Saturday , June 23 2018

Salary and Benefits of US President

Salary and Benefits of US President

The President of the United States of America is considered as the most powerful man on this planet. It is not a power that the President snatches away but is something he receives when he gets unanimously elected after a Presidential election. Have you ever wondered what kind of money the US President makes? What kind of benefits he receives? What kind of retirement benefits he gets post retirement? What is the extent of expenses that is given to the President apart from the salary he earns? In this article, we are going to find answers to all these questions. Guess what? It is one of the most lucrative jobs in the world but unfortunately, it is not open to all and the job opening comes only once every 5 years.

Salary and Benefits of US President

Anyway… let’s not deviate and find out the answers to the questions we have asked above. But, before we start answering those question, let us take a look at what really being the President of the United States means. We mean, let us take a look at the powers that an US President enjoys.

Powers of the President of the United States of America

The US President is the head of State. He is unanimously elected through elections. He heads the government of the country and is responsible for directing federal government’s executive branch. Not just that, the US President is also the Commander-in-Chief of all Armed Forces of the country.

He is the world’s most powerful official who is elected by open voting. And, being Commander-in-Chief of US Armed Forces, being the head of the state and being the chief executive of the nation, the US President enjoys job benefits which are considered to be the best in this world. From salary to retirement benefits, the US President enjoys perks which are unmatched. So now, let us take a look at the benefits he enjoys. Let’s start with his salary.

Salary of the US President

Even the President is an employee of the government and hence, he receives salary. The question is, how much? Well, that is a staggering $400,000 per year. Yes, that is the Presidential salary as of this day. It wasn’t always at $400,000 a year. This current figure has come after several corrections were made to the salary amount over the years.

Okay, now that’s the salary of the US President but what about the First Lady? How much does she earn? It is… $… guess, guess, guess… well, it is ZERO. The First Lady of USA doesn’t get paid. Not even a single dime.

Hold on! If you think $400,000 is all that the US President earns, you are wrong! Though not directly paid as salary, the US President gets various expense accounts, which are borne by the government or better said, tax payers of the country.

Here are some of the expenses that the US President receives:

  • $50,000 as general expenses account.
  • All official expenses for the office in White House.
  • Various entertainment expenses.
  • In case of Presidential functions which are official, separate entertainment expenses are provided.
  • President enjoys free limo rides, free airplane rides and free helicopter rides. Apart from these expenses, if the President is traveling somewhere and is accompanied by others, the government bears those expenses as well.
  • There is an ‘unanticipated needs’ account with a cap of $ 1 million every year. These ‘unanticipated needs’ include a number of things like the President’s needs for various services, personal needs, furtherance of defense, security, national interest etc. In case what has already been provided to President in form of salary, general expenses, entertainment expenses, travel expenses etc. falls short for the President then, he can start using the ‘unanticipated needs’ accounts.

Now, in case you have a notion that the income of the US President is same as his salary then you are gravely mistaken. These two are different. For example, the last President of United States – Barack Hussein Obama had a salary of $400,000 however, he used to earn $790,000 a year back in 2011. His earnings came from royalties that he earned from the books he wrote and also the earnings he had from his investments. So, salary and earnings or total income are different.

Change in US Presidential Salary Over Time

Since the time of first President of USA till today, the Presidential salary of the country has changed 5 times in total. It has always been an upward revision. However, there are some interesting facts about the salary of the President in USA. Let us take a look at those facts quickly in a tabular fashion.

Fact 1 The first President of USA, George Washington had a yearly salary of $25,000. He became President in 1789.
Fact 2 George Washington however did not accept the executive salary.
Fact 3 The only other President of USA who did the same, that is declined the salary, was John F. Kennedy.
Fact 4 Another President, Herbert Hoover did take the salary that was offered but instead of keeping the money, he decided to donate all his salary earnings for charitable purposes.
Fact 5 US Presidential salary went through 5 upward revisions since 1789.
Fact 6 General Expense account in Presidential salary was introduced only in 1949. Prior to that, there was no such account. The only money the President received was the salary.
Fact 7 The last upward revision that took place in Presidential salary was in 2001 when the Congress directly doubled the salary of the President from $ 200,000 to $ 400,000.
Fact 8 The current salary of the US President puts the President among 1% of US people who are considered as top earners. This does not include the expense account and other monetary benefits the US President receives.
Fact 9 George Washington and Thomas Jefferson were two richest people who became the President of the United States of America.
Fact 10 The first US President to receive the current salary was George W. Bush.
Fact 11 If we account for inflation (taking the 1913 inflation calculator, which is the oldest allowed), George Washington’s salary was actually $600,000 in today’s date.
Fact 12 In 1949 when Harry Truman completed his term as President, the last salary that he drew was $ 100,000.
Fact 13 In 1969, Richard Nixon took the office and that’s when the salary of the President was revised to $ 200,000 a year.

