A White House proposal to give every Social Security recipient a check for $250 next year has provoked a debate over whether seniors really should be given the extra help.
The check is intended to make up for a lack of a cost-of-living adjustment in Social Security for the first time in decades. Those increases are tied to inflation, and a drop in energy prices has helped drive inflation backward — prices are getting cheaper.
Critics say the proposal will just run up the deficit in an effort to curry favor with seniors. But the AARP's Cristina Martin Firvida says that in some areas, seniors are facing real price increases.
"Health care — which is one thing that retirees buy in greater abundance than healthier younger workers — is something that is not going down in price, and, in fact, continues to outpace inflation," she says.
And while energy costs may be going down, Sonja Asher of Minneapolis says she's seeing the costs of owning a home and a car going up. Asher, an 83-year-old widow, is completely dependent on the $924 a month she gets from Social Security.
"Home insurance, car insurance. Yes, it's not good," she says.
Still, a special Consumer Price Index developed for seniors shows that, as a group, they are now paying less for goods and services.
'A Bad Precedent'
Some members of Congress have proposed going ahead with about a 3 percent cost-of-living increase, despite the lower prices. But even liberal groups say that's a bad idea.
Jim Horney of the Center on Budget and Policy Priorities says an increase would fly in the face of the 1975 law that instituted regular cost-of-living increases for Social Security.
"I think that would be a bad precedent, and that's why we recommend that you don't provide a cost of living [increase] in this situation, where the cost of living hasn't gone up," Horney says.
Horney likes the president's idea of a one-time cash payment, a repeat of the $250 stimulus payment seniors got in the spring.
But deficit hawks like Chris Edwards of the Cato Institute say there is no justification for giving seniors special treatment right now.
"Most people are not getting wage increases this year, so for example, young families with children — nanny care and that sort of thing — are rising, and yet we don't jump out and give them a special payment," Edwards says.
Individual Needs
AARP's Firvida says seniors are facing special hardships because their houses and retirement accounts have crashed in value.
I don't need $250. I mean, right now. If the market goes down again, I'll take it happily. But I don't need it -- I think there should be a cutoff point.
"What they do not have is the luxury of time to see the value of those investments, of their home, come back," Firvida says.
One problem with the White House proposal is it treats 50 million seniors as a homogenous group. But the stories seniors tell show how just how individual their needs are.
Noreen Martin, 92, who lives in an assisted living facility near Washington, D.C., says the prices of things that matter to her are climbing.
"Nearly 2 bucks for animal crackers? Please. I have a 3-year-old, that's why I buy animal crackers," Martin says, referring to her 3-year-old great-granddaughter.
But Martin has other income besides Social Security and lives in a comfortable high-rise. She says the proposal to give every senior a payout doesn't make sense.
"I don't need $250. I mean, right now. If the market goes down again, I'll take it happily. But I don't need it — I think there should be a cutoff point," she says.
Martin says she would probably not spend the money. She would just give it to her children, which might help them pay for a proposal that may add more than $13 billion to the deficit.
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