President Donald Trump’s promise to "drain the swamp" was not convincing to Sen. Charles Schumer, D-N.Y., who illustrated his criticism with Trump’s billionaire cabinet, which "has more wealth than a third of the American people total -- close to a 100 million people."
That seems like a large share of wealth in cabinet member’s pockets. But is Schumer right?
He is, although his comparison is disputed among economists because so many Americans have a low net worth.
Schumer specifically talks about the "net wealth" of cabinet members. Net wealth is how much a person’s assets are worth once you have subtracted liabilities, like mortgage or credit card debt. If a person has high debt that exceeds their assets, their net wealth is negative.
It is impossible to calculate the exact net wealth of Trump’s cabinet, because the members are only required to indicate a range while filling out their financial disclosure forms, such as "between $15,001 and $50,000". The ranges can vary by up to 25 million.
That is a pretty vague indication.
Other news media, like the NBC News estimated it to be as high as $14.5 billion. We looked at data provided by OpenSecrets and publicly available financial disclosure forms and found a much lower number: $3.5 billion, not including assets of spouses. Due to a lack of information, we could not add Sonny Perdue, the nominee for Secretary of Agriculture, and Alexander Acosta, Trump’s nominee for Secretary of Labor, to that number.
However, it would not have made a big difference.
It also doesn’t really matter how rich Trump’s cabinet members exactly are.
According to the Federal Reserve, a U.S. household had an average net wealth of $46,700 in 2013, which are the most recent numbers available.
However, the bulk of wealth in the United States is owned by the top 10 percent, according to the Congressional Budget Office. The bottom half only holds 1 percent of U.S. wealth distribution.
The U.S. Census Bureau reported that in 2011 the bottom quintile of Americans had a negative net wealth of -$6,029 and the second quintile had a net wealth of $7,263. This is compared to a large difference with the third quintile: $68,839 in 2011. The number keeps rising exponentially for the fourth quintile who own $205,985 and the highest quintile who owned $630,754.
"The bottom one-third of American households ranked by wealth own approximately nothing," says Gabriel Zucman, an economist at the University of Berkeley. That is because some either have a very low or even negative net wealth, due to high debt.
For that matter, it does not take a lot to "have more wealth than a third of the American people," like Schumer claimed, Zuchman added.
So even if Trump’s cabinet were all people from the middle class, Schumer’s statement would still be accurate.
Schumer said that Trump’s cabinet had more net wealth than a third of the American people. He bases his claims on an estimate of $9.5 billion of net wealth for the cabinet. Economists familiar with those kinds of comparison told us that Schumer got his numbers right.
But they also told us that there needs to be clarification on the meaningfulness of Schumer’s statement, since it doesn’t take billions of dollars to be richer than the bottom third of of the United States.
We rate this claim Mostly True.