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President-elect Donald Trump chose Betsy DeVos to be his education secretary. Her net worth has been reported as being as high as $5 billion, but also as low as $130 million. (Associated Press) President-elect Donald Trump chose Betsy DeVos to be his education secretary. Her net worth has been reported as being as high as $5 billion, but also as low as $130 million. (Associated Press)

President-elect Donald Trump chose Betsy DeVos to be his education secretary. Her net worth has been reported as being as high as $5 billion, but also as low as $130 million. (Associated Press)

Tom Kertscher
By Tom Kertscher December 30, 2016

Do 17 picks for Donald Trump's Cabinet have a higher net worth than one-third of Americans?

Critics of President-elect Donald Trump say he promised to "drain the swamp" in Washington but has instead chosen wealthy and connected insiders for his Cabinet.

U.S. Rep. Mark Pocan joined that chorus during a Dec. 16, 2016 interview on Wisconsin Public Radio.

Trump’s first 17 picks for the Cabinet, the Madison Democrat charged, "have a net worth of more than a third of America."

They do.

But here’s the twist: So might a group of 17 ordinary Americans.

Cabinet’s net worth -- $6 billion or more

Net worth is the difference between a person’s assets and liabilities.

So, things like savings and retirement accounts on one hand, versus what is owed on a home mortgage, credit cards, etc. That means a person with heavy debt can have no net worth, or a negative net worth, even while earning a six-figure income.

As for Trump’s Cabinet picks, a number have made news for their wealth. But let’s start with what is the Cabinet.

The Cabinet has 16 members who are in the official line of succession to the presidency -- the vice president, plus the heads of 15 executive departments, such as the secretary of state and the secretary of defense. However, seven more positions "have the status of Cabinet-rank." They include the White House chief of staff and the head of the Environmental Protection Agency.

To back Pocan’s claim, his office cited an article posted the day before his radio interview by a website called Quartz, which describes itself as a news outlet founded in 2012 "for business people in the new global economy."

The article examined the wealth of 17 Trump selections -- 13 Cabinet members, plus four Cabinet-rank positions. The article said those 17 people have more than $9.5 billion in combined wealth -- "greater than that of the 43 million least wealthy American households combined -- over one-third of the 126 million households total in the U.S."

That $9.5 billion is roughly in the middle of other estimates on the wealth of the Cabinet.

On the high end, the Boston Globe, NBC News and CBS News put their estimates at $13 billion to $14 billion. But that includes $5 billion attributed to Todd Ricketts, Trump’s pick for deputy commerce secretary, which is not a Cabinet or Cabinet-rank position, and $5 billion for Trump’s choice for education secretary, Betsy DeVos, a number that has its own problems.

On the low end of the estimates is $6 billion, from Bloomberg.

Bloomberg doesn’t count Ricketts. And it estimates DeVos’ net worth as only $130 million, not $5 billion. Both Bloomberg and Forbes point out that the $5 billion is the estimated worth of Richard DeVos, Betsy’s father-in-law and the co-founder of Amway, not Betsy DeVos’ wealth.

Featured Fact-check

The other wealthiest Trump Cabinet picks and their estimated net worth, according to Bloomberg: investor Wilbur Ross Jr., the choice for Commerce secretary, $2.9 billion; Linda McMahon, the former World Wrestling Entertainment chief executive officer and Trump’s choice for administrator of the Small Business Administration, $1.4 billion; and financier Steve Mnuchin, the choice for Treasury secretary, $655 million.

One-third of U.S. households

It almost doesn’t matter, however, whether the net worth of Trump’s Cabinet is $6 billion or more.

That’s because one-third of American households combined -- which includes households with extreme negative net worth -- have essentially no net worth.

Pocan’s claim, said University of California, Berkeley economist Emmanuel Saez, director of the school’s Center for Equitable Growth, "is a pretty meaningless statement" because "the bottom one-third of American households ranked by wealth own approximately nothing -- some have negative wealth, some have very low wealth."

One reason for gaps in wealth is income inequality. The Urban Institute think tank, using the Federal Reserve Board's Survey of Consumer Finances data, found that families near the top had a 70 percent increase in income from 1963 to 2013, while the income of families at the bottom stayed roughly the same.

