The Senior Citizens League (SCL), a nonpartisan senior advocacy group, is asking Congress to issue a fourth round of stimulus payments—with the caveat that they would go only to retired and elderly Americans.
According to the group’s email, the SCL plan to push for a special one-time stimulus payment to help offset the cost of Medicare and other expenses.
Strangely, although the pandemic has been ruinous for the U.S. economy in many ways—causing, for instance, millions of jobs to be lost during the early days of quarantines and lockdowns—inflation has remained persistently high. This can be explained in part by the government’s decision to “stimulate” spending by pushing out three previous rounds of stimulus checks—a $1,200 check in March 2020, a $600 check in December, and a $1,400 check in March 2021. While these three payments had their fair share of detractors, there is little doubt that they helped to incentivize economic activity that would not otherwise have existed, keeping cash flow steady and helping to stabilize the economy during an uncertain moment.
Research has shown that elderly Americans tend to spend money differently than younger Americans, with a larger portion of their income devoted to medical bills and housing costs, rather than more mundane expenses such as eating out.
Because the amount of spending is directly linked to inflation, inflation numbers were consistently high throughout the pandemic. This factor is leading to the single largest cost-of-living adjustment on Social Security for forty years.
For the SCL, this boost is not enough to offset cost increases. “Soaring prices are battering the household budgets of Social Security recipients,” the group’s email wrote, noting that many of its members had cut spending during the pandemic by reducing their food and medicine consumption.
There are other complications as well, including increased prices for Medicare, which many seniors rely on to provide them with medical care. Higher incomes could also lead to decreased government benefits in some other areas—such as SNAP benefits, which are tied to income independent of inflation, and which could be reduced for some elderly families if their new incomes exceed the limit.
Social Security is designed to replace roughly 40 percent of a person’s pre-retirement earnings—a payout which most experts agree is nowhere near enough to adequately finance a person’s later years. For this reason, nearly all financial planners will recommend saving money during one’s lifetime to better provide for oneself after retirement.
Trevor Filseth is a current and foreign affairs writer for the National Interest.