Once again it appears that Obama is preparing to redistribute taxpayer’s money to a favored constituency, budget deficit or not.  The next stop on the Obama Money Train, it appears, are senior centers and nursing homes around America where he will come riding in with a pile of $250 checks, totaling to $13 or $14 billion worth of increased debt depending on who happens to be counting.  The move is already being applauded (of course) by seniors groups and the AARP, and has the support of top Democrats in Congress.  If the Associated Press is to be believed, it looks like there’s even Republican support, though they’re at least (pretending to be) looking at the increase in deficit spending with concern.

The money handout comes, supposedly, as a result of the formula used for calculating annual cost of living adjustments (COLA) for Social Security dictating that there would be no increase in payouts this coming year. COLA is based explicitly on inflation and is intended to make sure that the purchasing power of payments to beneficiaries will not diminish over time.  Falling gas prices and a stale economy have actually caused a slight bit of deflation over the course of the past year.  To offset the lack of an official increase from COLA, Obama apparently wants to give away $250 to “senior citizens, veterans, retired railroad workers and people with disabilities.”

Looking over the list of recipients reveals an interesting collection of intended payees.  Senior citizens are obvious recipients as they are the primary beneficiaries of Social Security.  People with disabilities also make sense, because many of them are eligible for Social Security as well.  The payment to veterans is a little surprising; I wouldn’t have thought that they are on Social Security any differently than the rest of us, though many do get government pensions.  And then there are the retired railroad workers; where did that come from?  Plus, looking over another article, it looks like maybe all retired government folk (and railroad workers) might actually receive the benefit, whether they qualify for Social Security or not.

I wonder how many other favored constituencies might be added to the list before it’s all over.

Of course, the correct number to add is something on the order of negative four.  COLA is meant to maintain a level of purchasing power for Social Security beneficiaries, not to be a perpetually increasing rate of wealth redistribution from the young to the old.  We should be thankful, in fact, for the stagnation, as it increases seniors’ purchasing power without driving the program closer to its already impending bankruptcy.

As for the notion mentioned in the article that seniors deserve more because the cost of drugs has gone up, why is the payout not $250 to everyone who buys prescription drugs?  If that was really the concern, tying the money to drug purchases is the only logical way to address it directly.  Of course, the cost of drugs is being handled a different way: Medicare D is seeing an increase, which will serve to offset the (supposedly) skyrocketing cost of prescription drugs.

It is probably to anyone’s political turmoil to vote against this latest round of absurdity.  Nevertheless, seniors are going to get exactly what they deserve under the law.  There is nothing unfair about honoring a standing agreement.  It is, however, quite unfair to the younger generations to siphon their money and change the rules at a time when wallets are already tight and nearly one in ten members of the working population is not actually working at all.

Tags: economics, social security, spending