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Taxpayer's Tab Issue #30

August 23, 2013

 

 

 

Vol. 4 Issue 30 August 23, 2013

Spending Spotlight: Benefits for Former Presidents

Recently, The New York Times and other media outlets published in-depth investigations into the finances of former President Bill Clinton's non-profit foundation. One allegation was that the Clinton Foundation has spent over $50 million on travel over the past decade. While President Clinton personally responded to the article, we will leave it to others to determine whether or not his organization is wisely using its charitable donations. But it did remind us here at the National Taxpayers Union Foundation (NTUF) that Clinton, as well as the other surviving former Presidents, continue to receive additional taxpayer funding every year not only for travel, but for office space, postage, pensions, and even periodical publications. From 1998 to 2012, taxpayers have spent over $52 million on providing these perks to former Presidents.

How did this come to be? After all, Mr. Clinton is one of the wealthiest ex-Presidents in history, having earned over $125 million in speaking engagements, book signings, and other private ventures since leaving office in 2001. His fellow alumni are also faring well. Former Presidents George H.W. and George W. Bush, along with Jimmy Carter, are all estimated to be worth at least $7 million.

Presidential Retirement Before 1958

Prior to 1958, former Presidents did not receive any sort of federal retirement assistance. Many Presidents chose to pursue careers. Some retired quietly and lived off of the wealth that they had accumulated prior to being elected President.

Others came from more modest backgrounds and were less able to transition into post-Presidency life. Following Harry Truman's departure from office in 1953, he was unable to handle the financial burden of replying to the public letters and speaking requests. Truman's struggles led to the introduction of the Former Presidents Act in 1957. It was meant to provide a pension comparable to those that military generals received, along with funds to assist former Presidents with various mail and office duties that followed them into retirement. The bill was passed in 1958 after vigorous debate and signed into law by President Eisenhower.

Modern Presidential Retirement

The U.S. General Services Administration (GSA) is tasked with providing the perks to former Presidents granted to under the Former Presidents Act (FPA) and other legislation enacted into law. Those benefits include:

  • Transition Expenses: Covers the costs of briefing incoming Administrations as well as "winding down" the affairs of those leaving office, limited to 30 months. For 2009, President Bush requested $8.5 million, of which $1 million was used to brief Obama Administration personnel.
  • Pensions: Tied to the rate of basic pay for the head of any Executive Department, equaling $199,700 for FY 2013. Widows are eligible for a pension of $20,000 if they chose to forgo any private pensions.
  • Office Space and Staffing Allowances: Provides funding for former Commanders-in-Chief to establish an official office anywhere in the U.S.
  • Travel Expenses: Reimburses Chief Executives and up to two staff members for up to $1 million in costs annually. First Ladies also are eligible for $500,000 for official travel.
  • Health Benefits: Provided that they enroll in the Federal Employees Health Benefits program for at least five years, former Presidents are eligible for health annuities, similar to all federal employees.
  • Funerals: Guarantees a ceremony with full honors and the option to be buried at Arlington National Cemetery.

In addition, former Presidents and their spouses receive lifetime Secret Service protection. However, a spouse loses that protection if the President dies and the spouse remarries or in the event of a divorce. Children are protected until the age of 16. On January 10, 2013, President Obama signed legislation to undo a 1994 law that limited Presidents' protection to 10 years after leaving office. The related costs are classified.

Costs of Benefits

Every Fiscal Year, the GSA is required to justify its budgetary requests, including the funds it needs to provide former Presidents with FPA benefits. Every President takes advantage of these benefits to a varying extent.

The following graphic, which uses information provided by the Congressional Research Service (CRS), shows the share of benefits provided to eligible Presidents in thousands of dollars for fiscal year 2012. You can check out an overall breakdown of costs for each former President by clicking on the image.

2012 Benefit Payouts to Former Presidents

GSA provides former Presidents with funding for a "suitable office space, appropriately furnished and equipped" anywhere in the U.S. In 2012, one of the few years for which budget outlay details are available, taxpayers paid over $1 million for office space for former Presidents, including $106,000 for Jimmy Carter's office in Atlanta, GA, $171,000 for George H.W. Bush's office in Houston, TX, $395,000 for George W. Bush's office in Dallas, and $442,000 for former President Clinton's office in New York City. Currently, there is no limit to the amounts available for this benefit.

The most expensive perk provided to former Presidents is rental payments. GSA did report to the CRS specific outlay information for 2012 for each former President’s spending on each benefit. These items include office rental, travel, and postage. However, yearly figures of these amounts have not been released. The best publicly available information is found in GSA's annual Congressional budget justifications. These reports provide an overview of the Agency's activities and contain detailed budget requests for the Fiscal Years in which they were released. The nine latest years are currently available on GSA's website. Since these are requested amounts, they may not match the amount that is ultimately spent, yet they provide a useful gauge to approximate how each former President makes use of taxpayer funds. For example, from FY 2006 through 2014, over $1.2 million was budgeted for travel ($507,000 of which was for H.W. Bush), $9.3 million was allotted for office rental (nearly half of this amount, $4.5 million, was for President Clinton's office), and $516,000 for "Supplies & Materials", which according to CRS includes office supplies, newspapers, and periodicals.

The full table with the breakdown of spending requests for each specific benefit is available here.

Recent Reform Legislation

Some in Congress have questioned the need for benefits expenses as lavish as current law provides. The issue is especially pertinent given the long-term budget deficits and also given the wealth of modern ex-Presidents and their ability to earn income from speaking engagements, book signings, and other ventures.

In the 112th Congress, Congressman Jason Chaffetz (R-UT) introduced H.R. 4093, the Presidential Allowance Modernization Act. It would have capped pension benefits for former Presidents at $200,000; repealed their travel, office, and staff expense privileges; and reduced annual benefits by $1 for every dollar earned above $400,000 in any fiscal year. "Nobody wants our former presidents living the remainder of their lives destitute," said Congressman Chaffetz in a statement. "But the fact is none of our former presidents are poor. ... There's little reason why American taxpayers should be subsidizing these former presidents when they're doing fine on their own."

The bill has been reintroduced in the 113th Congress, albeit with 6 fewer cosponsors, as H.R. 248.

Conclusion

The office of President of the United States carries with it a tremendous responsibility to the public, and as a result, often cultivates a level of celebrity that endures long after the Chief Executive leaves the White House. Former Presidents' heightened visibility and the public interest that lingers can require significant administrative efforts to handle. The Former Presidents Act was designed to address this issue. However, as modern Presidents find more ways to earn private wealth, it is worth reconsidering whether taxpayers should continue to fund retirement benefits at such high costs.

Photo Credits: AEI, The Wall Street Journal, and Wikimedia Commons

About NTUF

The National Taxpayers Union Foundation is a research and educational organization dedicated solely to helping citizens of all generations understand how tax policies, spending programs, and regulations at all levels affect them now and in the future. Through NTUF's timely information, analysis, and commentary, we're empowering citizens to actively engage in the fiscal policy debate and hold public officials accountable every day.

NTUF is a 501(c)(3) research and education organization. Donations are deductible for personal income tax purposes. Please make a donation today to help further NTUF's mission of research and education!

This information is for educational purposes only and is not intended to aid or hinder the passage of any legislation or as a comment on any Member's fitness to serve. Cosponsor information obtained from GovTrack.us.

 



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