Now let us take a look at the Presidential salary revisions that took place in US history.

Year Presidential Salary Presidential Salary Equivalence in 2012 Expense Account for US President
24th September, 1789* $ 25,000 $ 673,451 0
3rd March, 1873 $ 50,000 $ 992,777 0
4th March, 1909 $ 75,000 $ 1,954,850 0
19th January, 1949 $ 100,000 $ 967,315 $ 50,000
20th January, 1969 $ 200,000 $ 1,254,610 $ 50,000
20th January, 2001 $ 400,000 $ 519,979 $ 50,000

Isn’t that the type of salary you will want to earn?

The US President is Allowed to Hire

The US President needs to hire? Doesn’t that sound weird? That is true. Despite the fact that there are official positions already in Federal Government’s Executive Branch, who are answerable to the President and work directly under him, the US President can actually hire more people if he wants. However, there is always a cap on the number of people he can hire and use. So, just how many people can he hire? Here is the quick list that will give you the necessary information you seek.

Number of people that can be hired by US President Purpose of the hiring
34 For administration purpose and domestic services.
Unlimited Consultants, experts and professional on a temporary basis – that is only for 1 year or less.
100 assistants For the Office in White House
3 people For working only and only at executive residence.

Do note that these people that the President hires get paid by the government. The President doesn’t need to spend any money for them.

Does the President Bear Any Expense While at White House?

You may have a general tendency to think that the President will not have to pay a single dime. He is the most powerful man in this world and the government of USA will bear all his expenses! You are plain wrong. There are several expenses that the US President has to bear on his own while being in White House Office. Let us take a look at the expenses that the US President will have to bear for the White House Office.

  • The President or his family (henceforth referred to as First Family) need not pay a single dime as rent for the White House Office. However, the President needs to pay for all the personal expense of his and his family. If the President and the First Family decides to live in White House for 8 years, the expenses will increase manifolds and that too, very quickly.
  • There is an executive chef who will prepare anything that the President wants to eat and nothing will be charged for that. However, if any or all members of the First Family eat anything that is served out of the kitchen, the President has to pay for that. That’s true even in case of personal guests that the President may have.

Interestingly, the President and the First Family is actually allowed to pick up things of their choice. For example, they may ask for a specific brand of toothpaste. They may ask for a specific type of snack for the evening or they may order a specific menu for dinner. They may order bath towels of specific brand and color. They are just free to select. However, these things will have a price tag and it is usually way higher than what the President on the First Family thinks.

Gary Walter – the chief usher of White House told National Geographic in an interview that he did not come across a single First Family which didn’t complain about pricey food at White House.

When each month ends, it is the duty of the usher to hand over the bill to the President. The bill is itemized and every single thing is clearly mentioned in it such as:

  • Laundry expenses
  • Toiletries
  • Toothpaste
  • Dry cleaning
  • Meals
  • Clean up crews
  • Waiters etc.

In 1981, Nancy Regan received her first bill when Ronald Regan was the President and she was so surprised that she said that no one ever told her that the President and the First Lady will be charged for each and every meal they eat and every personal thing they use.

So, the bottom line is that President of USA will not enjoy everything for free. There will be many expenses which will actually multiply way too quickly for the President or the First Family to even realize. So, by the end of the term of a President, the likelihood of the President retiring with a massive debt is very high. There is no need to laugh. This has actually happened in the past. Here are some incidences:

  • In 1825, the then President of USA, James Monroe left office with a massive debt.
  • In 2001, when the Clintons left the office, they accrued a massive debt which ranged anywhere between 2.28 million dollars and 10.6 million dollars. This huge debt was caused by designer dresses, private parties and other expenses. Apart from that, a majority of the debt was because of the massive legal fees that was paid by the government because of their misdeeds.

So, even after being paid so handsomely, the President of USA can actually retire with a massive debt and it might be a serious problem.

What Are the Retirement Benefits for the US President?

When we say retirement benefits, we simply mean pension earnings. This pension thing was not available till 1957. In 1958 however, the US Congress passed an act known as the ‘Former Presidents Act’. This act brought in the benefits that today the ex-presidents of USA enjoy. Prior to this act, the former Presidents of USA were given no benefits at all. The result was that they often had miserable lives after they retired. For instance, James Monroe died extremely poor. Similarly, Thomas Jefferson ultimately sold off his personal library which laid the foundation of Library of Congress.

After the Act was passed in 1958, things changed. Starting 1959, all previous Presidents who were alive were given three things – one office, one staff and pension. The pension that is given to former US Presidents has actually been increased many times with approval from US Congress.

As of now the former Presidents receive pension equivalent to the salary of the cabinet secretaries of the ruling administration. In 2012, the pension of the former US President was $199,700 annually. As of today, the former US Presidents earn a pension of $ 191,300 every year.