In fact, the bottom one-third of American households have a combined net worth of negative $50 billion, Caroline Ratcliffe, a senior fellow at the Urban Institute, told us -- though that is misleading in that it includes relatively few households with extreme negative net worth.

If you exclude those households, the vast majority of households in the bottom third have a net worth of about $3.7 billion.

So, if Trump's 17 Cabinet picks have a combined net worth of $6 billion or more, their net worth is greater than the least wealthy one-third of American households.

But if the bottom one-third actually has a negative net worth, any 17 ordinary Americans who have a net worth of at least $1 would have a higher net worth than one-third of Americans.

Our rating

Pocan says Trump's first 17 Cabinet appointments "have a net worth of more than a third of America."

One-third of American households have a combined net worth of roughly zero. So, the combined net worth of Trump Cabinet members is greater, but so is that of any American who has a net worth of more than zero.

For a statement that is accurate but needs additional information, our rating is Mostly True.

 

https://www.sharethefacts.co/share/8a023f85-18f0-46c6-afaf-51178c79b199

Recent fact checks on wealth

→ While campaigning in Madison for Hillary Clinton, the 2016 Democratic presidential nominee, Bernie Sanders claimed Trump’s plan to repeal the estate tax would mean the Walmart Walton family would "get a $53 billion tax break." Our rating was Half True. Based on the collective wealth of seven Sam Walton descendants, they could face a tax of about $53 billion under the current estate tax law, but there were other factors to take into account.

→ Previously, while still challenging Clinton for the nomination, Sanders said in Madison that "the top one-tenth of 1 percent" of Americans "own almost as much wealth as the bottom 90 percent." That merited a Mostly True. His claim repeated the finding of a study by two internationally known economists, though some criticized the study for not including Social Security in the wealth calculations.

Our Sources

Wisconsin Public Radio, Mark Pocan interview (13:20), Dec. 16, 2016

Email, Mark Pocan communications director David Kolovson, Dec. 19, 2016

Quartz, "Trump’s 17 cabinet-level picks have more money than a third of American households combined," Dec. 15, 2016

Interview, Bloomberg Billionaires editor Rob LaFranco, Dec. 29, 2016

Email, University of California, Berkeley economist Emmanuel Saez, director of the school’s Center for Equitable Growth, Dec. 29, 2016

FactCheck.org, "Sanders’ Wealth Inequality Stat," Jan. 8, 2016

Federal Reserve Bulletin, "Changes in U.S. Family Finances from 2010 to 2013: Evidence from the Survey of Consumer Finances," September 2014

Email, economist Joseph Newcomb, Dec. 28, 2016

Email, Federal Reserve Board spokeswoman Susan Stawick, Dec. 29, 2016

NBC News, "Trump's Cabinet Picks Have a Combined Wealth of $14.5B. How Did They All Make Their Money?" Dec. 7, 2016

Boston Globe, "Trump’s Cabinet picks so far worth a combined $13b," Dec. 20, 2016

Forbes 400, Richard DeVos and family, Dec. 21, 2016

Forbes 400, Wilbur Ross Jr., Dec. 21, 2016

Forbes 400, Vince McMahon, Dec. 21, 2016

Forbes, "Trump Picks Betsy DeVos, Daughter-In-Law Of Billionaire Amway Cofounder, For Education Secretary," Nov. 23, 2016

Bloomberg, "Trump’s $6 Billion Cabinet: Mostly Men, Mostly White and Not Much Government Experience," Dec. 19, 2016

Bloomberg, "Team Trump’s wealth tops $12 billion as Cohn to be tapped," Dec. 9, 2016

New York Times, Donald Trump Cabinet list, Dec. 15, 2016

Washington Post Wonkblog, "Donald Trump is assembling the richest administration in modern American history," Nov. 30, 2016

Business Insider, "Trump's latest pick hiked the net worth of his top advisers to $10 billion," Dec. 19, 2016

The White House, "The Cabinet" accessed Dec. 21, 2016

Email, Urban Institute senior fellow Caroline Ratcliffe, Dec. 29, 2016

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