Obama’s Voluntary Pay Cut

Matt Yglesias just put up an odd little post about how absurd it is that the president is giving back 5% of his income ($20,000/yr) directly to the U.S. Treasury in a supposed show of solidarity with federal employees facing furloughs and pay cuts as a result of the sequester. I agree with this conclusion, but his reasoning is surprising:

Here’s my advice. If you feel like you’ve got too much money on your hands, don’t cut your own pay. Take the money, walk down the street, and give it to a homeless person. Or put cash in envelops and mail it to random families. Or get fancy about it and use GiveDirectly to fight poverty in Kenya. But do something! Money is valuable, if not to you then to someone else. Use it wisely.

The implication here is that giving money to the government is akin to throwing it in to a black hole; you’d be better off just handing it out at random. There are, of course, people that subscribe to this viewpoint, but most of them are in the Tea Party.

The U.S. government is trillions of dollars in debt and will be facing budget deficits for, at very minimum, the next 10 years. Although the consensus view from economists and thinking commentators is that our debt load is manageable and doesn’t deserve the “crisis” label many have tried to put to it, there’s no question Treasury could use the money.  Relative to the number of digits in most federal budget figures, it might seem like Obama’s extra contribution just disappears, but on the margin it’s making an impact. Anyone who believes the U.S. government is a system that deserves to be funded (hint: you, me, and Matt Yglesias) should be happy to see revenues going up.

My problem with the gesture is that it’s not much of a sacrifice. Obama and his family will clearly survive just fine on the other $380,000 of his salary and the state-provided digs–not to mention the speaking fees once he leaves office. $20,000/year is a lot in absolute terms, but it feels insincere for someone so well-off to act like he shares the struggles of the common man, some of whom are facing cuts of much more than 5%. It’s just an act of political theater, and one that’s drawing away time and attention from substantive issues.


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