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No Social Security COLA In 2010

ROBERT SIEGEL, host:

This is ALL THINGS CONSIDERED from NPR News. I'm Robert Siegel.

Today, on a trip to New Orleans, President Obama spoke about the state of the economy. Mr. Obama said even though inflation is in check, people on fixed incomes are still facing hardship. And he told the New Orleans audience that's one reason he's backing a plan to send out $250 checks next year to more than 50 million Americans. The checks would go to Social Security recipients, veterans and the disabled. Mr. Obama has not said where he'd get $13 billion to pay for that program. NPR White House correspondent Scott Horsley joins us now.

And Scott, the White House announced this idea just as word was coming out that Social Security recipients would not be getting a cost of living increase next year. What's going on here?

SCOTT HORSLEY: Well, Robert, it's pretty simple. Seniors and others who collect Social Security are not getting a cost of living increase because the cost of living has not increased. In fact, according to…

SIEGEL: It decreased.

(Soundbite of laughter)

HORSLEY: That's right. According to the Labor Department's calculations, it went down about two percent in the last year. One could argue, therefore, seniors - even if their checks stayed the same - will have more buying power than they have in the past. But that's not good enough for the White House, and so they want to send a one-time check to all the people who get Social Security and veterans' benefits of $250 some time next year. They point out that other parts of the stimulus package extend into next year. And so, in a way, this is just putting seniors on the same plane as workers.

SIEGEL: Well, is the White House calling this the much discussed second stimulus?

HORSLEY: No, they are pointedly not referring to this as a second stimulus package. The administration has said it supports extending some pieces of the stimulus measure that are due to expire, including unemployment benefits, government subsidies for health insurance. And now they want to provide again a second $250 check to Social Security recipients. But they - and they certainly do hope that retirees will spend that money and use it to stimulate the economy. In a statement yesterday, President Obama said this could be a benefit not only to the recipients, but to their communities and all the people who get that money.

SIEGEL: It's got the language of stimulus…

HORSLEY: That's right.

SIEGEL: …but not using the word stimulus.

HORSLEY: The multiplier effect. But they don't want to call it a second stimulus because that might suggest that the first stimulus is somehow not doing its job.

SIEGEL: Which is what some Republicans are saying in Congress.

HORSLEY: It's exactly what Republicans are saying, yes.

SIEGEL: Now, is the White House saying anything about how it would pay for this round of $250 checks?

HORSLEY: No, the only thing the president said yesterday in endorsing this idea is that the money should not come at the expense of the Social Security Trust Fund. But other than that, he says he's basically willing to work with Congress on a way to pay for this. And in fact, it's possible that the checks won't be paid for at all, that the government would simply borrow more money to send these checks out - $13 billion, as you say. Now, the administration has generally taken the position that new programs ought to be paid for either with additional revenues or compensating spending cuts elsewhere in the budget. But they say when it comes to an economic stimulus measure, that's not really what you want to do, it doesn't make sense…

SIEGEL: Not that this is a stimulus.

(Soundbite of laughter)

HORSLEY: That's right. But you don't want to be pumping money in the economy with one hand and taking it out with the other, so they're willing to let this not be paid for. If that's the way it goes, you know, maybe the senior should give that money to their grandkids because they'll be the ones who have to pay it back.

SIEGEL: What do you think is the political advantage here for the president, to propose this kind of payoff to seniors?

(Soundbite of laughter)

HORSLEY: Well, no one is, of course, would suggest that the affection of seniors can be bought for a measly $250, but it can't hurt. And this is the group where President Obama has the most trouble. There was a Gallup poll that came out this week showing the president's overall approval rating at about 54 percent, that's actually up a little bit.

SIEGEL: Mm-hmm.

HORSLEY: But his approval rating among those 65 and over, just 46 percent. And that's been very consistent. Seniors are the group that are least likely to approve the president's performance. It's the one demographic group he lost in last year's election. And significantly for the White House, it's the one demographic group that can pretty much be counted on to vote in next year's election.

SIEGEL: That's right.

(Soundbite of laughter)

SIEGEL: That's the group that turns out. Thank you, Scott.

HORSLEY: My pleasure.

SIEGEL: That's NPR White House correspondent Scott Horsley. Transcript provided by NPR, Copyright NPR.

NPR transcripts are created on a rush deadline by an NPR contractor. This text may not be in its final form and may be updated or revised in the future. Accuracy and availability may vary. The authoritative record of NPR’s programming is the audio record.

Scott Horsley is NPR's Chief Economics Correspondent. He reports on ups and downs in the national economy as well as fault lines between booming and busting communities.
Prior to his retirement, Robert Siegel was the senior host of NPR's award-winning evening newsmagazine All Things Considered. With 40 years of experience working in radio news, Siegel hosted the country's most-listened-to, afternoon-drive-time news radio program and reported on stories and happenings all over the globe, and reported from a variety of locations across Europe, the Middle East, North Africa, and Asia. He signed off in his final broadcast of All Things Considered on January 5, 2018.
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