The complex (and often tragic) saga of post-presidential retirements is well-known. Some presidents, such as Herbert Hoover, were independently-wealthy and thus spent their years after the White House in economic security. Other presidents, such as Woodrow Wilson, lived only briefly after their service in the Oval Office.
Yet other former presidents experienced great financial difficulties in retirement. The story of Ulysses Grant’s post-presidential travails is an iconic part of American history: at the end of his life, dying of cancer, an impoverished Grant wrote his now-celebrated memoirs to provide posthumously for the wife he adored.
Congress first authorized presidential pensions in 1958 in response to reports of President Truman’s financial problems in retirement. We now know that Truman’s economic situation was more complex than it appeared at the time: Truman had received substantial payments for his memoirs. But Truman declined most opportunities for post-White House remuneration as degrading the presidency and his post-presidential income was quite minimal.
Today, the presidential retirement package is generous. Former presidents receive for the rest of their lives the annual salary of a cabinet officer, today it is $207,800 per year. Former presidents also receive taxpayer-provided offices and office staffs as well as Secret Service protection. President Gerald Ford broke the Truman-mold of former presidents eschewing compensated employment to protect the dignity of the presidency. After leaving the White House, Ford aggressively sought income-producing opportunities.
If President Ford redefined the post-presidency, President Bill Clinton took the income of a former president to new and controversial levels. And now former President Obama seems to be opening the door to the Ford-Clinton approach. Published reports indicate that Mr. Obama will deliver a speech to the Wall Street firm Cantor Fitzgerald for $400,000. Harry Truman would not have approved.
Why should federal taxpayers pay a post-presidential pension to a former President who is willing and able to enrich himself after he leaves the White House? The rationale for presidential pensions was to prevent the financial straits which Grant and Truman experienced, not to provide a taxpayer-financed platform from which to pursue a post-White House fortune.
Perhaps, it might be retorted, the presidential pension, while an ample retirement for most of us, is small potatoes in a federal budget measured in hundreds of billions of dollars. But the presidential pension presents the classic case of a “broken window,” the relatively small incident which suggests deeper disarray.
Such manipulation of state pension systems, like presidential retirement payments, may be a tiny fraction of total government pension costs. But the message being conveyed to the hardworking taxpayer is the same: The system is stacked against you. Just as state pension systems should be reformed to prevent state legislators’ late career pension spikes, the presidential pension should be modified to account for the reality that some former presidents choose to monetize the aura of the presidency. In any year when a former president’s outside income exceeds some threshold amount (e.g., $200,000), his or her pension and office allowance should decrease by fifty cents for each dollar earned above this threshold.
Under this, or any similar formula, former presidents would remain generously compensated for their service to the nation. But, when such presidents make fortunes unfathomable to most Americans, they should return to the federal fiscal part or return all of the taxpayer’s subsidy designed to keep them from being impoverished.
This is a broken window which can be fixed.
Featured image credit: The Oval Office by US National Archives and Records Administration. Public domain via Wikimedia Commons.