaps unwanted, reason for confidence: The 53-year-old nominee is nowhere near retirement-ready financially.
Kavanaugh’s financial disclosure report was only noted in passing by legal eagles, but left personal-finance mavens scratching their heads. Already an appellate-court judge — with a Yale Law degree, no history of bad health or unemployment and a working spouse — he has $15,000 to $50,000 in the bank, no reported stock, bond or fund holdings, and a 401(k) retirement account held by his wife that holds less than $15,000. He’s miles behind where a normal person’s finances should be at 53.
Based on his report, Kavanaugh will be the only non-millionaire on the court, with a net worth, excluding his house, of less than $100,000 — or about the cost of a year at Yale Law, an estimated $76,000 all-in.
Kavanaugh isn’t alone in living close to paycheck to (in his case) $8,500 pretax biweekly paycheck, not including side gigs teaching at Harvard Law School ($27,490 in additional income in 2017). According to the Federal Reserve, 47% of Americans would have trouble meeting an unexpected $400 expense. Of course, the median household income of about $57,000 is a quarter of the Kavanaugh family nut.
Unlike many Americans, however, Kavanaugh has no debts, excluding any mortgage on his 2,472-square foot house in Maryland, which he isn’t required to report. (Zillow.com values the home at $1.39 million and lists the last reported sale at $1.23 million in 2006. The return on that investment? A paltry 1.05% annually.)
His 2017 disclosure lists one loan that totaled less than $15,000 at the end of 2017 that has since been paid off.
Give him credit for paying down other debts as well; his disclosure form for 2006, the year he was named to the U.S. Court of Appeals in Washington, D.C., he listed that loan at between $15,000 and $50,000 — as well as three credit cards, each with balances in the same range.
Like many parents, the Kavanaughs appear to be doing a poor job saving for college. His latest disclosure form gives no indication that he has used the tax benefits offered through 529 college savings plans to put money aside for his daughters’ bills for tuition, room, board, books and more.
With two children, Kavanaugh is looking at $150,000 a year if he and his wife send their daughters to his own alma mater (his wife, President George W. Bush’s former personal secretary, went to the University of Texas).
And while there’s no sign of a substantial retirement nest egg, Kavanaugh is one of a dwindling number of Americans who are earning a lifetime pension. He’ll be able to collect his full salary — the current pay is $255,300 — as a pension if he serves on the court until age 68. And there’s no chance of being laid off before that magic date; this new post comes with job security for life. So cry no tears for him.
Why Kavanaugh’s weakish finances matterMost reaction to Kavanaugh’s weakish finances has been a shrug; Twitter shows mostly people observing that a man who owns nothing will have few conflicts of interest. That’s true: When drug companies litigate patent law, or media giants’ antitrust battles land in court, he won’t have conflicts.
But will he have any knowledge worth having? That’s why Kavanaugh’s money is worth knowing about.
As a nonpracticing lawyer, from a humbler law school than Yale, what strikes me after a lifetime covering business is how big the gaps in Kavanaugh’s experience are, and how likely they are to be exposed by cases he faces.
This is hardly unusual for Washington-based movement conservatives. Right-wing think tanks are well-known for economic stances that belie common experience: In my business, we all see their “studies” about what a terrible place high-tax California is to start a business (news to Facebook, Alphabet, Netflix, etc., and recognizable as fiction to anyone who covered them). Taxes matter some, but other factors matter much more.
This failure to understand business may help explain things like Kavanaugh’s appellate-court opinion failing to recognize that the Affordable Care Act, which comprehensively regulates a $3 trillion industry, might fall within Congress’ constitutionally-granted power to regulate interstate commerce. Or his inability, in a case challenging President Barack Obama’s Clean Power Plan, to understand claims the plan would cause massive job losses were nonsense. “A lot of people are going to lose their jobs, lose their livelihoods,” Kavanaugh said.
If Kavanaugh had ever owned a utility stock or a coal-company bond, he’d understand that wind and solar power employ more people than coal companies that compete with them to fuel electricity plants, and would get a boost from Obama’s plan, which President Donald Trump is trying to shelve. If he knew more economics, he’d know the coal industry already employs fewer people than are hired in a good week nationwide.
Much has been made of the similarity among Justices’ experience, especially their uniformly Harvard-Yale-Stanford educational pedigrees. But of the justices, only Neil Gorsuch and, involuntarily, Chief Justice John Roberts logged much private-sector time beginning the in 1980s. (Roberts spent well over a decade in private practice after not being confirmed for judgeships).
President Bill Clinton and Obama used to muse about appointing justices with more real-world experience, including political experience, hoping to get another Earl Warren or Hugo Black, who remade the law and the world. But they didn’t.
I’d love to see justices whose experience taught them what it’s like to compete with a company breaking antitrust law, to be a patient when drug companies stretch patents beyond where they should go, or an employee when a large corporation claims it has a religion to curtail your benefits or discriminates against you. I’d like justices who can read income statements, and understand when corporations are crying poverty and when they are really overburdened.
If that meant justices had once devoted themselves to making money and investing wisely, that would be good, assuming they sold the interests before joining the court. Same is true of people who did government service as Kavanaugh has, but paid more attention to building wealth from thrift and wit. That’s experience. I wish Kavanaugh had more.
A little knowledge might even help produce that elusive result called justice.
