Senate rejects Obama-backed proposal to send $250 checks to seniors

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The Senate rejected a proposal to send $250 checks to 55 million senior citizens who will not receive a cost-of-living increase this year in their Social Security benefits.

The chamber voted 50-47 against spending $14 billion for the one-time payments, which lawmakers said would translate into a 2% increase for the average retiree. President Obama endorsed the idea and the nonpartisan Congressional Budget Office listed it as one of the best ways to provide short-term stimulus to the economy. Lawmakers who opposed the idea called it a waste of tax money.

Seniors aren’t receiving the cost-of-living adjustment for the first time since 1975 because of a series of events that began with the 2008 increase in energy prices. That increase helped seniors because it led to a larger-than-usual 5.8% adjustment last year in Social Security benefits. Because inflation is now lower, no increase is due this year.

The plan would have been attached to a $150-billion measure to extend unemployment benefits through the rest of this year, provide $25 billion to state governments, extend miscellaneous tax cuts and prevent cuts in Medicare payments to doctors. Lawmakers said they aim to complete work next week on that bill, which would then go to the House for approval.

-- Bloomberg News