Obama Asks Congress for $250 Checks for Seniors

On Wednesday, President Barack Obama called on Congress to approve $250 payments to more than 50 million seniors to make up for no increase in Social Security next year, which will be announced by the SSA Thursday. In a statement, Obama said:

"Even as we seek to bring about recovery, we must act on behalf of those hardest hit by this recession. 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."

Next year would be the first since automatic adjustments were adopted in 1975 that no Social Security increases have taken place. There are bills already in Congress similar to Obama's proposal.

Besides those receiving Social Security, 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. However, those who qualify for more than one type of payment from the above list would only receive one, in total.

The cost of such payments were estimated by the White House to be $13 billion. President Obama stressed that he would not allow the payments to come out of the Social Security trust funds, which are already in danger of eventually running out of money. Social Security already is projected to pay out more in benefits than it collects in taxes in each of the next two years.

However, the Obama administration did not suggest an alternative source of funds for the checks. Advocacy groups cheered the proposal, saying that seniors anticipate an increase, even a slight one, annually.

"The likelihood of losing an average annual COLA increase of about $200 to $300 in 2010 may sound like no big deal to some, but for millions of seniors who've already seen a third of their Social Security eaten up by health care costs, this proposed COLA relief could truly make the difference" said Barbara B. Kennelly, a former Democratic member of Congress from Connecticut who now heads the National Committee to Preserve Social Security and Medicare.