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July 3rd, 2022

Insight

Billionaires and multimillionaires don't need a government pension

Jeff Jacoby

By Jeff Jacoby

Published Jan. 28, 2021

Billionaires and multimillionaires don't need a government pension
Donald Trump is the only billionaire in the tiny fraternity of former presidents, but all the others are multimillionaires. Does it make sense to lavish taxpayer money on retired presidents when they have so much of their own already?


As you may have heard, things haven't been going well for Donald Trump. He lost the election, he was impeached a second time, and as he vacated the White House his disapproval rating reached an all-time high. Worst of all from Trump's point of view, perhaps, is the steep decline in his net worth: According to Forbes's ranking of the 400 richest Americans, Trump's wealth fell by an estimated $600 million since September 2019, leaving him with only $2.5 billion. Sad!

But the former president can take comfort in the knowledge that the American people won't abandon him to destitution. They don't have a choice: Under the Former President Act, Trump is entitled to immediately begin collecting an annual pension — currently $221,400, increasing yearly — plus hundreds of thousands of dollars in annual staff and travel allowances. The law also directs the federal government to establish and furnish a "suitable" office at "such place within the United States as the former President shall specify." There is no ceiling on how much taxpayers can be required to spend to rent office space for an ex-president. If Trump locates his office in midtown Manhattan, taxpayers may be on the hook for millions.

By a wide margin, Trump was the wealthiest president in US history. As of last week, he is the wealthiest of the ex-presidents as well. He's the only billionaire in that tiny fraternity, but all the others are multimillionaires. Does it make sense to lavish taxpayer money on retired presidents when they have so much of their own already?

In recent decades, presidents have begun amassing fortunes as soon as they leave the White House. It raised eyebrows when Barack Obama pocketed a $400,000 speaking fee from a Wall Street investment firm, but that was pocket change compared the earnings to come. In a joint deal with Penguin Random House, the 44th president and his wife, Michelle Obama, were paid a $60 million advance to write their memoirs — "the highest advance ever paid in the history of book publishing," the publisher boasted. Both books, her Becoming and his A Promised Land, were smash bestsellers, a testament to both the star power and earning potential of ex-presidents.

Within a year of leaving office, Bill Clinton had received $13.7 million, mostly for speeches that paid an average of over $200,000. By 2015, according to CNN, he and Hillary Clinton had banked more than $153 million. "I was one poor rascal when I took office," Bill Clinton said in 2009, "But after I got out, I made a lot of money."

They all do.

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George W. Bush looked forward to the cash he would rake in as a former president. "I'll give some speeches, just to replenish the ol' coffers," he told the New York Times in 2007 (which noted that Bush's net worth at the time was about $21 million). "I don't know what my dad gets," Bush continued, but "it's more than 50 to 75" thousand dollars per speech, and "Clinton's making a lot of money." When the time came, Bush didn't hesitate; he hit the corporate speaking circuit, where he "makes millions but few waves," as Politico later reported.

Years earlier, the first President Bush voiced no criticism when his predecessor, Ronald Reagan, was paid millions of dollars in speech fees and a publisher's advance shortly after leaving the White House.

Within months of leaving the White House, Barack and Michelle Obama were paid $60 million to write their memoirs — the highest advance ever paid in the history of book publishing.

"I expect every president has written his memoirs and received money for it," George H. W. Bush said at a press conference. "I think there's been a long history of that. And I don't think it's ever been challenged as inappropriate."

He was wrong. For most of US history it was considered improper for former presidents to cash in on their fame and connections. Calvin Coolidge refused lucrative endorsement offers and Harry Truman spurned invitations to lend his prestige to commercial ventures. Indeed, it was Truman's dire financial straits that prompted Congress to pass the Former Presidents Act, with its lifetime pension and other perks to protect ex-presidents from penury. Since 2000, the handful of former presidents have received $85 million under the act.

But expectations have shifted dramatically, and the law should, too. It is now taken for granted that former presidents will cash in. So be it. But taxpayers should no longer have to bestow even more money on fabulously wealthy ex-presidents. Legislation to reform the Former Presidents Act has been introduced in Congress, so far without success. Perhaps that will change, now that the richest ex-president of all is getting in on the act.

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