The Senate will soon vote on whether to begin consideration of the Emergency Senior Citizens Relief Act, S.3985,legislation to provide a one-time $250 benefit to Social Security recipients and veterans, as well as other individuals whose federal benefits depend on the annual Social Security cost-of-living adjustment (COLA). This payment would be provided in lieu of a Social Security COLA, which will not be given in 2011 under the current statutory formula that was developed in 1975. A COLA has been paid each year since 1975, except 2010 and 2011.
Today, millions of Americans continue to face financial hardships during the economic downturn. Retirees and veterans are among the hardest hit by the recession, particularly those still financially struggling due to diminished retirement savings, dramatically reduced home values, and higher health care costs. In 2009, the Democratic Congress enacted legislation to provide them with a one-time $250 Economic Recovery Payment as part of the American Recovery and Reinvestment Act (P.L. 111-5). Now, for the second year in a row, our seniors and veterans face another year without a Social Security COLA.
S.3985 would address this issue by renewing the $250 payment provided under the Recovery Act to Social Security beneficiaries, veterans, SSI recipients, and Railroad retirees, and the $250 tax credit to government retirees who do not receive Social Security benefits. Since seniors living on fixed incomes are likely to spend this money, the $250 benefit would also provide a modest boost to the economy as we continue to emerge from the economic crisis. Furthermore, it should be noted that the Recovery Act provided the $250 benefit for only one year, even though working Americans were provided with a somewhat larger companion benefit for two years through the Making Work Pay tax credit. Renewing the Recovery Act’s $250 benefit for a second year would provide a modest measure of equity to seniors who have already worked and contributed to their communities throughout their lives.
On November 29, Senator Sanders introduced S.3985. Senator Reid filed cloture on the motion to proceed to the bill on December 6. A cloture vote on the motion to proceed to S.3985 is expected on Wednesday, December 8.
Earlier this year, on March 3, 2010, the Senate voted on the motion to waive a point of order against similar legislation sponsored by Senator Sanders, S.Amdt. 3353, to provide an emergency benefit of $250 to seniors, veterans, and persons with disabilities in 2010 to compensate for the lack of cost-of-living adjustment for this year. This motion was defeated by a vote of 47 to 50.
The following summary is provided by Senator Sanders’ office.
S.3985would provide an additional year of the $250 “Economic Recovery Payments” and $250 “Economic Recovery Tax Credit” enacted under the American Recovery and Reinvestment Act (P.L. 111-5).
- Under this proposal, 58 million people would benefit. These recipients would include over 50 million Social Security beneficiaries; 5 million Supplemental Security Income beneficiaries; 2 million veterans benefit recipients; 500,000 railroad retirement and disability beneficiaries; and approximately 1 million public-employee retirees not entitled to any of the previous benefits.
- Under this legislation, the Economic Recovery Payment (or Economic Recovery Tax Credit) would be $250, which is 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. In addition, no person would be able to receive both an Economic Recovery Payment (or Economic Recovery Tax Credit) and the Making Work Pay tax credit.
- The total cost of S.3985 is an estimated $14.6 billion, which would not hurt or reduce the solvency of Social Security or other social insurance programs.
- This legislation would extend an effective financial relief program. The Economic Recovery Payment (or Economic Recovery Tax Credit) under the Recovery Act has been provided to 55 million people, including seniors, veterans, and people with disabilities, for a total cost of $13.7 billion. Most of these checks were mailed to recipients in May 2009. The Economic Policy Institute has estimated that this initiative created or saved 125,000 jobs and boosted the Gross Domestic Product by 0.5 percent in the second quarter of 2009.
Senator Sanders introduced S.3985 on November 29, 2010. As of December 6, 2010, the following Senators cosponsored S.3985: Begich, Sherrod Brown, Casey, Gillibrand, Lautenberg, Leahy, Menendez, Reid, Schumer, Stabenow,and Whitehouse.
On December 2, 2010, Senator Whitehouse asked for unanimous consent that the Senate Finance Committee be discharged from further consideration of this bill and the Senate proceed to its consideration. However, Senate Republicans objected to the request.
On December 6, 2010, Senator Reid filed cloture on the motion to proceed to S.3985. The resulting vote is expected to be held on December, 8, 2010.
Earlier this year, on March 3, 2010, the Senate voted on the motion to waive a point of order against similar legislation sponsored by Senator Sanders, S.Amdt.3353, to provide an emergency benefit of $250 to seniors, veterans, and persons with disabilities in 2010 to compensate for the lack of cost-of-living adjustment for this year. This motion was defeated by a vote of 47 to 50.
At the time of publication, the Administration had not released a Statement of Administration Policy on S.3985. However, the White House has indicated the President’s support for a $250 Economic Recovery Payment this year for seniors, veterans, and people with disabilities whose benefits depend on the annual Social Security cost-of-living-adjustment.