Inflation is eating the value of the commander-in-chief’s $400,000 salary, which is headed for an all-time low by 2028. But a look at history shows that big swings aren’t necessarily new.
By Kyle Khan-Mullins, Forbes Staff
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nflation isn’t just hurting Joe Biden in a political sense—it’s affecting him personally. The president earns a fixed $400,000 annually, which is worth less every year that prices increase. Given the recent surge in inflation, the purchasing power of Biden’s salary is now 18% lower than it was when he took office. And the worst may be yet to come: If inflation continues at its current pace, whoever is in office by 2028 will, according to Forbes’ estimates, be the worst-paid president in American history.
To fully understand how this happened, it helps to start in the late 1700s, when the United States had no chief executive at all. Freshly liberated from King George III, the founding fathers crafted a Constitution that would not put a president on a permanent throne, but would still leave him very comfortable. “The third ingredient towards constituting the vigor of the executive authority,” Alexander Hamilton wrote in Federalist No. 73, “is an adequate provision for its support.”
A PRESIDENT’S NOT-SO-PRINCELY SUM
In recent decades, the inflation-adjusted value of the president’s salary has been on an unsteady decline.
Thus, George Washington took office in 1789 with an annual salary of $25,000, equivalent to roughly $600,000 today. It stayed at that level for nearly 100 years, a period where deflation was almost as common as inflation, leaving the president generously compensated for most of that period. One exception came during the War of 1812, when wartime spending and a British blockade of American ports caused prices to skyrocket, dropping the present-day value of James Madison’s $25,000 salary to roughly $365,000—hardly enough for someone who also had to deal with redcoats razing the White House.
Abraham Lincoln experienced a similar dynamic. To fund the Civil War, his administration printed greenbacks like mad, sending the value of the dollar down and reducing the inflation-adjusted value of Honest Abe’s $25,000 salary from $850,000 to $500,000 by 1865. Eight years after the war ended, former Union general Ulysses S. Grant signed a law hiking congressional salaries and doubling his own to $50,000, equal to $1.3 million today. The measure, which became known as the “Salary Grab Act,” was so unpopular that Congress later rescinded its pay bump. The president’s stayed in place, though.
It rose again in 1909, to $75,000, upon the inauguration of William Howard Taft, the highest-paid president in American history. That year, Taft earned more than $2.5 million in today’s terms. His successor, Woodrow Wilson, wasn’t quite so lucky, watching his salary’s value drop to roughly $1.1 million by 1920 in today’s dollars thanks to a jolt of inflation caused—once again—by military spending, this time for World War I.
Here’s the ranking of presidents by average inflation-adjusted salary during their time in office.
The Great Depression caused prices to fall nationwide, ruining Herbert Hoover’s legacy but increasing his salary, on an inflation-adjusted basis. Franklin Delano Roosevelt’s $75,000 added up to quite a bit, too, around $1.3 million in today’s terms when he died in 1945. After World War II ended, the economy took off—and so did inflation, dropping inflation-adjusted presidential pay below $1 million for the first time in decades. Harry Truman still did fine, though, thanks to a $25,000 raise from Congress, which boosted the presidential salary to $100,000 a year in 1949 (equivalent to more than $1 million today) and tacked on a $50,000 expense allowance. Truman, a Missouri farmer, later wrote to the legislature to offer his thanks for the raise—and argue for similar bumps across the executive branch. “The best of laws,” he wrote, “can be ruined by poor administration.”
Congress bumped the president’s pay to $200,000 again in 1969 as Richard Nixon entered the White House. His vice president Gerald Ford—who took over after Nixon resigned in disgrace—and Ford’s successor Jimmy Carter were the last to earn over $1 million in today’s terms. Stagflation of the late 1970s took a massive cut out of the president’s real pay, and steady, relatively low inflation ever since has continued to chip away at it. In 2001, Bill Clinton left office saddled with legal debts thanks in part to an impeachment battle. For his successor, though, the presidential salary doubled to $400,000, bringing it from an all-time inflation-adjusted low of $355,000 to $700,000 in today’s dollars.
No one has touched the presidential salary since, and with inflation running above target in recent years, the next president’s compensation looks set to keep dropping in value—potentially below Clinton’s all-time low by 2028. If Trump wins this year, it seems unlikely he would be the one to raise it—after all, he has billions, and routinely touts how he donated his salary the first time he served as president. Biden might be more likely to see some value in a pay raise. The president, with an estimated $10 million net worth mostly tied up in personal real estate, tapped into a home equity line of credit last year to access a little more cash.
