Biting the hand that feeds me, I think it is a bad idea that President Barack Obama is urging Congress to kick in an extra one-lump $250 to each of the 57 million seniors, veterans and people with disabilities because they will not receive cost-of-living increases in 2010 from Social Security benefits.
It's not that I prefer to go without. If Congress goes along with the president, and key leaders say they like the idea, I would prefer it be paid in 12 monthly $20.83 increments added to the average gross monthly stipend of $1,261.
Recipients received a $250 bonus in 2009 as part of the $787 billion stimulus package and those such as me on fixed incomes either saved it, paid off a few bills, spoiled the grandkids or bought personal or household items.
The Social Security Administration announced Thursday there would be no cost of living increase because of zero inflation this past year. That hasn't happened since 1975. The good news is that by law benefits cannot be reduced which means Medicare premiums will remain at $96 which are deducted from most Social Security beneficiaries.
As I see it, inflation will occur during 2010 in food, health insurance shares of cost, gasoline and other economic sectors that hit those on fixed incomes the hardest. An extra $20 a month can be better managed to cover some of those increases than a lump sum of $250.
Just as important is the $13 billion cost of Obama's plan which the White House said had no idea where the money would come from. That means printing money which in itself is an inflationary process. That in turn increases our national debt and makes the government's borrowing powers that much more expensive.
The timing of the president's proposal makes the cynic in me think he's throwing crumbs at seniors in hopes they will support his healthcare reform legislation. One cost-cutting measure being proposed is a so-called $500 billion in savings in the form of waste and fraud in Medicare. Many seniors and their advocates lobbying Congress believe those cuts will remove benefits they now receive under Medicare.
White House spokesmen said the $250 plan in no way signals the administration is paving the way for a second massive economic stimulus.
"Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession," Obama said in a statement. He noted that countless seniors had seen their retirement accounts and home values shrink during the economic slump.
Senate Majority Leader Harry Reid (D-Nev.) and Rep. Charles B. Rangel (D-N.Y.), chairman of the Ways and Means Committee, which has jurisdiction over Social Security in the House, both said they support the plan.
But Sen. Judd Gregg (R-N.H.) objected. "I think it would be inappropriate," he said. "The reason we set up this process was to have the Social Security reimbursement reflect the cost of living."