The Obscene Federal Money Gravy Train for Ex-Presidents
Winning the presidency isn't just an honor, it pays a good deal, too. Not only do you get Tte White House and all of its services, but you also get $400,000 annual salary.
After you leave office, you are entitled to generous Secret Service protection and pension benefits. In 2012, taxpayers spent $3.7 million on ex-presidents; much of the money is for direct pensions of around $200,000 annually, but many presidents also request funds for office space. In 2012, former president George W. Bush got $400,000 for his 8,000-square-foot office space in Dallas, Texas; former president Bill Clinton spent $420,000 for his Harlem office.
In light of these lavish retirement benefits, it's easy to ask why ex-presidents spend so much time doing speeches and other favors for corporations and other interests upon leaving office. The Clintons, for example, made over $100 million from speeches to Wall Street banks, foreign corporations, and other private interests after leaving office.
But it wasn't always the case that taxpayers footed the bill for presidential retirements. In fact, it wasn't until 1958, when Congress passed the Former Presidents Act (FPA) that federal funds were authorized for presidential retirements at all.
This raises an interesting question: Why did Congress authorize such generous presidential benefits at that time? The answer deals exactly with what the Clintons, Bushes and other presidents have done since leaving office: influence peddle for cash.
Andrew Carnegie's Role In Creating The Presidential Pension
The subject of how an ex-president should lead their life was a hot one in the early 20th century. At that time, the country was barreling through the Industrial Revolution and saw the rise of extremely powerful robber barons and titans of industry who sought to influence the political process.
One of these men was Andrew Carnegie, who made his fortune from the steel industry; by the time of his retirement in 1901 at the age of 66, he was the world's richest man. Known as both a tremendous philanthropist and a man who ruled his own industry with an iron fist, Carnegie entered the debate over presidential pensions by offering to fund a private $25,000 pension for all retired ex-presidents.
This drew great controversy in the Congress and in political circles all over the country, as the idea that presidents would retire with the knowledge they'd receive huge sums of money from the world's richest man—the equivalent figure is over $600,000 in today's dollars—could create real conflicts of interest.
“I am not sure that an ex-president who would accept such a pension would receive or be entitled to the continued respect of the people of the United States,” said Senator Thomas Gore at the time (he was the grandfather of author Gore Vidal). William Howard Taft, who was the only remaining ex-president alive at the time, refused the offer.
Flash-forward to the 1950s. Former president Harry Truman left the White House so poor he moved backed to Independence, Missouri because “financially they had little other choice.” He turned down offers to become a chairman at a Florida real estate firm, and didn't go into lobbying or consulting. "I could never lend myself to any transaction, however respectable," Truman wrote, "that would commercialize on the prestige and dignity of the office of the presidency."
Moved by his plight, the Congress finally passed the FPA to ensure that presidents could retire with some financial comfort. But Truman had one more trick up his sleeve to bring himself back to comfortable living. He received a $700,000 advance for his memoirs, and charged a fee for appearing on Edward R. Murrow's television program “See it Now.”
Thus Truman was both in the ironic place of pleading such poverty that taxpayer retirement benefits were finally provided to the presidency while also pioneering a path for future presidents to make fortunes selling access to themselves (albeit through a fairly benign form compared to today). So what has that mutated into?
Influence Peddling Is The New Pension
As taxpayers continue to shovel money into the accounts of ex-presidents, it's becoming increasingly obvious that the original intention of the presidential pension—to ensure dignity of life for former presidents who do not want to sell out to private interests—has become virtually irrelevant.
One president who demonstrated this was Ronald Reagan. Shortly after leaving office, Reagan chose not to follow the path of former president Jimmy Carter, whose selfless humanitarianism rebuilt his global reputation, but rather to make a whole lot of dough. He gave “three or four speeches a month” to Fortune 500 speeches, and earned around $2 million giving just two speeches to firms in Japan, which at the time was a chief economic competitor of the U.S.
The Clintons, as mentioned earlier, took Reagan's approach to the next level. Less than two years after he ushered in the largest deregulation of Wall Street since the Great Depression, Bill Clinton made his first paid speech at Morgan Stanley in Feburary 2001, pulling in $125,000. The year his wife Hillary Clinton, then a senator from New York, voted for the bankruptcy bill that made it more difficult for struggling families to regain their financial footing, her husband pulled in hundreds of thousands of dollars from the finance industry pushing for the bill.
George W. Bush, whose presidency was an all-you-can-eat buffet for Corporate America, continued the tradition post-presidency. He has made more than $15 million since leaving office, giving paid speeches to, for one, tax dodger UBS. After his administration basically gave up on oversight of taxpayer dollars sent to for-profit colleges, W. was the industry's featured speaker at its Vegas convention in 2012.
Why Pay Rich Ex-Presidents?
Given that the original intention of the presidential pension has been completely undermined by the modern era of influence-peddling, you have to ask why we are paying any of these people pensions at all. Do multimillionaires Bill Clinton and George W. Bush really need millions of dollars from taxpayers for office space and living expenses when they can make that much doing a few speeches to Wall Street firms?
True, these funds are a drop in the bucket in the federal budget. But cutting them would have powerful symbolism. It would say that taxpayers are making a statement to ex-presidents: we told you you'd get a secure retirement if you didn't influence-peddle; you broke your end of the bargain, so hands out of our pockets.