PRESIDENT Obama's proposal to hand out $250 checks to senior citizens has nothing to do with the worthy goal of helping older Americans survive the recession but a whole lot to do with pandering to a powerful voting bloc.
Since 1975, Social Security benefits have been linked to cost-of-living increases so that seniors would be harmed less by inflation eating into their buying power. This year, for the first time, the cost of living actually fell by 2.1 percent compared to 12 months ago. Therefore, seniors, for the first time, will not get a cost-of-living adjustment in their benefit checks in 2010.
But it must be remembered that, this past January, Social Security recipients got a 5.8 percent increase in their payments, largely in response to spikes in energy and gasoline costs fueled by record high oil prices in 2008. In addition, seniors received a $250 check as part of the federal stimulus program.
All of that occurred in a year in which deflation, spurred by falling energy prices, has been the norm. According to the Department of Labor, gasoline prices have declined by nearly 30 percent in the last 12 months, while energy costs in general have fallen by almost 22 percent.
This is not to suggest that there aren't Social Security recipients who need help. The average monthly check is something around $1,100, and for 20 percent of older married couples and 40 percent of elderly singles, that small check represents 90 percent of their monthly income. There are many for whom the extra $250 would be a godsend.
But let's not pretend that not getting a COLA next year means seniors will suffer significant hardship. While premiums for Medicare Part D, the prescription drug program, will rise, that will be partially offset by recent decreases in the cost of many common drugs, and Medicare Part B premiums will stay the same in 2010 for most people on Social Security.
What's really going on here is that the Obama Administration wants to send seniors a $250 lollipop to say we still love you to an important constituency that's already irrationally afraid the health-care reforms being hammered out in Congress will reduce their coverage or even kill them.
About 80 percent of seniors are registered voters, and of those, about 70 percent regularly exercise their civic responsibility, making seniors one of the most important voting blocs nationwide. Because of that, senior advocacy groups, especially the AARP, are among the most influential lobbyists in Washington, and that is why the President's proposal, or something very like it, will win widespread bipartisan support.
So, go ahead and write the checks, but call it what it is: a $13 billion sop to seniors.
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