A Project of The Annenberg Public Policy Center

Cost of Obama’s Transition


Q: How is President-elect Obama paying for his transition?

A: Obama’s transition is being financed with $5.3 million in public funds provided by Congress, supplemented by another $6.7 million that his team hopes to raise from individuals in donations not exceeding $5,000 each.

FULL QUESTION

How is President-elect Obama paying his pre-inauguration team of advisers? Is there a fund in the budget set aside for this already? Are they already government employees? Or are they paid with the funds raised during the campaign? How have past President-elects handled this if Obama’s situation is dfferent from the past?

FULL ANSWER

The Presidential Transition Act of 1963 called for public funds for presidential transitions and put the General Services Administration in charge of providing support for a smooth transfer of power. Before this act was passed, president-elects financed their own transitions.

 

The act allocated $450,000 to the incoming president and $450,000 to the outgoing president. Transition budgets have grown quite significantly since then. The funding levels were increased in 1976 and again by the Presidential Transition Effectiveness Act of 1988, which stipulated that $3.5 million would go to the president-elect and $1.5 million to the outgoing administration, with both amounts to be adjusted for inflation over time. That act also said that private funds can be raised to supplement these amounts but individual donations can’t exceed $5,000. Barack Obama’s transition budget (for a team of 450 staffers) is $12 million, according to transition co-chair John Podesta. Of that amount, $5.3 million was appropriated by Congress. Also, $2.2 million was allocated to the outgoing president and vice president. In 2000, Congress appropriated $4.27 million for George W. Bush to use for his transition.

As the amount of money being spent on presidential transitions increased, Congress passed the Presidential Transition Act of 2000, which sought to improve the financial disclosure process of president-elects during a transition phase.  Podesta announced in early November that the Obama transition project would not accept donations from federal lobbyists, and it also will turn down contributions from corporations, political action committees, labor unions or foreign agents. As of November 15, 1,776 donors, listed on the transition site, had given a total of $1.17 million. Federal Election Commission rules stipulate that any leftover funds Obama may have from the general campaign can be used to pay campaign bills or debts, or can be donated to charity or to a political party, not to fund the transition.

Federal lobbyists working for the transition face other restrictions: They cannot work in a policy area for which they have lobbied in the past 12 months, can’t lobby at all while working for the transition, and can’t lobby the administration for 12 months after the transition on issues on which they worked. As ABC News pointed out, however, at least five of Obama’s "bundlers" – fundraisers who solicit donations on behalf of a politician – are part of the transition team and had raised at least $50,000 apiece for his campaign, according to records compiled by the consumer watchdog group Public Citizen.

As for the inauguration, funding for that is being raised separately by the Presidential Inaugural Committee, which is posting the names of donors on its Web site. The committee says that an individual’s contribution is limited to $50,000, and, like the rules on donations to the transition project, money is not being taken from corporations, political action committees, labor unions, federal lobbyists and non-U.S. citizens.

– Ronald Lampard

 
Sources
 
Pen and Pad Briefing with John Podesta. Federal News Service, 11 Nov. 2008.

 

Presidential Transition Act: Provisions and Funding. Congressional Research Service, 30 Oct. 2008.

Cooper, Helene and Zeleny, Jeff. Obama’s Transition Team Restricts Lobbyists’ Role. New York Times, 11 Nov. 2008.

Schwartz, Emma. Lobbyists Banned, but Big Donors Play Major Transition Role. ABC News, 13 Nov. 2008.
 
Presidential Transition Act of 1963, 7 March 1964.

Presidential Transition Effectiveness Act of 1988
, 16 March 1988.

Presidential Transition Act of 2000
, 12 Oct. 2008.

CQ Press: Democracy in Transition – Preparing for the Obama Presidency. The Transition Period. CQ Press’s Guide to the Presidential Transition, 7 Nov. 2008.