Last week the government announced that there would be no cost-of-living adjustment (COLA) in Social Security benefits next year because the consumer price index it uses shows no inflation over the last two years. In fact, the index shows a slight decline in prices over the last two years.
But this has not stopped the grumbling of many retirees who want more money next year. So with an election just around the corner, the White House and some congressional leaders are suggesting that the government should simply write $250 checks to Social Security beneficiaries. The Concord Coalition opposes this plan as fiscally irresponsible and unfair to younger taxpayers.
In a new blog post Diane Lim Rogers, chief economist for the Concord Coalition, explains why she takes a dim view of the $250 plan, noting that a similar proposal came up a year ago. It is, she complains, simply pandering to one segment of the population. Nor would the money be a particularly effective form of economic stimulus, she says.
She reiterates her argument from a year ago: “Because seniors are guaranteed to receive Social Security benefits regardless of the strength or weakness of the economy, they more than others have had a significant part of their income protected in this recession, and they received special aid in the (February 2009) stimulus package, too.”