After two terms in the White House, I’m sure President Obama is enjoying his first few days off. But at age 55, I’m not sure he’ll be ready to fully retire yet.
Either way, he’ll collect a pretty generous retirement package for his eight years of work. The presidential pension kicks in immediately and regardless of age.
By law, the annual amount is equal to the pay received by the head of an executive department, such as a Cabinet secretary.
This year, the figure is $207,800. And it will probably continue rising every year because Cabinet secretaries have generally seen their salaries keep pace with changes in the Consumer Price Index.
|The U.S. Consumer Price Index gained about 19.5% over the past decade.|
It’s kind of ironic, actually.
At one point during his presidency, Obama said he wanted to cap the total value of regular Americans’ tax-advantaged retirement accounts once they had the potential to produce more than $205,000 a year in income.
Yet his own presidential pension will be worth more than that amount in just his first year out of the White House.
And really, once we add in all the other benefits beyond the pure pension payments, things really start to add up.
First, “transition expenses” for a president’s first seven months after leaving office.
This extra money covers office space, staff compensation, phone bills, postage, and other costs of the transition.
How much are we talking here?
Well, during his fiscal 1993 transition, George Bush used $907,939!
And that number seems in line with the amounts used by other presidents, too.
Second, additional staff and office allowances for life.
Six months after a president leaves office, they start getting additional funds for a staff — a maximum of $375,000 for the first 30 months and then $96,000 a year thereafter.
If Obama lives to 86, that would be almost another $3 million in extra bennies!
And former presidents can also continue getting reimbursed for their offices, supplies, phone bills, and other items.
In 2009, for example, Bill Clinton’s office in Harlem cost taxpayers $516,000.
Third, lifetime protection from the Secret Service.
This was a benefit from 1965 through 1996. And although it became limited to 10 years for presidents inaugurated in 1997, President Obama signed legislation that reinstated lifetime protection for himself, George W. Bush, and all future presidents.
It’s worth noting that Richard Nixon gave up his protection in 1985. So far, he’s the only former president to have ever done that.
It’s also worth noting that although “protection costs for former presidents are not publicly disclosed by the Secret Service for reasons of security,” one estimate from The Daily Mail pegged the value at $20 million a year!
Fourth, medical coverage.
All former presidents, along with their wives and children, can get medical treatment at military hospitals at rates that are set by the Office of Management and Budget.
In addition, two-term presidents can get health insurance under the Federal Employees Health Benefits program.
And yes, all former presidents can also have a library established in their names and managed by the National Archives and Records Administration.
|Image credit: The Ronald Reagan Presidential Library, where President Reagan and his First Lady Nancy Reagan are buried.|
So Although a Commander in Chief Definitely Deserves Something … We’re Talking About a Total Package Worth Millions a Year!
Even the most-generous retirement plans (private or public) don’t kick in until a person has reached a certain age … and they rarely vest after just four years on the job.
There aren’t many people who receive six-figure annual pensions, either.
But in no way am I saying a President of the United States doesn’t deserve a better-than-average package.
Heck, the position’s current $400,000-a-year base salary is less than some middle managers make at Fortune 500 companies!
It’s the other stuff that gets ridiculous — all the extra millions in offices, expenses, staff allowances, security details, and more.
Heck, even though President George W. Bush loved to talk about government waste, he had no problem using his retirement expense account to rack up more than $80,000 in annual phone bills.
I guess nobody in Washington has ever heard of an unlimited cell plan!
Anyway, why should we care about this stuff at all?
First, because it’s our money that pays for these things.
And second, because it further demonstrates the problem with having people create laws that will never affect them in any meaningful way.
It wasn’t always this way, of course.
When Harry Truman left office, all he got was his small pension from the Army!
Since then, we’ve gone to the other extreme: Lavishing millions of dollars in yearly perks on our politicians even as they leverage their celebrity to build personal fortunes by writing books, making speeches, and serving as corporate advisers.
Congress actually passed a law last year that looked to address this situation, but Obama vetoed it.
It would have set the presidential pension at $200,000 a year and capped additional expenses at another $200,000 a year.
Future increases to these amounts would have risen at the same rate as Social Security’s COLAs.
|Data source: Social Security Administration|
Plus, the benefits would have disappeared dollar for dollar with amounts earned by a president above and beyond the $400,000 mark.
In other words, once a president earned $800,000, taxpayers wouldn’t be paying anything in pension or other benefits.
Whether Donald Trump ends up signing a re-submitted law like this remains to be seen.
But either way, this should give us all something to think about the next time ANY U.S. president — past, current, or future — claims to understand what it’s like for regular Americans to worry about their retirements.