Does the Obama Administration truly really believe they can buy off American senior citizens to get their support for a government takeover of the American health care system by sending them $250 checks?

That is certainly the implication as Congress is preparing to spend about $14 billion to appease seniors, veterans, the disabled, and retired railroad workers who, for the first time since the 1975 introduction of automatic Social Security cost-of-living adjustments (“COLA”s) based on the Consumer Price Index will not receive a COLA in 2010.

Social Security recipients got an enormous 5.8% COLA increase last year, the biggest since 1982, because of the temporary spike in energy prices. Because COLAs are made effective with December payments, the calculation is done based on the average of third quarter (July, August, and September) data. In 2008, the third quarter CPI-W (Consumer Price Index for Urban Wage Earners) registered its highest quarterly value ever, causing the large COLA increase for the year. If the calculation had been done with fourth quarter data instead, there would have been no COLA in 2008 because of the rapid deflation in the last three months of last year.

The fact that Social Security payments aren’t dropping is the same as retirees getting a raise because the cost of living is dropping.  If the system were set up to truly capture cost of living changes, Social Security payments would drop for 2010, given that the CPI is down 2.1% for the third quarter of 2009 versus 2008.  (Colorado will probably become the first state to lower its minimum wage for that very reason.) However, the system is designed to “protect” recipients against drops in payments.

Simultaneous with the news that tens of millions of senior citizens won’t be getting their annual “raise”, the Obama Administration has clearly noticed, as Gallup reported a few weeks ago, that senior citizens are the age group most opposed to Obama’s health care “reform” plans. And it’s a maxim in politics that someone’s likelihood of voting is proportional to his age. Thus, politicians take the old folks’ views seriously.

Apparently trying to kill two birds with one stone, Obama wants to send $250 payments to about 57 million Social Security recipients, buying seniors’ votes with your children’s future earnings.

I can’t imagine that the average senior who believes that Obamacare will be a disaster for the American health care system can be bought off for $250, nor that the average senior wouldn’t react to the proposal as an insult to his or her intelligence and integrity.

The head of the AARP, the senior citizen-targeted lobbying arm of the Obama Administration, said “Without relief, millions of older Americans will be unable to afford skyrocketing health care and prescription drug costs, as well as other basic necessities."  Will one $250 payment take care of skyrocketing health care costs?  Will one $250 payment fool your grandmother into voting for health care “reform” which she knows will cost, as bank robbers once demanded, “your money or your life?”

The proposed $250 payment would be roughly equal to a 2% COLA…but would come from the general budget and add directly to the deficit. President Obama, demonstrating his lack of understanding that there is no Social Security Trust fund, said that he “is committed to ensuring that the $13 billion cost of the proposal does not reduce the solvency of Social Security….” Social Security is already a single-digit number of years away from insolvency. At that point, payments to beneficiaries will have to be partly paid from income tax revenue rather than payroll tax revenue. The idea that paying the nearly $14 billion for this political payoff out of general revenue now is somehow beneficial to our national financial health is like saying that it’s cheaper to owe someone money if you carry your wallet in your left pocket than in your right.

Not surprisingly, the measure (S.1685) is being pushed by socialist Bernie “Robin Hood” Sanders (I-VT), who said “For 2010, the least we can do is to provide seniors with a modest increase in their benefits…"  If “we” are the citizens, does “the least we can do” mean that we should add to future generations’ debt in order to increase seniors’ retirement payments when we’ve all lost much of our retirement savings AND when the cost of living is substantially lower than it was last year?

While it’s the Democrats pushing this particular plan, Republicans are failing to take the moral high ground, which also happens to be the most economically and politically rational position.  Rather than forcefully opposing this obvious bribe – which most senior citizens should find somewhere between silly and offensive – House Republican Leader John Boehner simply said he’d support it if it came from unspent “stimulus” funds. My suggestion for Rep. Boehner: Call this bribe what it is and trust that senior citizens are wiser than you give them credit for.

Some Republicans also seem to think they need to bribe the seasoned citizens, such as North Carolina’s Walter Jones, who has introduced a measure to provide an “emergency” cost of living increase…as if Social Security isn’t going bankrupt fast enough. Rep. Rodney Alexander (R-LA) has a similar proposal. If anything, the Republicans proposals are even worse than Sanders’ because they would add to the Social Security benefit for purposes of all future calculations. Even the left-leaning Center on Budget and Policy Priorities says “These proposals are costly. A 3 percent increase would cost $15 billion to $20 billion annually in Social Security benefits in 2010 and beyond.” You know a redistribution of wealth is a bad idea when even a liberal think-tank says “the case for a Social Security COLA in 2010 is weak.”

The moral hazard of Obama’s attempted health care payoff is enormous. Social Security COLAs have been a matter of formula rather than politics for more than 3 decades.  If this goes through, the opportunity for future shenanigans expands dramatically, and you can bet any future shenanigans will make $14 billion look like peanuts.

A pleasant surprise, editorials in several usually liberal newspapers, including the Washington Post and the Kansas City Star, are critical of the handout. Still, if I had to bet on it, I’d bet it passes. Politicians in both parties seem to think that senior citizens are gullible and greedy.  I think they’re not…which is not to say the checks will go uncashed.

In the meantime, the Democrats are courting one of the most massive electoral defeats in this nation’s history in 2010… which is why they’ll try something this transparent and desperate. Instead of going along with it, the GOP should pounce, aggressively arguing against this bribe and yelling from every rooftop “We trust American senior citizens not to sacrifice our nation’s health care system in return for a $250 check from their grandchildren.”