Cash For Seniors Proposal Touches Off Dispute
Sen. Bernie Sanders (I-VT) speaks about petitions urging Congress to pass a $250 check for seniors. - Sen. Bernie Sanders (I-VT) spoke at a news conference last month to urge Congress to pass a $250 one-time payment to seniors in 2010. (Win McNamee / Getty Images)
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.
"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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MELISSA BLOCK, host:
Last week, we told you about the White House proposal to give every Social Security recipient a check next year for $250. The idea is to make up for the fact that seniors will not get a cost-of-living adjustment. So what do seniors think? NPR's Larry Abramson has that story.
LARRY ABRAMSON: A drop in energy prices has helped drive inflation backwards. Prices are getting cheaper. That's good, right? No, that's bad because Social Security increases are tied to inflation. Lower prices means payouts will remain flat for the first time in decades, that's despite the fact that seniors are facing real increases in prices, according to AARP's Cristina Martin Firvida.
Ms. CRISTINA MARTIN FIRVIDA (Director of Economic Security, AARP): 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.
ABRAMSON: Just ask Sonja Asher of Minneapolis, a widow completely dependent on the $924 a month she gets from Social Security. Asher, who is 83, says energy prices may be down, but the costs of owning a home and a car are going up.
Ms. SONJA ASHER: House insurance, car insurance. Yes, it's not good. For gas, I mean, they seem to raise it according to the gas pump prices, and that's not the whole cost of a car for sure.
ABRAMSON: Nevertheless, members of Congress have proposed about a three percent cost-of-living increase. Jim Horney of the Center on Budget and Policy Priorities says such an increase would fly in the face of the 1975 law that instituted regular cost-of-living increases for Social Security.
Mr. JIM HORNEY (Director of Federal Fiscal Policy, Center on Budget and Policy Priorities): I think that would be a bad precedent, and that's why we recommend that you don't provide a cost of living in this situation, where the cost of living hasn't gone up.
ABRAMSON: Horney does like the president's idea of a one-time cash payment, but deficit hawks like Chris Edwards of the Cato Institute say there is no justification for giving seniors special treatment right now.
Mr. CHRIS EDWARDS (Tax Policy Director, Cato Institute): Most people are not getting wage increases this year. So, you know, for example, young families with children, I mean, you know, nanny care and that sort of thing are rising, and yet we don't jump out and give them a special payment.
ABRAMSON: AARP's Cristina Martin Firvida says, in fact, seniors are facing special hardships because their housing values and retirement accounts have crashed in value.
Ms. FIRVIDA: What they do not have is the luxury of time to see the value of those investments, of their home, come back.
ABRAMSON: One problem is that this proposal treats 50 million seniors as a homogenous group, but the stories seniors tell show just how individual their needs are.
Noreen Martin is 92 and lives in Brighton Gardens, an assisted living facility near Washington, D.C. She feels that prices of things that matter to her are climbing.
Ms. NOREEN MARTIN: Nearly two bucks for animal crackers? Please. I have a three-year-old, that's why I buy animal crackers.
(Soundbite of laughter)
ABRAMSON: A three-year-old great-granddaughter. But Noreen Martin has other income besides Social Security, and she lives in a comfortable high-rise. She says the proposal to give every senior a payout doesn't make sense.
Ms. MARTIN: 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.
ABRAMSON: Martin says she would probably not spend the money. She would just give it to her children, and that might help them pay for a proposal that could add more than $13 billion to the deficit.
Larry Abramson, NPR News.
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MICHELE NORRIS, host:
You're listening to ALL THINGS CONSIDERED from NPR News. Transcript provided by NPR, Copyright National Public Radio.
