Memo to future presidents: Bring extra cash
As President Barack Obama prepares for his second Inauguration, one has to wonder why an economically rational person would even want to run for president. Throughout history, presidents and their families have found that on a personal level, it is extremely expensive. This is why almost all of our recent presidents and candidates have been men of means.
We have not had a poor president since Harry Truman, whose modest circumstances were the inspiration for legislation granting a lifetime pension for retired presidents. Bill Clinton and Gerald Ford were not rich by Mitt Romney standards, but they were certainly comfortable. Even though Clinton’s annual salary as governor of Arkansas was quite small — a mere $35,000 — his wife was a well-compensated partner at the Rose Law Firm. These examples aside, presidents are now far more likely to be part of the 1 percent than anywhere near those in the 99 percent: Think of Franklin D. Roosevelt, John F. Kennedy, both Bushes and Ronald Reagan. One reason is the office’s prohibitive cost.Continue Reading
This phenomenon of presidential cost dates to George Washington. At the Constitutional Convention in 1787, Benjamin Franklin recommended the president serve without salary but be reimbursed for expenses incurred while in office. When the new government was established, Congress rejected Franklin’s proposal, and the president was instead given a salary of $25,000 — the equivalent of approximately $1.1 million today. When Washington became president, he asked for but was denied permission to serve in an unpaid capacity.
The denial was a good thing for Washington’s bottom line. Washington ended up spending an additional $5,000 per year out of pocket on expenses beyond the congressionally allocated salary. His successors had similar experiences. Thomas Jefferson owed $20,000 after leaving the White House — although he was always a profligate spender — and James Monroe spent $30,000 out of pocket as president. The “era of good feelings” designation usually applied to Monroe’s presidency apparently did not apply to his bank account.
Despite the office’s nearly regal trappings, presidents have long sought to remain men of the people and have been wary of incurring embarrassingly high expenses for what could be seen as personal needs while in office. In 1825, John Quincy Adams, who was on political thin ice after his narrow and controversial 1824 victory over Andrew Jackson, felt obliged to pay $61 out of pocket for a pool table for the family quarters, an expense that had originally come out of the White House furniture fund. It didn’t help, as he lost his electoral rematch with Jackson in 1828.