Barack Obama has a big problem with seniors after pushing his version of a health-care system overhaul all summer long, one that proposes massive cuts in Medicare funding to pay for new entitlements and subsidies. How can he best resolve that conundrum and get seniors on his side? Apparently, his answer is to toss $250 each to seniors as a means of cushioning the loss of the cost-of-living increase from Social Security, the first such COLA denial in 25 years:
There will be no cost of living increase for more than 50 million Social Security recipients next year, the first year without a raise since automatic adjustments were adopted in 1975.
Blame falling consumer prices. By law, cost of living adjustments are pegged to inflation, which is negative this year, the government said Thursday, because of lower energy costs. Social Security payments do not go down, even when prices drop.
The Obama administration, meanwhile, is pursuing a different way to boost recipients’ income. On Wednesday, President Barack Obama called for a second round of $250 stimulus payments for seniors, veterans, retired railroad workers and people with disabilities.
The payments would match the ones issued to seniors earlier this year as part of the government’s economic recovery package. The payments would be equal to about a 2 percent increase for the average Social Security recipient.
For the last two years, Obama the Candidate blasted the Bush administration for ad hoc spending that ignored the “pay-go” rules of the Clinton era. Does Obama follow his own advice here? Of course not. The White House doesn’t even bother to pretend that the $13 billion cost of the one-time payment will get matched by increased revenues or spending cuts elsewhere:
The White House put the cost of the payments at $13 billion. Obama didn’t say how the payments should be financed, leaving that up to Congress. The president is open to borrowing the money, increasing the federal budget deficit, just like Congress did with the first round of stimulus payments.
But even apart from the dishonesty of using the same ad hoc spending that Obama had blasted (which also applies to Obama’ stimulus spending), will this even work? Financially, all it does is make seniors “whole” for the loss of the COLA, although the lack of inflation in the past year means that they weren’t entitled to it in the first place. Like the stimulus package passed in early 2008 by the Democrats and signed by George Bush, the one-time check will do little to relieve long-term financial worries, in this case among those on fixed incomes.
The 2008 stimulus did nothing to prompt an economic recovery. There is no reason to expect that Obama will get a political recovery among seniors from a $13 billion one-time giveaway. It shows once again that Obama has no real commitment to fiscal discipline or deficit reduction, and instead wants to use Porkulus and the Treasury as a political piggy bank.