Supposedly these "economic recovery payments" are justified because seniors won't get an inflation-adjusted increase in Social Security benefits this year. This zero cost-of-living, or COLA, increase has many seniors alarmed, and AARP and other lobbies have been fanning their anxiety. Mr. Obama's Wednesday news was timed to pre-empt yesterday's announcement of the zero COLA by the Social Security Administration. The $250 checks will funnel $13 billion to some 57 million beneficiaries—in addition to whatever they have already received as part of the $787 billion stimulus.
Mr. Obama's $250 check would be the equivalent of another 2% increase, and he is proposing no compensating spending cuts to pay for it. This means the checks will come out of general revenues, which means that they won't be financed based on the traditional calculations of what seniors pay into the system over their working lives.
Never mind, too, that Social Security already increases payments over the long term because every class of retirees has its initial benefits bumped up to keep in step with increases in real wages. Mr. Obama has spoken time and again about the need to control entitlement spending, but we are now seeing that in practice he can't live with a zero COLA increase for even a single year after a previous year's windfall.
This $250 gambit also underscores the dishonesty behind the budget math propping up ObamaCare. Democrats are claiming that half of the new entitlement's outlays will be "paid for" with Medicare cuts in future years. But if Democrats can't tolerate a zero COLA for one year in Social Security, how in the world are they going to bless $500 billion in cuts to doctors, hospitals and other Medicare reimbursements? Mr. Obama is the youthful St. Augustine of entitlement reformers: Lord, make me chaste, but not yet.
The real calculation here is political and comes right out of White House strategist David Axelrod. Every poll shows that seniors are among the most opposed to ObamaCare—by more than a 10-point margin in a late-September Gallup survey. Democrats are panicked that the zero COLA will feed senior opposition to health care and stop their attempt to ram it into law in the next few weeks. Mr. Obama's $250 checks are essentially bribes, a sort of political anesthesia intended to hush up seniors until the legislation is on the books.
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