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Seniors may get a raise after all, but at whose expense?

No increase in Social Security benefits next year? Right, the falling cost-of-living index doesn't allow a raise for seniors.

But President Obama is asking Congress to come up with an extra $250 for each of 49 million SS beneficiaries. That would about to about a 2 percent bump for the average recipient.

With a few other giveaways, his "Economic Recovery Payments" would help 57 million Americans at a cost of $13 billion.

These are the people "hardest hit by this recession," the president said in a statement.

Are they? I thought the people hardest hit were those who lost their jobs or saw their work hours cut and paychecks sharply reduced.

I understand many seniors have taken big losses in their private retirement funds. But working families with kids are struggling to make ends meet with less income -- and their taxes will pay for this boost. Or maybe their children's taxes, because this will add another $13 billion to the deficit.

The White House statement notes: "The President is committed to ensuring that the $13 billion cost of the proposal does not reduce the solvency of Social Security or other social insurance programs."

What about the solvency of the government as a whole? This just makes the debt clock spin that much faster.

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Posted by Doug Clark on Thursday, October 15, 2009 at 8:23 am

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Andrew Brod

October 15, 2009 - 9:16 am EDT

Doug, I'm not sure this makes sense either, at least from an equity standpoint. It seems we're still operating under the old idea that the elderly are fundamentally poor, and it's simply not like that any more. As a class, children are much more likely to be poor. (Which is not to say that we let poor seniors suffer, just that SS isn't the best way to help them.) On the other hand, given that this is part of the stimulus, it's also important to ask how likely it is that seniors will spend this money. On that score it might make more sense, because seniors aren't exactly in the saving phase of their lives.

Having said that, your hand-wringing is a bit much. The "solvency of the government" is not an issue, the debt clock notwithstanding. And working families that are truly struggling are probably not paying much in taxes, hence unlikely to bear the burden of this increase in SS benefits. The burden is more likely to fall on the middle class and above, and whether that's okay is a matter of politics.

Doug

October 15, 2009 - 10:43 am EDT

Thanks for the feedback, Andy.

You're right that it's overly dramatic to talk about the solvency of the government, although I used that word because the White House statement used it in reference to the Social Security system. At the same time, if there's no real concern about the deficit, then Congress could send everyone another $250, or $500, or $1,000, which should provide an even greater stimulus.

I think plenty of middle-class families are struggling now if their income is down and, say, they have any kids in college (tuition keeps going up) or are trying to save for college.

Connie Mack Jr

October 15, 2009 - 12:58 pm EDT

What about the solvency of the government as a whole? This just makes the debt clock spin that much faster.* Doug

Don't worry Doug! SS will simply sell another paper promise note to the Federal Reserve System, who will stash it in a Al Gore lockbox in a Government Warehouse in West Virgina and not to be open until 3003 AD for payment or if Jesus returns first?

Dogwood

October 15, 2009 - 6:00 pm EDT

I would rather see $2500 deducted from the automatic pay raise Congress receives yearly for the next twenty years.

brian444

October 16, 2009 - 2:07 am EDT

No, it doesn't make much sense, and no, who even cares about $13 billion any more. That's such small potatoes it doesn't even interest deficit hawks like me. The real problem is that the same president who insists on pandering in this way bases about half of his health reform funding (you know, the "revenue neutral" one) on cuts to Medicare. That's hundreds of billions in cuts that everybody--EVERYBODY--knows will never happen. I'd like to think of this $13 bil as a bribe to take the edge off of those Medicare cuts, but I'd be a fool to do so.

Doug Johnson

October 16, 2009 - 6:21 am EDT

Seniors not saving? Blanket statement!!
We save over 40% of our income each month.
So do most of our friends.
I more than likely will deposit mine in bank. Where I will receive tiny bit of interest.
Banks do not have to compete for money, Obama gives it to them.
What Mr. Clark fails to point out, this is a vote buying sham, by his liberal president.
Want to help all people, the liberal media should start, taking on the Raleigh Mafia, and their porkulus!
.