The Bill: H.R. 1777, the Presidential Allowance Modernization Act
Savings Per Year: $3 million (one-year estimate)
In last week’s edition of The Taxpayer’s Tab, we featured legislation that would eliminate the automatic annual cost-of-living adjustments (COLA) for Congressional salaries. It’s no secret that many Members of Congress are very wealthy from their careers outside of Washington, and on top of their private wealth, Members also earn base salaries nearly three times as high as the average American household’s once they get to D.C.
However, legislators on Capitol Hill aren’t the only ones entitled to substantial pay once they’ve been elected. At the other end of Pennsylvania Avenue, the President receives an official salary of $400,000 on top of numerous retirement benefits once they leave office. These include:
A pension equal to Executive Cabinet Secretaries’ salaries, currently $201,700;
Lifetime Secret Service protection for former Presidents and their families;
Transition expenses for reconciling administrative overlap between administrations;
Up to $1 million per year in travel expenses (and $500,000 for former First Ladies); and
Office space (including rent, supplies, and staff) anywhere in the country.
Last year, NTUF conducted an in-depth analysis of the benefits provided to living former Presidents, which cost about $3.6 million in 2014 alone. The most expensive taxpayer-funded benefit was office rent, including $450,000 for Bill Clinton’s New York City facilities and $440,000 for George W. Bush’s office in Dallas.
Prior to 1958, former Presidents didn’t receive any retirement benefits at all, as most entered office very wealthy and generally didn’t need them. However, Congress authorized funding for them that year via the Former Presidents Act in order to “maintain the dignity” of the office after witnessing Harry Truman (who came from a relatively poor background) struggle to keep up with the demands of post-political life. However, most modern Presidents don’t face such financial difficulties, and are often able to take advantage of their heightened visibility by cashing in on speaking engagements, media appearances, and other private pursuits.
To reconcile that reality with existing laws, Representatives Jason Chaffetz (R-UT) and Elijah Cummings (D-MD) introduced the Presidential Allowance Modernization Act, which would cap former Presidents’ pensions at $200,000 per year and reduce other monetary benefits by $1 for every dollar above $400,000 that they earn outside of that. “History shows that former presidents do very well financially after they leave office. In fact, all living former presidents are millionaires, making it very unlikely that they depend upon their tax-payer funded allowances to make ends meet,” the Congressmen said in a press release.
Based on versions of the bill scored in previous sessions of Congress, NTUF expects the legislation would reduce federal spending by about $3 million in the first year.