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Why Congress gave $174,000 to Dianne Feinstein's wealthy daughter as part of a recent bill to avert a government shutdown

Katherine Feinstein and the late Sen. Dianne Feinstein.
Katherine Feinstein and the late Sen. Dianne Feinstein.AP Photos/Jeff Chiu and J. Scott Applewhite
  • The most recent government funding bill included $174,000 for Dianne Feinstein's daughter.

  • It's a tradition known as a "death gratuity" that's been in place for at least 140 years.

  • Congress has spent more than $5 million on death gratuities since 2000.

When both chambers of Congress voted to avert a government shutdown earlier this month, they weren't just voting for a bill to keep the lights on.

They were also handing over $174,000 to Katherine Feinstein, the daughter of the late Sen. Dianne Feinstein.

As laid out in Section 146 of the Further Continuing Appropriations and Other Extensions Act, which President Joe Biden signed into law on November 16:

Notwithstanding any other provision of this Act, there is hereby appropriated for fiscal year 2024, out of any money in the Treasury not otherwise appropriated, for payment to Katherine Anne Feinstein, beneficiary of Dianne Feinstein, late a Senator from the State of California, $174,000.

But Katherine Feinstein, a former judge in San Francisco and the only child of the recently-deceased California Democrat, almost certainly does not need that money.

Her mother held tens of millions of dollars in assets, making her one of the wealthiest members of Congress, and Katherine — who has been engaged in a protracted dispute over her mother's assets and even held power of attorney over the long-serving late senator — is likely to inherent a significant portion of that wealth.

So why did Congress give her $174,000? The answer, it turns out, is something known as the "death gratuity."

A tradition for at least 140 years

According to experts, the death gratuity — a payment to the surviving family of a member of the House or Senate who dies in office — has its origins in an earlier era of American history, when life insurance was less commonplace.

It's also a matter of tradition, rather than law.

The National Taxpayers Union Foundation — a fiscally conservative advocacy group — has pin-pointed the earliest such payment in 1880, when Congress paid $6,000 to the widow of the Rep. Alfred Lay, a Missouri Democrat who died in office the previous year.

But the group says that it's possible that these payments happened even earlier than that.

The payments, which are given out irrespective of the recipient's own personal wealth, were originally meant to allow the spouses or families of deceased lawmakers to survive without their income.

These days, the death gratuity is equivalent to a year's salary — $174,000 for rank-and-file lawmakers, $193,400 for majority and minority leaders, and $223,500 for the speaker of the House.

It's more than the family of deceased soldiers get — and it's tax-free

When a member of the military dies in the line of service, surviving family members are paid $100,000 — a little more than half of what lawmakers get.

Both lawmakers and military members' death gratuities are considered as gifts, and are thus exempted from taxes.

According to the relevant portion of US law:

Any death gratuity payment at any time specifically appropriated by any Act of Congress or at any time made out of the applicable accounts of the House of Representatives or the contingent fund of the Senate shall be held to have been a gift.

It's also somewhat controversial

Groups like NTUF argue that the practice is wasteful, calling it "outmoded in the modern era given the availability of options for retirement savings and life insurance."

In 2021, NTUF calculated that gratuity payments have cost taxpayers more than $5.1 million since 2000.

Previous recipients have included the family members of some extraordinarily wealthy lawmakers, including Republican Sen. John McCain of Arizona and Democratic Sen. Ted Kennedy of Massachusetts.

"That is a Senate tradition that we will do," former Sen. Richard Shelby told Roll Call in 2018 following McCain's death. "We'll do what we have to do, we'll do the right thing."

And as in the case of Feinstein, sometimes the payments are delivered through totally unrelated, must-pass legislation.

In 2013, the widow of Democratic Sen. Frank Lautenberg of New Jersey was awarded a death gratuity as part of a bill to avert a default on the country's debt, with ABC News describing the payment as an example of "pork" spending.

Rep. Bill Posey of Florida, a fiscally conservative Republican, has introduced bills to ban the payments several times during his tenure.

In a 2011 press release, Posey argued that the tradition is "difficult to justify particularly when every other American purchases their own life insurance."

"This issue concerns the proper use of taxpayer resources along with restoring the legislative branch to a position of trust in the public eye," Posey said at the time.

Business Insider reached out to Katherine Feinstein via her lawyers but did not receive a response.

Read the original article on Business Insider