Tuesday, June 10, 2014

America's Retired Presidents - A Lifetime Commitment for Taxpayers

With Republican members of Congress appearing to be particularly concerned about spending tax payers nickels and dimes, I found the recently released analysis from the Congressional Research Service "Former Presidents: Pensions, Office Allowances and Other Federal Benefits" by Wendy Ginsberg quite enlightening.  

The Former Presidents Act (FPA) was enacted in 1958 to provide former Presidents of the United States with a pension, support staff, security, office support, travel funds and mailing privileges to "maintain the dignity" of the Office of the President.  Prior to 1958, former Presidents left office with no federal pension or financial assistance.  Due, in large part, to former President Truman's financial difficulties after he left office, the FPA was enacted by Congress to ensure that former Presidents were not destitute and an embarrassment to the state.  The FPA provides funds to all former Presidents and their wives to "help him respond to post-presidency mail and speaking requests, among other informal public duties".  Widows of former Presidents are also entitled to a monetary allowance of $20,000 annually.  Funds are appropriated by the Administrator of General Services up to $1,000,000 for each former President and $500,000 for the spouse of each former President each fiscal year for security and travel related expenses.

In its original form, the FPA granted former Presidents an annual pension that is equal to the pay received by the head of an executive department which is $201,700 in 2014.  In January 2013, the Presidential Allowance Modernization Act (H.R. 248) was introduced; this bill seeks to limit the pensions received by former Presidents to $200,000 annually and remove other benefits provided for travel, staff and office expenses.  As well, for every dollar that a President earns in excess of $400,000 annually, his annual pension would be reduced by $1.  As you will see later, this is a very interesting change to the system given the earning power of today's former Presidents.  In addition, according to H.R. 248, if a former President holds an elected position in the federal government, he would not be able to collect his pension until he left elected office.  This bill was referred to the House Committee on Oversight and Government Reform on January 15, 2013 where it languishes.

On January 10, 2013, President Obama signed into law the Former Presidents Protection Act of 2012 (H.R. 6620) which extends lifetime Secret Service protection to all former Presidents and their children.  Before the bill was enacted, President George W. Bush would have been the first former POTUS to have his post-Presidency Secret Service security limited to 10 years after he left office, changes to the system that were put in place in 1994 for all Presidents who entered office after January 1, 1997.  Oddly enough, in a Congress that is besought by partisan bickering, H.R. 6620 was introduced on November 30, 2012, passed the House on December 5, 2012, the Senate on December 28, 2012 and was promptly signed into law.  Note that the Secret Service does not disclose the cost of protecting the former First Families.

Now, let's get to the bottom line.  For fiscal 2014, Congress appropriated $3,551,00 for former Presidents, down 3.1 percent from the $3,663,000 appropriated for fiscal 2013.  Here is a chart breaking down the 2014 appropriations (in thousands of dollars) for the four retired Presidents that are still living:

Here are the total appropriations for all former Presidents that have been the beneficiaries of the FPA since the year 2000:

In total, since 2000, the pensions and benefits for the former Presidents of the United States and their widows have cost $60.053 million.

Here's what the costs for each of the former Presidents look like in terms of 2013 dollars:

Despite the general trend of increasing costs, when adjusted for inflation, the value of each former President's pensions and benefits has remained stable or declined 

When President's leave office, they are entitled to "transitional expenses" that pay for the costs of winding up the affairs of their office for a period of up to seven months.  In fiscal 2009, President George W. Bush requested $8,520,000 for transition expenses to support transition costs for the President, Vice President, President-elect and Vice President-elect.  In anticipation of the 2012 election, President Obama's fiscal 2013 budget requested $8.9 million for possible transition expenses.

One issue that is of concern is the cost of renting office space for former Presidents as shown on this chart:

The author of the report suggests that one option to control rental costs would be to cap the size of the office and that the office be located in a federal building.  

During the debate on the Former Presidents Act in 1958, Representative Joseph Martin made this comment:

“Mr. Speaker, let me say to the distinguished Speaker that I favor the adoption of the conference report because I believe it is necessary to accept the report to have legislation that I believe is just and desirable. I believe all Government employees are entitled to a pension, regardless of their offices. It has been my experience to know personally 8 Presidents of the United States. 4 of them rather intimately. I know the tremendous burden that is thrust upon their shoulders in this high office. I know the very exacting demands of the office. I think any man who has served as President of the United States, no matter what his political faith, is entitled to be assured of a retirement revenue at the close of his service.

Mr. Speaker, reference has been made to Mr. Hoover. Mr. Hoover does not need this pension. He does not need any of the emoluments that go with the legislation. He is big enough to appreciate and say that there may be men coming along who will need this. We should not force them to write and lecture to gain a livelihood in their final days. I do not believe that we should be niggardly. We must not make it so that only men of great wealth can serve as President.”

Little did Representative Martin know how substantial the earning power of a former President would be fifty years later!

All of the currently living former Presidents are making a very lucrative living based on their service to the United States.  Fortunately, we have a snapshot of what former Presidents are capable of earning thanks to Hillary Clinton.  According to Hillary Clinton's financial disclosures from 2012, we know that former President Bill Clinton earned honorariums ranging from $150,000 to $700,000 for each of the 73 speeches that he gave during the 12 month period to wide-ranging business and philanthropic audiences.    He also has published several books as has George W. Bush, George H.W. Bush and Jimmy Carter.  According to the Center for Public Integrity, George W. Bush's speaking fees of between $100,000 and $150,000 per speech have earned him about $15 million for the 140 paid talks that he gave by mid-2011. This is on top of his estimated net worth of between $6.5 million and $20 million.

In light of the aforementioned information, perhaps a complete review of the Former Presidents Act is warranted.  After all, it's not as though any of the currently living former Presidents are having difficulty putting food on the table.  While the costs to American taxpayers of keeping retired Presidents out of the poorhouse are not overly onerous compared to President Obama's 2015 budget, the message being sent is not a particularly easy one to digest, particularly given that some members of Congress are kicking up a fuss over spending a few million dollars on child care subsidies.

1 comment:

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