Obama says "we must act on behalf of those hardest hit by this recession." But are they the hardest hit? How does he know? By what measure? Is it possible that, say, the millions who have lost jobs have been hit harder than retirees?
Andrew Biggs of the American Enterprise Institute notes that a "lost" COLA can mean a significant increase in the value of retirees' entitlements. Because falling prices increase the purchasing power of stable benefits, and because many Medicare premium increases are limited in years in which no COLA is paid, the typical retiree's purchasing power will be almost $725 higher next year.
More than 40 percent of the voters in 2008 were at least 50 years old. Perhaps Obama can do better than Mills did at purchasing the affections of the elderly. He needs to because they are especially unenthralled about his plans for their health care.
But about one thing, they should relax. A president who cannot resist dispensing a semi-COLA after the cost of living declines will not really fund a substantial portion of the new health care entitlement by cutting more than $400 billion from Medicare. And speaking of the unbelievable:
Maine Sen. Olympia Snowe is being beatified as the incarnation of bipartisanship because, of the 217 Republican senators and members of Congress, only she cast a vote for a Democratic health care addition to the nation's Ponzi entitlement structure. Yet in 2005 she opposed a Republican plan for shaving just $10 billion from government health care entitlements over 10 years. If, as seems probable, she would have opposed the health care bill she just voted for if Republicans had proposed it, does that devalue her version of bipartisanship?
Perhaps the 57 million $250 handouts should be seen as a down payment on a stealthy Stimulus III, which Democrats do not have the audacity to advocate candidly. In any case, Obama, whose inaugural address was a summons to "responsibility," does not even feign an intention to pay for them with offsetting economies. The money will be borrowed, much of it from abroad, much of that portion from China. Fortunately, foreigners have unlimited appetites for lending to America. Don't they?