President Obama announced his support for an additional $250 Economic Recovery Payment to the seniors, veterans and people with disabilities who are struggling to make ends meet with retirement savings that have not fully recovered from their losses over the first year of the recession.
The President’s call for additional support to seniors comes on the heels of the Social Security Administration’s announcement that there will be no cost-of-living increase for 57 million beneficiaries next year as consumer prices have fallen.
It is the first time since 1975 that, Social Security benefits have not increased year over year since the cost of living adjustment was put into effect.
Said the President, “Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession. That is why I am announcing my support for an additional $250 in emergency recovery assistance to seniors, veterans, and people with disabilities to help them make it through these difficult times. These payments will provide aid to more than 50 million people in the coming year, relief that will not only make a difference for them, but for our economy as a whole, complementing the tax cuts we’ve provided working families and small businesses through the Recovery Act,” said President Obama.
“This additional assistance will be especially important in the coming months, as countless seniors and others have seen their retirement accounts and home values decline as a result of this economic crisis. I want to compliment all the members of Congress who have been working to address these challenges, especially Senators Reid, Baucus, Sanders, and Lincoln, Speaker Pelosi, and Representatives Rangel, McCarthy, and DeFazio.”
Fact Sheet
The President’s proposal would provide an additional year of the $250 “Economic Recovery Payments” initially enacted under the American Reinvestment & Recovery Act (ARRA). Under this proposal:
· 57 million people would benefit. These include 49 million Social Security beneficiaries, 5 million Supplemental Security Income beneficiaries, 2 million veterans benefit recipients, 0.5 million railroad retirement and disability beneficiaries, and also about 1 million public-employee retirees not entitled to any of the previous benefits.
· The benefit would be $250 – or equivalent to a 2 percent increase in benefits for the average Social Security retiree beneficiary. Under the rules no person could “double dip” and receive a $250 Economic Recovery Payment through more than one program. Nor could they receive both an Economic Recovery Payment and the Making Work Pay tax credit.
· The total cost of the proposal would be $13 billion – and would not hurt the solvency of Social Security. The President is committed to ensuring that the $13 billion cost of the proposal does not reduce the solvency of Social Security or other social insurance programs.
· Would extend an effective relief program. To date Economic Recovery Payments have been made to 55 million people including seniors, veterans and people with disabilities and totaled $13.7 billion. Most of the checks were mailed out in May 2009.
In addition to this legislative proposal, the Internal Revenue Service and the Department of Treasury will take steps this week to prevent reductions in the amounts that workers can contribute to IRAs, 401(k)s, and other aspects of tax-favored retirement systems in 2010 that some feared could result from negative inflation over the past twelve months.
