January 24, 2008

Stimulus Plan Should Prioritize Seniors, Whitehouse Says

Older Americans, Hard-Hit by Faltering Economy, Need Targeted Aid

Washington, D.C. – As Senate leaders negotiate legislation aimed at bolstering the country’s weakening economy, U.S. Senator Sheldon Whitehouse (D-R.I.) today urged them not to overlook older Americans, who are especially hard hit by the rising cost of living. Whitehouse is a member of the Senate committees on Aging and the Budget.

“Troubles in the housing market, high home energy prices in a bitterly cold winter, and the rising cost of badly-needed prescription drugs force seniors in my state, and across America, to stretch already severely limited incomes even farther,” Whitehouse wrote Senate Majority Leader Harry Reid (D-Nev.) and Minority Leader Mitch McConnell (R-Ky.). “I encourage you to include in the stimulus package an alternative mechanism to channel funds to senior citizens.”

Rising costs have already made making ends meet difficult for many Americans. This year, an estimated 17.8 million Americans are in families that will spend more than 25 percent of their pre-tax income on health care costs. The price of gasoline in Rhode Island is hovering around $3 a gallon, and as of December, a gallon of home heating oil cost an average of $3.29 in New England.

With many Americans already grappling with sharp increases in day-to-day costs, rising foreclosure rates and turmoil in the mortgage securities markets have worsened the threat of a recession that could severely impact quality of life for low- and middle-income families. According to the U.S. Department of Housing and Urban Development, in 2005 a record 37.3 million American households spent more than 30 percent of their income on housing-related expenses, including rent or mortgage payments, utilities, property insurance, and property taxes. The Center for Responsible Lending has projected that an alarming one out of five subprime mortgages made during 1998-2006 will fail, which could result in 2.4 million foreclosures.

Democrats in Congress are working to assemble an economic stimulus package that will provide fast relief to Americans in need. In his letter to Senators Reid and McConnell, Whitehouse suggested that “[b]ecause the primary sources of income for most senior citizens are Social Security benefits and savings … One possible mechanism for covering the elderly would be a temporary increase in Social Security benefits.” More than 190,000 Rhode Islanders received Social Security benefits in 2005, the last year for which data is available. Social Security beneficiaries represented 92.4 percent of Rhode Islanders aged 65 and older.


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