Amy Goldstein and Neil Irwin have the unenviable task of describing this as anything other than the political pandering that it is:
President Obama on Wednesday attempted to preempt the announcement that Social Security recipients will not see an increase in their benefit checks for the first time in three decades, pressing Congress for a one-time payment of $250 to help seniors and disabled Americans weather the recession.
So why is it that retirees are having trouble weathering the recession -- because they were fired from jobs from which they had already retired or because they had trouble paying the prices that haven't gone up relative to their Social Security benefits?
Other elected officials quoted in the article would like to justify these payments as another $13 billion of stimulus payments to help sustain the nascent economic recovery. My views on the right way to do stimulus are explained here, but in the interest of helping the political discourse, I'll make one suggestion. If these payments are made, they should then be deducted from Social Security benefits the next time the cost of living adjustment is positive. You get the near-term infusion of cash without the longer-term increase in debt.
Pandering to Seniors
The Committee for a Responsible Federal Budget has also argued against enacting a one-time payment to seniors or an ad-hoc COLA. The only economic justification for a one-time payment would be if the Administration and Congress believe that the economy needs additional stimulus and the original one-time payments in the 2009 stimulus act were shown to be a particularly successful form of economic stimulus. If neither are true, then CRFB would also oppose the one-time payments because they would be pure political pandering.
Visit http://crfb.org/blog for CRFB analysis on this issue.
Re: If these payments are
Re: If these payments are made, they should then be deducted from Social Security benefits the next time the cost of living adjustment is positive. You get the near-term infusion of cash without the longer-term increase in debt.
Great idea (in terms of fairness, not necessarily political prospects). One tweak: the deduction could be spread out over a few years to diminish it's impact and perhaps make it more politically palatable.
The only argument I've seen (other than stimulus) is that the CPI doesn't reflect inflation faced by seniors due to higher healthcare costs (premiums and/or out-of-pocket).
But yeah, this is lame political pandering -- and, I would note, apparently inconsistent with Bruce's assertion that "Democrats are closer to the point where they would be willing to talk about serious cuts in entitlements" http://capitalgainsandgames.com/blog/bruce-bartlett/1168/supply-side-eco...
Seniors have suffered in the
Seniors have suffered in the form of crashing value of their investments, which is pretty bad for people would have a tough time finding a job in any economy, let alone today's climate.
I do like the idea that it would be deducted from the next SS COLA though.
Pandering?
Perhaps it's being done to offset the raises for government employees, 3.6% this year and 2% in 2010.