Obama Increase Likely for Low-Income Elderly

By Andrew Taylor, Associated Press

January 13, 2009

More than 7 million poor people who are elderly, blind or disabled and receive cash benefits averaging $477 a month could get an extra monthly payment as part of President-elect Barack Obama's $800 billion economic recovery plan.

Democratic congressional aides said the idea of an extra Supplemental Security Income payment is gaining traction on Capitol Hill as lawmakers and staff aides hold daily meetings to work out details of the upcoming stimulus bill. The aides spoke on condition of anonymity to discuss the closed-door negotiations.

Democratic lawmakers hope to have an economic stimulus bill ready for Obama's signature by mid-February, although officials indicated Monday night that numerous provisions are unsettled.

Several said the emerging legislation likely will provide at least $70 billion over the next two years to help states meet the demand for Medicaid, which provides health care for low income people, and another $25 billion more to help individuals who cannot afford to pay for private, post-employment health benefits.

An estimated $35 billion is tentatively ticketed for additional unemployment benefits.

The tax provisions remain in flux, with Obama's call for a break for companies that create new jobs described by Democratic officials as all but dead. Several Democrats prefer to use the funds to make sure upper middle class families are not ensnared by the alternative minimum tax.

Democrats are more favorably inclined toward Obama's proposal for a tax break for lower-paid individuals and couples, of up to $500 and $1,000.

The officials who described the provisions did so on condition of anonymity, saying they were not authorized to discuss the details.

The idea of a one-time, additional SSI payment this year would cost about $4 billion, which would go to more than 7 million poor people enrolled in the program. Most of them are disabled, though about 2 million poor seniors would also benefit.

The relatively low cost of the idea seems to help its chances, though it's not a sure bet to be included in the final economic recovery package, which will blend tax cuts for individuals and businesses with huge spending initiatives such as aid to state governments, an increase in local school aid, and infrastructure projects such as road and bridge construction and repair.

"It's in the package as of now," said an aide to a top House leader.

The idea meets one of Obama's key criterion for the stimulus bill, which is to speed money into the hands of people who are likely to spend it. One criticism of last year's $600-1,200 tax rebate checks to individuals and couples was that many people simply saved the money or paid down debt instead of injecting it into the economy through spending.

Even with their monthly checks, SSI recipients remain in poverty, and they're more likely to spend the money quickly.

"These people are extremely poor," said Bob Greenstein, founder of the liberal Center on Budget and Policy Priorities. "I certainly think, and I think the Obama people have thought that this is a very sound stimulus idea. It would have one of the highest bangs for the buck."

Obama transition spokesman Nick Shapiro would not confirm that Obama supports the idea. The transition has been tightlipped about many elements of the economic recovery package as it is being negotiated.

Supplemental Security Income delivers payments of up to $637 per month to individuals and $956 to couples. About one-fourth of recipients are 65 or older. 

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