Should Barack Obama or the next president get a raise?

President Barack Obama’s salary pales in comparison to the average CEO. But does the president really need a raise? The historical data says “yes,” but the potential big payoff for newer presidents says “probably not.”

In 2011, the average Fortune 500 company leader made $12 million a year. President Obama has a $400,000 annual salary, gets a $50,000 expense account, and a really cool house to live in. But he has to buy his own food in some cases.

The debate over presidential pay dates back to the Prohibition era, when people were shocked in 1930 when baseball star Babe Ruth was given a salary that paid more than President Herbert Hoover’s.

Ruth legendary response was, “So what? I had a better year than he did.”

President Obama’s compensation is above average compared with other world leaders, including the leaders of China, Russia, the United Kingdom, Mexico, and Germany. Many are not far behind, though, with compensation in the US$200,000 – $300,000 range. And a handful are paid much more; the leader of Singapore gets about US$1.7 million a year.

The U.S. Constitution outlines how the president can get a raise and lets Congress decide on the timing through legislation.

Article II, Section 1 says that “The President shall, at stated Times, receive for his Services, a Compensation, which shall neither be increased nor diminished during the Period for which he shall have been elected, and he shall not receive within that Period any other Emolument from the United States, or any of them.”

President Washington received a salary of $25,000 in 1789, which was a lot of money at the time. It’s difficult to estimate the current value; projections range from $300,000 to $4 million in current dollars (depending on the economic barometer). But Washington also had to cover most of his own expenses. Luckily, the father of our country was a wealthy landowner.

Since the time of President Washington, there have been five presidential pay raises, which were effective in the next presidential term after Congress passed them. For example, in January 1969, the outgoing president was Lyndon Johnson; the pay raise took effect when Richard Nixon became president.

Pay hikes came in 1873 ($50,000), 1909 ($75,000), 1949 ($100,000), 1969 ($200,000), and 2001 ($400,000).

The chief benefactors of those pay raises were the first presidents to receive them, since they weren’t as susceptible to inflation. So in current 2012 dollars, Ulysses S. Grant received $945,000 in 1873; William Howard Taft got a hefty $1.9 million in 1909; Harry S. Truman received $950,000 in 1949; and Richard Nixon got $1.2 million in 1969. President George W. Bush’s pay was not considerably higher due to inflation over the past decade. But he did see his pay double compared with President Bill Clinton’s salary in 2000.

Basically, because there is no cost-of-living adjustment, the presidents make less each year they are in office.

Contemporary presidents do have a big advantage over their predecessors when it comes to making money after they leave office, and that is where they’re more competitive with CEOs.

Until 1958, presidents didn’t receive a pension after leaving office. Today, a president receives an annual pension equal to the current salary of a Cabinet secretary (about $200,000 per year) when leaving the White House.

In a 2008 report, the Congressional Research Service said that the three former presidents at the time (Jimmy Carter, George H.W. Bush, and Clinton) were receiving between $518,000 and $1.1 million a year in benefits from taxpayers, including pensions, office space, transportation, and other expenses.

Presidents George W. Bush and Clinton also signed lucrative book contracts after leaving office.

Clinton, in particular, has made out well financially. He told CNN in 2010, “”I’ve never had any money until I got out of the White House. But I’ve done reasonably well since then.”

Clinton made $16 million by giving speeches soon after he left office in 2001. By 2010, the website 24/7 Wall Street estimated that Clinton’s net worth was $55 million, and he had made $125 million before taxes.

On the 2012 campaign trail, candidate Mitt Romney floated the idea of a compensation plan that would make the president and other politicians more like CEOs, using incentives.

“I wish we had that happen throughout government–where people recognized they are not going to get rewarded in substantial ways unless they are able to achieve the objectives that they were elected to carry out,” he said.

However, that could backfire on a president. For example, the CEO of Walmart, Mike Duke, makes about $17 million in total annual compensation. Walmart also had a $16 billion profit in 2011.

