Spring has come to recession-era America, which means that all across the nation, millions of old people are emerging from hibernation and hobbling out to their mailboxes in search of their long-awaited Social Security stimulus checks. The first round of payments, which were provided by the American Recovery and Reinvestment Act, have just been mailed out. So while the big banks may be raking in their trillions, U.S. elders–along with recipients of SSI and veterans’ benefits–will soon have a whopping $250 to protect them from the ravages of the economic meltdown.
And it looks like we’d better make it last, since it’s the last addition to our monthly checks that we’re likely to see for a long, long time. Federal forecasts show that for the first time in more than three decades, there will be no increase in Social Security benefits next year. In fact, the Congressional Budget Office projects that because of low inflation caused by the recession, there will be no cost-of-living adjustment (COLA) to Social Security until 2013.
As the New York Times reports, “In theory, low inflation is good for people on fixed incomes.” In the current circumstances, however, “The absence of a cost-of-living adjustment, calculated under a formula set by law, will be a shock to older Americans already hit by plummeting home values, investment losses and rising health costs.” While Social Security levels remain frozen, the premiums and co-pays for the Medicare Part D prescription drug program will no doubt continue to rise steeply, as they have every year since the program began. For at least a quarter of Medicare beneficiaries (including working geezers like myself), Medicare Part B premiums will go up as well.
And if we don’t watch out, it might not stop there: The straw man of Social Security “reform” is yet again raising his scruffy head, this time courtesy of Congressional Democrats. As Roll Call reported last week:
In a year already jam-packed with major legislative initiatives, House Majority Leader Steny Hoyer (D-Md.) is breathing new life into the idea of tackling Social Security reform….Hoyer signaled that Democratic leaders may take steps to act on Social Security reform in the fall after Congress advances its two biggest priorities: health care reform and climate change legislation.
“Of our entitlement programs, I believe we would have the easiest challenge in reforming Social Security,” Hoyer said. “Frankly, I believe Social Security is not very difficult mathematically. It may be difficult politically, but not mathematically.”
The Washington Post confirmed that Hoyer is looking to create “a bipartisan consensus” for “overhauling the Social Security system.” Democrats, the Post reported, “have found a willing partner in the Senate,” where South Carolina’s Lindsey Graham “has stated his desire to work with President Obama to make changes to keep Social Security solvent.”
Graham has long been a supporter of Social Security privatization. But after what’s happened to people’s 401(k)s in the last year, even Graham has had to admit that dog won’t hunt. Instead, he now presents Social Security reform as a “math problem”: “You can do a combination of things, give a little here and give a little there, and get it done,” he said.
Anyone who supports the program that lifted millions of elders out of poverty should still be concerned by the ongoing disconnect between the “reform” rhetoric and Social Security’s actual fiscal soundness. (The nation’s private financial institutions, as Dean Baker has pointed out, only dream of being as solvent as the Social Security system.) Following Hoyer’s announcement, the National Committee to Protect Social Security and Medicare commented:
given the long list of critical challenges this nation faces right now…it’s hard to imagine why Social Security would share space at the top of the legislative priority list ….After all, Social Security is able to pay full benefits for at least 30 more years….
As I’ve written before, there are still plenty of powerful voices on the right who would like to preserve the myth of Social Security as a ticking time bomb that will one day land in the laps of the young. In doing so, they can create a phony intergenerational conflict that deflects attention from the true villains in our economic mess, while at the same time achieving their long-cherished dream of cutting entitlements. As William Greider has written, these forces are getting a new boost from the recession:
Governing elites in Washington and Wall Street have devised a fiendishly clever “grand bargain” they want President Obama to embrace in the name of “fiscal responsibility.” The government, they argue, having spent billions on bailing out the banks, can recover its costs by looting the Social Security system.
By now, we’re all used to witnessing these kinds of bait-and-switch tactics. But according to yet another Washington myth, we’re not supposed to see them coming from the Democrats.