A romanticized view of a past that never happened the way we thought is one of the greatest disservices to a functioning modern republic.
It gives us the impression that everything the demi-gods of the past did was right, and everything our modern leaders do is open to the highest scrutiny.
Today’s political rhetoric is filled with Donald Trump’s pledge to not receive any salary as president, but is heavily offset by some of the seemingly outlandish expenses he’s already submitted to the federal government for payment.
It’s hard to compare this to anything in modern history. Most presidents have had considerable paper wealth, all put into a blind trust during their presidency — and almost all of our presidents collected both their salary and whatever post-presidency benefits they were entitled to receive.
But it’s George Washington, our first president, that gives us a glimpse into how expense accounts reign supreme when it comes to politics — from both his tenure as commander-in-chief during the Revolution and presidency.
And more importantly, why Congress eventually put an end to this practice.
1. Who needs a salary? Expense-free, first-class living is always better.
One of the greatest assets of history in our time is the availability of huge collections of historical documents at the Library of Congress — digitized and placed online for anyone to access.
As part of the Washington collection of over 65,000 original documents, the full collection of Washington’s expenses as commander-in-chief and as president are online, in their original handwritten format.
One of the most fascinating things to realize is that while Washington served without pay for the duration of the Revolution, his expenses were all paid by Congress — totaling an enormous amount in their day’s money ($160,074 – 400,000+ in their day’s money depending on how the conversions are calculated from British pounds to Continental currency).
Some of the expenses were mundane, like an entry for a 20 pence ball of twine. Others were by any standard lavish — including over $800 for a saddle and leather tack-work and about $6,000 for liquor for Washington and his officers from September to March 1776.
Washington did well for himself by looking out for ‘number one,’ even charging Congress almost $4,000 to retreat from Trenton and set up command in Pennsylvania.
2. Bad handwriting and vagueness covers a multitude of sins.
Even the briefest of glances into these handwritten records forces the eye to catch something that is consistent throughout the ledgers. The numerical amounts (kept in pounds, shillings, and pence) are written flawlessly in the most beautiful script possible — the reasons for the expenses were barely legible (getting worse as the expense increased) with a vagueness that would make any auditor have convulsions.
This is by no means unique in accounting — make it as easy as possible to get paid the amount you want (ie the amounts are clear), but keep the paperwork confusing enough that the payers eventually give up through exasperation.
Modern accounting is no different, which is why we see billionaires like Warren Buffet and Donald Trump routinely audited by the IRS — it’s just too easy (and tempting) to hide the Devil in the details.
3. Who cares if the suppliers actually get paid — as long as you have the stuff?
This point is a little bit difficult to understand in the modern day, but isn’t wholly out of the realm of the way things are still done when trying to cheat contractors out of payment.
During this point in history, when a supplier provided goods to the military, they were issued a payment draft (or warrant), which they could present to the paymaster for payment in cash.
This sounds ‘normal,’ like the modern practice of accepting a check for services rendered — but there was a substantial hitch to this: it was usually difficult (if not impossible) to actually present the draft to the paymaster because the Army was always on the move with limited paymasters available. As the fortunes of war ebbed and flowed, Continental currency followed suit — at times being nearly worthless, but sometimes trading at almost par.
Drafts and warrants were circulated like counter-signed checks as currency. The first recipient would have to discount the value in order to get the other person to accept it, and each time it changed hands the face value was further devalued. In the end, speculators were the only ones to ‘clean up’ on this process, buying drafts at pence on the pound in hopes that the Congress would eventually honor them after the war (which they did).
But in reality, this was a short-changing of suppliers. A crafting purchasing agent could get 100% of the goods, while forcing the supplier to accept a lowered payment because of the devaluation.
Washington didn’t get nearly as ‘good’ of a deal as president. While he still had a lot of expenses paid, it came to a fraction of his wartime living expenses.
The members of the Constitutional Convention discussed presidential pay, with the first third of the Federalist #73 devoted to the reasons why we should pay the executive a large sum. Part of the reason was their collective world view of the head-of-state being an honored title — and that if we didn’t pay the head-of-state enough we would be considered the ‘trash’ of the 18th century global powers. Part of the reason was that presidents shouldn’t be able to be bought by the highest bidder.
Washington’s pay during his second term (after disappointed in not getting his salary-free, first-class expenses paid arrangement during his first term) represented almost 2 percent of the total federal budget.
In modern times, if we still paid the president the same percentage their salary would be in the tens of billions of dollars per year.
But the biggest precedent set was that there was going to be limits to what Congress was going to pay out as expenses to the president — and that for the most part that limit was ‘enshrined’ in the pay package.
Washington's pay during his second term ... represented almost 2 percent of the total federal budget.David Yee, IVN Independent Author
In effect, Congress was trying to eliminate the ability of a president to serve without pay — only to send in bills for expenses for first-class living.
This congressional ‘leash’ lasted for over 226 years. And in fact, some of the wealthier presidents actually took it upon themselves to pay for upgrades to the White House’s furnishings and maintenance without reimbursement. More than a few vice presidents did the same for the Naval Observatory, including Rockefeller’s millions of dollars donated to lavishly furnish the vice president’s residence that are still in use today.
In 2017 and beyond, all bets are off.
Trump has already proven that he’s a shrewd businessman, one of the very few to personally profit from a presidential campaign — by charging his own campaign over $100,000/month rent for office spaces that he already owned.
In the end, the 115th Congress is going to have to deal with Trump in the same fashion the 1st Congress dealt with Washington — there are going to be limits at some point imposed on what he can charge for expenses.
At some point, President Trump will have to learn how to ‘get by’ on just a $400,000 per year salary and $50,000 expense account — even if it means he’s like George Washington, who wound up losing money during his second term in office.