The federal government annual deficit for the same year was $1.3 trillion.

http://www.philly.com/philly/news/Sh...t_a_raise.html

You have to add the costs of vacations to his compensation along with pension and health care for life. I'm pretty sure most presidents end up R-I-C-H after office so this is a silly conversation. Oh yeah, he can also participate in insider trading.

Obama is paid plenty. And being President essentially guarantees job security for the rest of their lives. Congress on the other hand should take a pay cut.

Or perhaps most CEOs are making far too much beyond what they deserve?

The president and congress should only make minimum wage.

Originally Posted by Rhumb

Or perhaps most CEOs are making far too much beyond what they deserve?

You're comparing companies who derive their own profits through their work while competing amongst other companies who all want to be the best and a government that simply takes up taxes. There is no direct competition for our government or incentives to shine above the rest. Apples to oranges.

Most CEOs DON'T have the ability to make a million bucks doing a single appearance after they leave the oval office.

Originally Posted by casino is no lie

Obama is paid plenty. And being President essentially guarantees job security for the rest of their lives. Congress on the other hand should take a pay cut.

No, and No. And I also don't like the fact that Congress gets pay raises with their recent track record. That, and how they can vote on their own pay raises which is virtually unanimous.

Is this age of looming sequestration, deficits, etc, Congress voted to increase their pay. I guess no one would want to be a politician if it wasn't lucrative.

Originally Posted by Act of God

You have to add the costs of vacations to his compensation along with pension and health care for life. I'm pretty sure most presidents end up R-I-C-H after office so this is a silly conversation. Oh yeah, he can also participate in insider trading.

Most Presidents are set for life after their presidency. They have a pension, plus they earn money from any guest apperances, royalities from any books they publish, or whatever else they decide to do.

As far as insider trading goes, I know Congress used to do that, but recently (especially after that 60 minutes episode aired) passed a law/ethics reform called the Stock Act where it is illegal for Congress, the President, and Federal workers to do so: http://www.huffingtonpost.com/2012/0...n_1373081.html.

But who knows if that will stop them.

Perhaps their salaries should be set as some percentage of the national median wage--if they raise the average Joe's salary, then they raise their own. Prez might be 20x, VP 19x, on down the line.

As in the private sector, ought you not attract and pay for the best talent?

For the job that they do, they do get underpaid IMO.

Originally Posted by Zell

For the job that they do, they do get underpaid IMO.

No

The job is not about money. Being President is the ultimate dream job for certain types of people out there.

They live on the taxpayers' dime while in office. And they have a ballin' ass pension and command ridiculously high speaker fees when they leave office. No need to boost their salary.

Originally Posted by 2000_328CI

Most CEOs DON'T have the ability to make a million bucks doing a single appearance after they leave the oval office.

Most CEO's don't need to make money doing appearances after they've socked away the millions they've reaped from raiding corporate coffers, golden parachutes and lavish if Byzintine compensation packages into obscure offshore bank accounts and other tax havens.

Originally Posted by Rhumb

Most CEO's don't need to make money doing appearances after they've socked away the millions they've reaped from raiding corporate coffers, golden parachutes and lavish if Byzintine compensation packages into obscure offshore bank accounts and other tax havens.

You sound so grumpy and spiteful. Be happy with what you have

I think that's pretty reasonable money for being the president. Maybe a bit on the low side, but I'm sure the job covers a lot of expenses.

No.

Originally Posted by Zell

For the job that they do, they do get underpaid IMO.

Originally Posted by bimmerfan08

No

What are you getting at bf?

Originally Posted by badfast

What are you getting at bf?

Like others have said. Look at the grand scheme of things. A healthy pension every year for their lives, book contracts, speeches, medical coverage, staffers, security, and sometimes a travel budget. Not to mention all of the perks and amenities while in office. At the expense of taxpayers of course.