Democrats and Republicans Support $250 Senior Stimulus

There is bipartisan agreement in Congress to cut seniors on Social Security checks.

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Amid the escalating debate over healthcare reform, last week saw a rare instance of Washington bipartisanship. When the Social Security Administration announced that seniors would not receive a cost-of-living increase in their Social Security payments next year, leaders of both parties vowed to cut them checks anyway.

President Obama kicked off the idea by rolling out a $12 billion plan to send 50 million seniors $250 payments from federal stimulus funds in lieu of the cost-of-living increase. "This additional assistance will be especially important in the coming months," Obama said, "as countless seniors and others have seen their retirement accounts and home values decline as a result of this economic crisis."

Republican congressional leaders lined up to voice their approval. "I'd be happy to support the president's proposal," said House Minority Leader John Boehner, though he insisted the funds come from the unspent portion of this year's $787 billion stimulus bill.

The gathering support for the one-time checks irked budget watchdogs. "You have to make decisions on how stimulus is spent based on cost-benefit analysis," says Robert Bixby, the executive director of the Concord Coalition, a Washington group that promotes fiscal responsibility. "This is political cover that's being spun as stimulus. The idea of no cost-of-living increase scares the heck out of politicians." That helps explain why Obama's plan is unlikely to meet much resistance as it wends its way through Congress. "It's pretty tough politically to vote against this when we're still in the throes of a recession," says Republican strategist Whit Ayres.

This would be the first year without a bump in Social Security payments to seniors since 1975, when Congress pegged cost-of-living increases to inflation, partly as a way to depoliticize the issue in future years. But consumer prices are down 2.1 percent in the past year, which would mean that Social Security payments would remain the same come January. (Payments don't go down under the rules.) "This is the way the formula is supposed to work," says Bixby, who notes that last year's spike in prices led to an unusually large 5.8 percent boost in Social Security payments this year. For the typical Social Security recipient, a $250 check would be the equivalent of a 2 percent increase.

A huge voting bloc that goes to the polls in higher numbers than almost any other demographic group, seniors have long won special attention from lawmakers. "Neither party wants to be outbid in buying the support of this segment of the population," says Maya MacGuineas, president of the Committee for a Responsible Federal Budget, a nonpartisan group promoting fiscal education.

She and other fiscal hawks, even some in Congress, worry that the stimulus checks will paper over the bigger problems surrounding Social Security's long-term solvency. "If we continue to spend money on the cause of the day, it's going to lead us down the road toward bankruptcy," says Sen. Judd Gregg, a New Hampshire Republican. "That's not going to benefit seniors—or our children." Asked how much confidence he has that even other Republicans will follow his lead, Gregg says, "Absolutely none."