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Obama gave the GOP a hanging curve ball with his latest effort to buy off seniors.

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Obama Tries to Bribe Seniors With COLA

Obama gave the GOP a hanging curve ball with his latest effort to buy off seniors.

Barack Obama’s plan to spend $14 billion by sending $250 checks to 57 million recipients of Social Security is the political equivalent of a fat hanging curve ball for the Republicans. Unfortunately, the Republicans are looking like baseball players in the old Bugs Bunny cartoon who take swing after swing at a ball that’s moving through the air with tantalizing slowness while they becoming increasingly frustrated and looking increasingly inept, missing  the ball time after time.

Because of the substantial deflation that our economy went through last year, not least the collapse of energy prices from the peak of the oil "bubble", the Consumer Price Index for Urban Wage Earners (CPI-W), which is the basis for calculating Social Security cost-of-living adjustments (“COLA”s), is down from the same period a year ago. This means, for the first time since the CPI-based formula came into effect in 1975, that there will be no COLA increase for 2010.

Before you start feeling sorry for Social Security recipients, remember that the COLA calculation (using third quarter data so that the adjustment can be effective by December) allowed a 5.8% Social Security payment increase for 2009. This was despite a fall in consumer prices in the last three months of 2008 which was so dramatic that the CPI was actually negative for the year for the first time since Dwight Eisenhower occupied the White House.

In other words, senior citizens, veterans, the disabled and other recipients of Social Security received nearly a six percent raise in 2009 while the cost of living declined and the rest of the nation suffered large investment losses.

Simultaneous with the news that tens of millions of senior citizens won’t be getting their annual raise, the Obama Administration has noticed, as Gallup reported a few weeks ago, that senior citizens are the age group most opposed to Obama’s health care “reform” plans. It’s a maxim in politics that someone’s likelihood of voting is proportional to his age.  Thus, politicians take the old folks’ views seriously.

So it’s little surprise that the Obama Administration is championing a measure (S.1685) introduced in the Senate by the socialist Bernie Sanders (I-Vt.) to send $250 checks to Social Security recipients to satiate their COLA addiction  According to Sanders, “For 2010, the least we can do is to provide seniors with a modest increase in their benefits…"  What Sanders means is “the least we can do” is burden our children with more billions of dollars of debt in order to try (and fail) to buy off the votes of seniors who are rightly skeptical of Obamacare.

It’s all the more urgent for Democrats with H.R.3200, the House’s version of Obamacare which was the tinder for hundreds of “town hall” prairie fires across the country in September, coming up for a vote in the full House soon.

The head of the AARP, the senior citizen-targeted lobbying arm of the Democratic Party, said “Without relief, millions of older Americans will be unable to afford skyrocketing health care and prescription drug costs, as well as other basic necessities."  Will one $250 payment really take care of your grandmother’s health care costs or fool her into voting for health care “reform” which she knows will cost, as bank robbers once demanded, “your money or your life?”

There are plenty of liberals who oppose the Democrat’s attempted political bribe, including the editorial board of the Washington Post and the Kansas City Star, and the left-leaning Center on Budget and Policy Priorities (“CBPP”) which says that “the case for a Social Security COLA in 2010 is weak.”

Yet despite the fact that most seniors should view the $250 suggestion as somewhere between silly and insulting, Republicans are completely missing the obvious opportunity to score political points while doing the right thing.  Instead of honestly calling the Obama/Sanders bribe a tactic worthy of ACORN, House Republican Leader John Boehner (R-OH) has said that he’d support the measure if the money came from unspent “stimulus” funds.

And that’s not the worst of it: Some Republicans in the House seem to think they need to out-do Democrats in paying off seasoned citizens. North Carolina’s Walter Jones has introduced a measure to provide an “emergency” cost of living increase and Rep. Rodney Alexander (R-La.) has a similar proposal. If anything, the Republicans proposals are even worse than the Obama/Sanders plan because rather than being a one-time gift of other people’s money, they would add to the Social Security benefit for purposes of all future calculations.  Even the liberal CBPP says “These proposals are costly. A 3 percent increase would cost $15 billion to $20 billion annually in Social Security benefits in 2010 and beyond.”  (emphasis added)

The moral hazard of Obama’s attempted health care payoff is enormous. Social Security COLAs have been a matter of formula rather than politics for more than 3 decades, precisely to keep the issue out of politicians’ hands.  If this payoff goes through, the opportunity for future shenanigans expands dramatically, and you can bet any future shenanigans will make $14 billion look like peanuts.  

While seniors will recognize the payment as a transparent attempt to buy their approval for Obamacare, they will cash the checks…and continue to oppose plans to ration health care, particularly when the rationing is being done by people who have explicitly said that oldsters should have the good manners to stop hanging on so long.

It is rare for Democrats to offer such a large political opportunity to Republicans with a proposal that even the average liberal can see is a terrible idea. But, from the GOP leadership on down we see an utter inability to take a position that is simultaneously the moral high ground, economically rational, and a political winner.  With the Democrats’ obvious desperation as they envision a firm-handed electoral spanking in 2010, the GOP should pounce, aggressively arguing against this bribe and yelling from every rooftop “We trust American senior citizens not to sacrifice our nation’s health care system in return for a $250 check from their grandchildren.”

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Written By

Ross Kaminsky has been a professional derivatives trader for over 20 years. Ross is a fellow of the Heartland Institute and writes about political economy and current events at Rossputin.com. He also contributes to blogs for the National Taxpayers Union and FreedomWorks among others.

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