After enjoying a post-retirement getaway on a private island in the Pacific Ocean, President Obama returned to the country – and into headlines – for collecting $400 grand for a speech he gave at an advertising event put on by A&E Networks. It is reported that he will make another $400,000 for speaking at the financial firm Cantor Fitzgerald LP’s conference this September. Unlike some sitting Senators, we certainly don’t begrudge his opportunities to earn money, but this payout does raise issues regarding the propriety of the expensive benefits that taxpayers provide to former presidents.
The Former Presidents Act created a benefit program starting in 1958. The impetus was to maintain “the dignity of the Office of the President” and to assist Harry S. Truman, who was struggling financially after leaving office. Truman was an exceptional case: generally presidents are wealthy, and in the modern era especially, have ample opportunities to generate income in retirement.
Presidents receive an annual pension that is currently worth $207,800 (same as cabinet secretaries’ annual salary), as well as taxpayer funding for an office and staff, travel expenses, health benefits, and, of course, Secret Service protection. Congress appropriated $3.3 million for allowances and benefits in FY 2016 (excluding security costs, which are classified), with the Consolidated Appropriations Act slated to fund $3.9 million for FY 2017.
The House and Senate, each by voice vote, passed the Presidential Allowance Modernization Act to reform the program last year. It would have set the allowance and pensions at $200,000 per year, and reduce perks when any former president’s earnings exceed $400,000 in a year. The bill would have led to an annual savings of $2 million – a modest amount, but symbolically important in an era of chronic deficit spending.
Unfortunately, President Obama vetoed the measure. Since he hadn’t issued a warning that he would while the bill was being considered, the executive thumbs down came as a surprise. In a statement, the White House spokesman noted that Obama shares the goal of streamlining pensions, but that the administration was concerned that the bill, as written, would immediately terminate salaries and benefits of staffers serving past presidents.
Reform legislation has not yet been reintroduced this year. Until Congress revisits this issue, President Obama gets the full benefits available through the program he blocked from reform, and taxpayers continue to pay for perks to the wealthy.