President Obama's $250 check for seniors: A payment with 2010 in mind
Filed under: Retirement, Columns, Economy
Roughly 300 days in to his presidency, President Barack Obama, who campaigned that he would be the nation's first "post-partisan" president of the modern era, has lately exhibited decidedly partisan economic habits. Case in point: Obama's current proposal to send a second $250 check to every Social Security recipient, disabled veteran, railroad retirement recipient, and citizen who receives a federal and state pension instead of Social Security; the measure would cost about $14 billion. At first glance, the idea has merit: It would serve as an additional stimulus to keep economic momentum headed in the right direction. Aided in part by the fiscal stimulus package passed earlier this year, the U.S. economy started to recover in the third quarter, most economists agree, and putting more money into the hands of consumers will increase aggregate demand in an economy that needs all the demand it can get.
There are two problems. First, from a GDP-impact standpoint, allocating money to senior citizens is not the most effective use of stimulus dollars. Second, the act has more than a tinge of partisan politics associated with it.
Regarding GDP, the stimulus would be more effective if it, for example, extended unemployment benefits even longer or broadened the food stamp program. Economists know that dollars allocated to those two social support programs translate quickly into increased economic activity. The unemployed frequently use their modest unemployment benefits to pay for essentials such as mortgages or rents and utilities; those eligible for food stamps also tend to use their allocation quickly, for obvious reasons.
Given the above, it's reasonable to argue that Obama favors the $250 grant to senior citizens not solely for economic reasons, but for partisan political reasons as well: Seniors are part of his political base, and equally important, their voter turnout has historically been among the highest in the nation.
The $250 grant would also come after a dose of bad news for Social Security recipients: Due to low inflation, seniors won't receive a cost-of-living increase this year, the Social Security Administration announced. Also, when health care reform is passed, one group that might see an impact on its peripheral benefits – though probably not a reduction in essential health care services – is senior citizens. Now, keep in mind the clock is ticking: There is a congressional election in 2010. Is President Obama trying to shore-up support among seniors after what has been, by most accounts, a spate of bad news on the benefits front for them –- and in doing so attempt to help congressional Democrats in the 2010 election? The view from here argues that he is -- that Obama's $250 senior check is rooted more in partisan politics than in economics.
Now, no doubt more than a few Republicans will probably chime in with sentiments along the lines of: "Hey, President Obama has been blatantly partisan all along;" or "He's never acted in a nonpartisan manner," etc. Of course, some of these Republicans would probably have described Mother Teresa of Calcutta as a "blatant partisan" or as "another tax-and-spend liberal." Point: Hard-core Republicans aren't the most objective observers concerning whether or not a Democratic president is taking a bipartisan approach.
But the Republican lens aside, it's pretty clear that in this case, Obama is attempting to shore-up a portion of his base in the Democratic Party, as well as maintain good standing with those senior citizens who are registered as independent/unaffiliated voters. Sending out those $250 checks is largely an act of partisan politics, and it's a surprisingly unsophisticated move from a savvy chief executive.
Now, given its brazen politics and bluntness, should Republicans hold press conferences and rail against the idea, saying it's simply more government spending, and an example of special-interest politics at its worst?
Sure, they should -- just as long as those Republicans want to lose more seats in the House and Senate in 2010.
Financial Editor Joseph Lazzaro is writing a book on the U.S. presidency and the U.S. economy.
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Reader Comments (Page 1 of 1)
11-01-2009 @ 3:05PM
Zeke said...
This disabled former Democrat citizen is taking the $250 and donating it to the Republicans. Chairman Maobama is going to ruin this country and the Republicans are the only party representing the real and true majority people now.
I don't care if I have to eat catfood next week....I would rather give the money to a good cause and save my great medical plan then spend it and watch the Empty Suit for Hire ruin what is left of my life and irrevocably turn this country into some sort of lousy, do-nothing, arrogant European Social Democracy.
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11-01-2009 @ 5:21PM
Sebastian said...
Zeke notwithstanding, I must say that of the seniors I know; and I know a few, they'll be spending that $250. Not sure if spending it is the best for GDP...wait, it is the best for GDP.
If the average income for seniors in 2005 was $19,000/year, I'm thinking that the $250 will go right back into the economy; just like their COLA increases.
Or do they save it?
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11-02-2009 @ 1:53AM
MADDAT52 said...
Half what he took from them by cutting the cost of living increase for next year and no doubt the next several years. It's more than likely a permanent freeze.
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11-02-2009 @ 4:12PM
Dr. Erich H. Loewy said...
I am stunned that all sorts of self-serving possibilities for sending this check to retirees are entertained but that no one has suggested that this intelligent, compassionate President is doing this to help out this age group many of whom are poor. One can quibble that many are far from poor. That could be easily fixed by saying those who earn less than "X" will receive this.
I find this most troublesome. Have we so lost our relationship with our brothers and sisters so completely that we do not even consider that others have other than self-serving motives. Or are we looking at ourselves in the mirror.
Dr. Erich H. Loewy
Prof & F'dg Chair, Bioethics (Emeritus)
U of CA, Davis
Gold River, CA 95670
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11-03-2009 @ 5:50PM
wanda said...
ZEKE, whatever you call yourself, do you not have grandparents? ,or have you ever sit and asked how life is going? also,( we oldtimers) actually put you where you are today. before you run your lip, you had better stop and think.
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11-03-2009 @ 8:14PM
zeke said...
Wanda,
How dare you try to chastise me or ask about my family. I did have grandparents. They are all dead. So is most of my family. I am a senior citizen. A disabled one at that. I have to believe that you aren't talking to me (hopefully) because otherwise your post makes no sense.
11-04-2009 @ 2:34AM
Stephanie said...
As a disabled person, I know I will be spending my check the day I receive it. Imagine just for a second being a young disabled mother with a 3 month old baby and your disabled veteran husband. Now imagine that your whole family receives 2000 dollars a month, for all three of you. 1100 of that goes to rent, and you have 900 dollars for food, diapers, clothing, medicine, ect. This is extremely difficult, and with no cost of living increase, we need literally every penny we can get. My husband served his country and now his country is not serving him very well. I think if helping the people who need help the most also benefits the president, then it just means that it is a win-win. It does not mean that it is an insincere action or that the people receiving the assistance do not need or deserve it. Also lets not forget that the former president also gave out stimulus money to social security benefits in the amount of 300$. Are going to criticize a Democrats for doing exactly what a republican did. That sounds a little partisan to me!
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