The National Committee to Preserve Social Security and Medicare Foundation and the Economic Policy Institute today released a report, Down Payment on Economic Recovery,? that finds that the $250 lump-sum payments that went to recipients of Social Security and Supplemental Security (SSI) benefits were effective economic stimulus. The report?s authors, EPI researchers Josh Bivens and Kathryn Anne Edwards, argue that further job-creation efforts should include another such payment.According to the report, lump-sum payments to Social Security and SSI recipients are an extremely effective job creator:
?While its share of the overall Recovery Act spending was very small, this lump-sum payment was one of the quickest-acting components of the overall package?the majority of payments were received just months after the Act was passed (by the end of May 2009). This Social Security and SSI payment by itself likely boosted GDP by roughly 0.5% in the second quarter of 2009, which would roughly translate to about 125,000 jobs created or saved due to these payments.?— ?Downpayment on Economic Recovery,? September 2010
2011 is expected to be the second year in a row in which Social Security beneficiaries will not receive a cost of living allowance(COLA). However, despite a relatively low rate of general inflation, seniors’ costs are going up. Health care costs especially are rising rapidly, and the elderly on fixed incomes spend a significantly larger share of their income on health care. Ways and Means Social Security Subcommittee Chairman Earl Pomeroy (D-ND) and Senator Bernie Sanders (I-VT) have introduced legislation that would provide an additional one-time $250 payment if there is no inflation adjustment again next year.
?This report confirms that one-time payments to Social Security beneficiaries benefit more than just the individuals who receive them, they also provide real stimulus to our weakened economy. This type of stimulus is a win-win for our nation. It provides COLA relief for millions of seniors suffering in this economy who have already see a third of their Social Security eaten up by health care costs, while also boosting our economy and saving jobs.? Barbara B. Kennelly, President/CEO, National Committee to Preserve Social Security and Medicare
The full analysis, ?Down-Payment on Economic Recovery,? is provided online here.