Obama’s 5 Percent Solution for the Sequester
Big question for the next news cycle: Is this covered as a bold, magnanimous, generous gesture on the part of our Munificent Sun God/President? Or does it get treated as a meaningless publicity stunt?
President Barack Obama will put 5% of his paycheck back into the federal government’s coffers in a show of camaraderie with furloughed federal workers, a senior administration official said Wednesday.
Obama, whose $400,000 annual salary is set in law and can’t officially be changed, will write a check made out to the U.S. treasury every month beginning in April. Since the mandatory across-the-board spending cuts went into effect March 1, his payment for that month will be paid retroactively.
Obama will give back 5 percent of all his paychecks from March to December, so we’re talking about $16,666.66 or so. That amount would cover the costs of Air Force One in flight for about five and a half minutes.
President Obama has a net worth estimated between $2.6 million and $11.8 million; he makes $400,000 per year before taxes, lives rent-free at the White House, pays absolutely nothing in official travel costs, and gets $169,000 to cover expenses, personal travel, and entertainment. The government pays for state dinners and other official functions, but the president pays for personal services like dry cleaning and food that he, his family, and personal guests consume.
But he’s giving up about $1,666 per month, so, hey. Shared sacrifice!
Erik Soderstrom offers a great graphic to illustrate it all.
Cameron Gray: “The auto pen will now use 5% less ink when signing laws.”
Cam Edwards: “5% fewer guns to Mexican Drug Cartels!”
Dave Weigel: “Can we give him TWO Nobel Prizes? #hero”
Oh, one more catch:
President Barack Obama could be able to claim a tax break for his decision to return 5 percent of his salary to the government.
Obama is giving back part of his $400,000 in salary in solidarity with federal workers facing furloughs because of budget cuts in the sequestration of federal funds.
Voluntary payments to reduce the public debt can be taken as deductions for charitable contributions, according to the Congressional Research Service.
At the 39.6 percent top federal tax rate — the one Obama insisted on last year — the $20,000 deduction for this returned pay would put $7,920 in tax relief back in his pocket.
If this happens, the government would pay Obama, who would pay the government, which would then pay Obama.
Of course, Obama won’t take the tax break. The point is that he, and his top donors, and a good portion of the people he interacts with every day, live a lifestyle where $7,920 in tax relief makes no real impact on daily life at all.