There are four living ex-presidents, and in a year’s time there could be five: Jimmy Carter, George H.W. Bush, Bill Clinton, George W. Bush, and Barack Obama. Under a bill the House passed in January and the Senate passed out of committee in February, taxpayer-funded pensions for ex-presidents would be significantly curtailed — potentially even eliminated.

The current law is the Former Presidents Act of 1958, under which ex-presidents receive an annual pension equivalent to the pay of a current Cabinet member, which this year is $203,700. (The president receives $400,000 a year while in office.) Pensions have totalled tens of millions of dollars since the program began.

The Presidential Allowance Modernization Act, H.R. 1777 and S. 1411, would reduce that pay.

What it does and how it works

Under the new bill, pensions would be reduced by however much an ex-president makes above $400,000 a year. For example, let’s say Obama makes $480,000 in his first year out of office through fees from speeches and book sales. He would lose $80,000 from his pension, leaving him with about $120,000 paid for by taxpayers.

In other words, if an ex-president makes $600,000 or more in a given year, they would have the full $200,000 deducted from their pensions. Taxpayers wouldn’t be on the hook for paying them anything. That’s not a hypothetical: Clinton and George W. Bush make several million dollars a year from speaking fees. Even Obama currently earns more than that $600,000, because in addition to his official presidential salary, he also earns hundreds of thousands from investments and royalties from book sales.

History and context

The inspiration for the Former Presidents Act in 1958 was former president Harry Truman, who was so poor upon leaving office that he had to move into his mother-in-law’s house. Other former presidents throughout history such as James Monroe and Ulysses S. Grant faced dire financial conditions upon leaving office as well.

At the time, the law was meant to ensure this scenario never occurred again. But with the rise of ex-presidents hitting the speaking circuit, first popularized by Gerald Ford in the late 1970s, that’s realistically no longer an issue. Former presidents command at least $100 thousand per speech, if not more. In this day and age, no president is going to go poor after leaving the White House anymore. Actually, quite the opposite — the Clintons were never rich until after leaving the White House.

Support and opposition

That’s why Rep. Jason Chaffetz (R-UT3) and Sen. Joni Ernst (R-IA), the lead sponsors of the House and Senate bills, want to curtail this practice — if not outright end it. “No former US president today is dependent on taxpayer subsidies alone for his living,” Chaffetz said. “The time has come to reduce the taxpayer’s heavy burden of supporting former presidents who have proven to be highly capable of supporting themselves.”

“Taxpayers should not be on the hook for subsidizing former presidents’ lives to the tune of millions of dollars,” Ernst said. “Although this is a narrow item, this is an issue of restoring taxpayer trust by looking at reforms in the allowances and perks given to these former presidents who generate significant incomes after leaving office. At a time when we are more than $18 trillion in debt, it is critical that we stop talking and start cutting wasteful spending.”

However, the bill would actually increase spending in another way: by increasing the annuity of a surviving spouse of a former president from $20 thousand to $100 thousand. While likely not much of an issue for Hillary Clinton or Laura Bush, given their high speaking fees — Clinton earned $250 thousand from a single speech at the University of Connecticut alone — this could prove valuable for other living First Ladies who don’t hit the speaking circuit, such as Rosalynn Carter.

The bill passed in January on a voice vote in the House, which means that that individual representatives’ votes weren’t recorded. The Senate Homeland Security and Governmental Affairs Committee passed it in February, also without individual senators’ votes recorded, meaning it will now go to a vote in the full Senate. Although it’s not yet clear whether any Members of Congress have voted against this bill, GovTrack was unable to locate any statements of opposition from a current Member.