Obama's Perks: Private Jet, Chef Tax-Free
The President Gets $400,000 a Year Plus Plenty of Freebies
By SCOTT MAYEROWITZ
ABC NEWS Business Unit
Feb. 5, 2009
America's CEOs are coming under fire these days not just for their hefty salaries but also for their use of private jets, limos with drivers and free trips to posh resorts.
But they aren't alone in living this lavish lifestyle -- the president of United States gets all these perks and more.
And unlike some of his Cabinet appointments, he doesn't have to pay taxes on these benefits.
It might be a bit of a stretch to compare today's corporate titans with the commander in chief, but some Wall Street bloggers clearly upset with President Obama's attempts to rein in executive pay are doing just that.
"Some accountability needs to be put in place. We won't have them kicking sand in the face of taxpayers any longer," said one private equity worker on Dealbreaker.com, a Wall Street gossip site and blog.
The president makes $400,000 a year, but hasn't received a raise from Congress since 2001. He also gets a $50,000 annual entertainment expense account (any unused money at the end of the year must go back to the Treasury.)
Then there is the use of two private jets, Boeing 747s better known as Air Force One. And of course the constant security details, drivers, a private chef, a country vacation estate and the rent-free use of a well-known, 132-room mansion called the White House.
The president also used to have a yacht, until Jimmy Carter sold it.
But not everything is a freebie for the president and his family.
The Obamas have to pay for all their own groceries, drinks, dry cleaning and even their toothpaste. All of those personal items get taken out of his salary. Granted, the private chef then prepares dinner using those groceries.
The president's salary and perks have come under the spotlight since Sen. Claire McCaskill, D-Mo., introduced a bill that would cap annual executive pay at companies receiving government bailout money at $400,000.
Corporate America quickly pointed out that while the president also only makes $400,000 a year, he gets all sorts of extra perks and doesn't have to pay taxes on them.
Presidential Vacations 'Part of the Job'
If a CEO borrows the company jet to go on a private vacation, he or she might not be charged by the company for the perk, but they do have to pay income taxes on the value of such a flight.
For the president, it's a different story.
It's hard to say that Air Force One and all of the president's support staff should not travel with him, even on vacation, especially in the post-9/11 world, said presidential historian and ABC News consultant Richard Norton Smith.
"Certainly, if the president goes on vacation, it's part of the job, because the president never goes on vacation," Smith said. "I don't you think you can legitimately argue against the communications and everything else that travels with and surrounds a president."
(If the president adds a fundraiser into a trip, that portion of the expenses is typically paid back through the campaign.)
Ed Rogers, who was deputy assistant to the president and executive assistant to the White House chief of staff for George H.W. Bush, agreed that there's a difference between the president and a company CEO.
"The presidency is a full-time job in the 24-hour sense. He must function and be able to function as president all the time," Rogers said. "The chairman of any corporation in America can kick back for a weekend and the potential downside is not that severe. The notion of the president being out of pocket would be appealing to our enemies and dangerous to our republic."
Rogers mentioned a few other nice perks of being in the White House, including movie studios delivering you copies of their latest films, instant communications with anyone in the world and a pretty nice view from your windows.
"It's a good job in that regard," he said. "Unfortunately it does come with a lot of stress and responsibility that diminish the opportunity to enjoy the fact that hey, I've got this nice big airplane."
Living in the presidential bubble also creates a very "surreal experience," Rogers said. For instance, Bush and Ronald Reagan never carried any cash.
One time, when traveling with Reagan, Rogers said, "we went to a McDonald's and somebody gave him a $50 bill. He looked like he didn't know what to do with it."
Living in the White House also leaves a paper trail.
President: Only Five Pay Raises in 220 Years
"[President Ford's son] Steve Ford, right when they moved into the White House, told his dad he was going to turn in early one evening," Smith said. "The next morning, the president asked him how was his evening. He said fine. It turned out that the president had been given an invoice for the food that Steve and his partying friends had consumed, figuring that nobody would know."
Back when George Washington took office in 1789, the presidential salary was $25,000 -- that's more than $300,000 in today's dollars. Since then, there have only been five increases in the presidential pay, albeit pretty big ones. When Congress does increase the pay, it tends to double it, which leads to some pretty interesting results. For instance, George W. Bush made roughly twice what Bill Clinton made and Richard M. Nixon made twice what Lyndon B. Johnson made.
Stephen Hess, a senior fellow emeritus at the Brookings Institute and a veteran staffer of the Eisenhower and Nixon administrations and an advisor to Presidents Ford and Carter, was shocked anybody would even consider that the president "shouldn't have a private plane or should somehow pay taxes on it."
"The idea of letting the President of the United States out without that degree of security is bizarre," Hess said.
"I can't think of any perk that I would consider taxable when it has to do with handling the most important, often the most secure, business of the United States," Hess added. "We don't pay the president a great deal of money."