It is weird but true, the total amount spent for the former Presidents actually stands up to millions of dollars every year and all this money is actually paid out of the pockets of the tax payers. If we consider each former President individually, the total amount they received or will receive during their lifetimes actually add up to millions. For instance, Ronald Reagan received $ 2 million as pension and other benefits. Similarly, Bill Clinton received $ 1 million in 2012 in form of pension and other benefits. That is a huge burden on the US tax payers but that’s how it works in the United States.

Now, pension isn’t the only benefit that a former US President earns. Here are some of the additional benefits that are provided to the former US President:

  • For any non-political correspondence, the former President can use the postal services totally free of cost.
  • An office space is given to the President, which is also free of cost.
  • The former President receives a sum of $ 96,000 a year which is meant for paying any staff member he hires for office help.
  • After the term of a President expires, the former President will receive a sum of $ 150,000 for first 30 months. This amount is meant for hiring someone who will help him with the transition.
  • In case the former President dies but his wife remains alive, the wife will be entitled to get a lifetime pension of $ 20,000 annually and the postal service will still be available for free of cost.
  • As if that wasn’t enough, the country also bears the expenses for personal protection of the former Presidents and their families.

How Much Did Former US Presidents Earn Through Speeches and Writing Books?

Now these two are pretty lucrative fields for the US Presidents. Once they retire, they can earn a lot simply by writing books (if they can) or they can simply give speeches. Many former US Presidents have actually earned millions through these channels. Speeches work better than books because they have less effort involved and gives big earnings. For instance:

  • Immediately after Bill Clinton left the office, Greater Washington Association of Executives came forward and hired him for a speech. How much did they pay him for a speech? $ 125,000! That’s incredible. It turned out since 2001, Bill Clinton has actually earned $ 75.6 million simply by giving speeches. Hillary Clinton had to give this disclosure.
  • Similarly, George W. Bush made around $ 15 million simply by giving speeches ever since he has retired from the Presidential post.

Books aren’t that bad either and they can make some good money provided a former President can write or can hire someone to write for him. Let us take as some of them:

  • Bill Clinton’s ‘My Life’ managed to earn $ 15 million in advance.
  • ‘Decision Points’ from George W. Bush managed to make $ 7 million from 1.5 million copies sold.
  • Jimmy Carter retired broke but ended up writing 14 books. That man made a fortune from that.
  • Former President Barack Obama wrote this book titled ‘Dreams from My Father’ when he was in his early 30s. It has moderate success at the beginning but as he worked his way up the political ladder and landed himself as President of US, the book gained tremendous popularity. As of today, the book remains his primary earning source.

What Type of Protection Does the US President Receives?

The US Secret Service is responsible for giving protection to the US President, the First Lady and the First Family as a whole. However, this protection is given only to the sitting President.          Even immediate family members of the President and highly important people related to the President also get the protection from the US Secret Service. Specific locations and people under the protection of the US Secret Service are actually assigned code names. Previously when electronic data lacked proper digital encryption, the code names were used for proper secrecy. However today, the code names are merely used to keep the tradition alive and also for maintaining some clarity. The US Secret Service is responsible for investigative every incident that threatens the sitting President of USA.

What Benefits Do US Presidents Get When They Travel?

For sitting US Presidents, traveling is all about luxury and protection. The President may travel by air or by land. There are different options for each mode of travel.

Travel by Land: When the President travels by land, he gets the Presidential Limousine. It is heavily customized and comes with state of the art luxury. The price of the car is $300,000. It comes with 12.7 cm thick armor plating and has heavy doors which weigh as much as the doors of Boeing 757. Tyres are capable of staying operational even when they are punctured. There is a blood bank inside the car and there is a separate oxygen supply in the car as well. There is also a system for fighting fire. Not just that, the car is capable of shooting smoke grenades and tear gas. The nickname of the car is, ‘The Beast’.

Travel by Air: For Short Distance, there is helicopter. The Presidential helicopter is known as Marine One. Actually, there are 35 helicopters of U.S. Marine Corps that are made available for the President. These helicopters have different model. Whichever helicopter the President boards is named as Marine One. Whenever the President is travelling, 5 helicopters will be flying at once which keep swapping positions to maintain a disguise for the President so that all possible threats can be mitigated.

Travel by Air: For Long Distance, there is Air Force One. It is basically a heavily modified Boeing 747. It is highly luxurious with separate dining room conference rooms, etc. There are separate quarters for First Lady and the President. There are medical facilities, press area etc. In total, Air Force One carries 70 passengers and 26 crew members. The modified aircraft is actually known as Boeing VC-25. There are two identical aircrafts. For in-country travels, only one aircraft is used but when the President needs to travel abroad, both the planes fly. One remains as a backup in case the first one gets damaged or is attacked. It may happen that the President travels in a civilian aircraft. Under such a situation, the aircraft will actually be called as Executive One.

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