WASHINGTON – President Barack Obama called on Congress Wednesday to approve $250 payments to more than 50 million seniors to make up for no increase in Social Security next year.
The White House put the cost at $13 billion. The Social Security Administration is scheduled to announce Thursday that there will be no cost of living increase next year. By law, increases are pegged to inflation, which has been negative this year.
It would mark the first year without an increase in Social Security payments since automatic adjustments were adopted in 1975.
"Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession," Obama said in a statement. "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."
Obama's proposal is similar to several bills in Congress. The $250 payments would also go to those receiving veterans benefits, disability benefits, railroad retirees and retired public employees who don't receive Social Security. Recipients would be limited to one payment, even if they qualified for more.
The payments would match the ones issued earlier this year as part of the massive economic recovery package enacted in February. Several key members of Congress have said they are open to providing relief to seniors to make up for no increase in Social Security payments.
"We're looking at a way to address it," said Sen. Max Baucus, D-Mont., chairman of the Senate Finance Committee, which oversees Social Security. "I'm not sure what the exact answer is yet, but we're looking at ways to address that."
Rep. Charles Rangel, D-N.Y., chairman of the Ways and Means Committee, which has jurisdiction over Social Security in the House, said he supports the $250 payments.