Paying the president

Who's the boss?

Benjamin Franklin thought officers of the federal government should not be paid. He warned the constitutional convention of 1787 that salaries for the president and lesser officials would attract the wrong sort of men—men who sought positions not from a feeling of republican duty but from a desire for personal gain. To be sure, Congress might initially set salaries low. But because the members would be voting on their own pay, the temptation would ever exist to raise the salaries. Better to keep money off the table entirely.

The convention declined Franklin’s counsel. Most delegates lacked Franklin’s wealth. They all lacked Franklin’s age. Many couldn’t afford not to be paid for their time in government service. They had wives and children to support. They didn’t want a government consisting solely of the rich.

George Washington was of Franklin’s mind in principle. Practice was a different matter. When Washington had accepted command of the Continental Army in 1775, he had eschewed a salary. He was doing his duty, he said. He asked only to be reimbursed for his expenses. The Continental Congress agreed, with members feeling confirmed in their belief that this honorable soldier was the right man to lead the republican army.

For a time both sides liked the deal. When the Continental Congress, lacking the authority to compel the states to furnish money to the cause, was slow paying its bills, Washington didn’t have to worry that he wouldn’t get his paycheck. For the Congress, no salary for Washington meant one fewer bill to pay.

But when Congress received Washington’s account of expenses at the end of the war, the total came as a shock. Washington wasn’t a spendthrift, but running an army wasn’t cheap. Moreover, the Articles of Confederation hadn’t given Congress any greater taxing powers. Any bill was hard to pay.

This experience was in the collective memory when Washington was elected president. The Constitution specified that the president and other office-holders would be paid, and it gave the new Congress authority to tax to acquire the means to do so. But Congress hadn’t decided on salaries by the time Washington was inaugurated in April 1789.

Washington expected to repeat the arrangement he’d had with Congress during the war. “When I was first honored with a call into the service of my country, then on the eve of an arduous struggle for its liberties, the light in which I contemplated my duty required that I should renounce every pecuniary compensation,” Washington said in his inaugural address. “From this resolution I have in no instance departed, and being still under the impressions which produced it, I must decline as inapplicable to myself any share in the personal emoluments which may be indispensably included in a permanent provision for the executive department.” As before, he asked merely to be reimbursed for “such actual expenditures as the public good may be thought to require.”

Congress declined the offer. Some members were uncomfortable relying on the president’s judgment as to what expenses were necessary. Some pointed out that any oversight or auditing of the president would jeopardize the separation of powers that was a fundamental principle of the new government. The result was a law passed five months later setting the president’s annual salary at $25,000. Washington was allowed “the use of the furniture and other effects now in his possession, belonging to the United States.” Congress had previously agreed to furnish Washington’s rented house in New York, where the government was meeting. But this package would be his “full compensation.” Expenses would come out of the salary or from Washington’s own pocket.

The salary was generous for that era. It was five times what the vice president received, and seven times what the secretaries of state and the treasury earned. It was high enough to attract talented men who weren’t independently wealthy.

And, what was most important to many who voted in favor, it was high enough to make the president treat the office as a full-time job. The Constitution forbade a president, during his time of office, from collecting any other government pay. “He shall not receive within that period any other emolument from the United States or any of them”—the separate states. Yet it didn’t forbid a president from making money in the private sector. Washington was a planter. His plantations would continue to generate revenue while he served as president. John Hancock was a merchant and investor who might become president. His investments would continue to produce income. This kind of situation was unavoidable.

But the supporters of a generous presidential salary wanted to ensure that side gigs not distract a president from the job he was elected to do. John Adams, the vice president and quite possibly Washington’s successor, was a lawyer. He shouldn’t have to try cases while president in order to keep Abigail and the family supported. The basic point was that a president should remember who he worked for: the American people.

The legislated arrangement served this purpose. Some presidents over time complained that they left office poorer than they entered it. The expenses of being president grew while the salary did not. The salary stuck at $25,000 until after the Civil War, when it was raised to $50,000. It went to $75,000 in 1909, where it remained for four decades. In 1930 a reporter observed to Babe Ruth that he had made more money the previous year than Herbert Hoover. Did Ruth have an explanation? The home run king, reflecting on the declining condition of the economy, replied, “I had a better year than he did.”

In 1949 the president’s salary was increased to $100,000, and an expense account of $50,000 was added. After inflation became a regular feature of the American economy, the salary jumped to $200,000 in 1969, and $400,000 in 2001, where it remains. The expense account has been increased to include travel and entertainment.

By and large, presidents have been content with their salary. They’ve looked on the presidency as an opportunity to fulfill their political ambitions but not to fill their bank accounts. During the last few decades former presidents have made millions of dollars on memoirs and speeches. Some of their fellow citizens have thought this unseemly, but most Americans appear to believe that once presidents are out of office, their income is their own business.

Donald Trump is challenging accepted practice in this area as in others. Trump has refused to publish his tax returns and to reveal where and how he makes money. Some of his money-making ventures are quite open. Just before reentering the White House, Trump and his wife launched meme coins—$TRUMP and $MELANIA—that soared in value, earning them billions of dollars on paper.

Neither the Constitution nor statute forbids this. Trump’s supporters seem unfazed by his capitalizing financially on his political success. Many of them admire him for it.

Yet skeptics raise the question debated by the first Congress in setting the first presidential salary. Who is the president working for? Will he serve the public’s interest or his own?

Trump and his supporters might well answer that the two are the same. The skeptics rejoin: Let the American people decide for themselves. Let them see the sources of the president’s income.

No change will happen while Trump is president. Possibly his new practice will become the norm.

But don’t be surprised if the pre-Trump standard is reaffirmed, perhaps strengthened, after he leaves. Republicans aren’t intrinsically less sensitive to conflicts of interest than Democrats. Almost eight decades ago the two parties came together to codify another informal practice that also dated to George Washington’s time. The 22nd Amendment was a direct response to Franklin Roosevelt’s breaking of the de facto taboo on third terms.

Whether it would take a constitutional amendment, a statute or new party rules, presidents and candidates for president might be required to publish their tax returns. Bills have been introduced in both the Senate and the House of Representatives to this effect. They’ve gone nowhere because Republicans have interpreted them as targeted against Trump, as indeed they are. But once Trump is gone, and with any then-current incumbent grandfathered in, as Harry Truman was by the 22nd Amendment, such a bill might become law.

Its constitutionality will be challenged. Congress doesn’t typically get to dictate to presidents. But the mere exercise might reaffirm the old norms, if only still informally.

On the other hand, maybe the old norms are broken for good. Or for bad. We’ll see.