The Rush to Keep Seniors Happy

Washington Matters

The Rush to Keep Seniors Happy

Amid all the partisan rancor in Washington, Democrats and Republicans will manage to agree on at least one rather expensive piece of legislation this fall with little or no bickering: Making sure that senior citizens don't see their 2010 Social Security checks decline. That political catastrophe would otherwise be a virtual certainty, owing to historically low inflation numbers for 2009. Lawmakers will do whatever it takes -- bending a rule or two, and even sending out checks to seniors if need be -- to keep this constituency happy.

Lawmakers on both sides of the aisle will soon be hearing from elderly folks in their districts, if they haven't already. Inflation numbers released this week made official what's been suspected for a while: Because inflation is so low, there will be no cost of living adjustment to Social Security checks in 2010 -- the first time in more than a quarter century that seniors won't get a COLA.

If that weren't bad enough, benefit checks could actually shrink in 2010 for many seniors for two reasons. First, premium payments under the Medicare Part D prescription drug program are scheduled to rise. Many of the millions of seniors enrolled in Part D have their premium payments deducted from their Social Security, so those checks are set to be smaller come January.

The second problem involves the part of Medicare -- Part B -- that covers doctor visits and other outpatient services. The Part B premium is scheduled to jump from the current $96.40 a month to $104.20 in 2010. For about 75% of Medicare beneficiaries, that won't happen. Because federal rules bar a reduction in Social Security benefits if Part B premiums rise, they'll be allowed to keep paying $96.40 next year. The rules don't, however, cover single beneficiaries who have adjusted gross incomes of more than $85,000 a year or married couples with AGI over $170,000. So their Social Security checks will shrink if nothing is done. New Medicare enrollees also have to pay the higher Part B premium.

Fixing the Part B problem will cost $2.8 billion, so you  figure Congress will get bogged down in fighting over ways to pay for it, right? Wrong. It looks like lawmakers will simply sidestep the issue and not bother trying to cover the extra cost. Legislation that waives the Part B premium increase for those not protected by federal rules sailed through the house on a 406-18 vote a couple of weeks ago -- with no tax hikes or spending cuts attached to offset the loss to the Treasury. It's a safe bet that the Senate will follow suit, despite some grumbling from one senator about "pandering" to seniors while driving up deficits.

Mitigating the effect of higher Part D drug premiums is a bigger problem. There's no easy logistical way to avoid smaller monthly checks for many seniors, but lawmakers are looking to make up most of the difference by sending an extra check to seniors -- probabl $250 per beneficiary. That plan, endorsed Wednesday by President Obama, would cost more than $13 billion True, Sen. Bernie Sanders (I-VT) and Rep. Peter Fazio (D-OR) have proposed paying for this largess by raising payroll taxes on people making between $250,000 and $359,000. but that idea is guaranteed to raise the hackles of a lot of lawmakers, and is sure to fall by the wayside. Politicians on both sides of the aisle have their eyes on the prize -- the senior citizen vote -- and they aren't going to let a little thing like budget integrity slow them down.

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