January 31, 2008

Whitehouse Applauds Focus on Seniors in Proposed Stimulus Measure

Washington, D.C. – In a speech on the Senate floor, U.S. Senator Sheldon Whitehouse (D-R.I.) applauded the inclusion of aid targeted to seniors in an economic stimulus package now being considered by the Senate.

Many seniors who rely on savings and Social Security benefits would not be eligible for assistance under a plan negotiated by President Bush and the House of Representatives. Concerned that thousands of Rhode Island seniors could be excluded from this proposal, Whitehouse wrote Senate leaders in January urging them to prioritize aid to older Americans.

Below are Whitehouse’s remarks as prepared for delivery.

I rise today to speak about the economic stimulus package now under consideration by the Senate, and specifically to address the crucial issue of how this package affects our senior citizens.

Not long ago, at one of my community dinners, a young man named Travis told me a story about his grandmother. She was in her nineties and taking several prescription medications, but was otherwise well enough to live on her own.

She had a walk-up apartment in Woonsocket, Rhode Island, and every day she went up and down her stairs as she went in and out to take care of errands, or to see her grandson.

But one day, she walked down those stairs and went to her pharmacy to pick up her prescriptions as usual – only to find that this was not a usual day. I’m sorry, she was told. You’ve fallen into the doughnut hole in the Medicare Part D program.

So she went back home and walked back up those stairs, and called Travis. Without any help from her Part D insurance, she couldn’t afford to pay both for her rent and for the medicines she needed. She was frightened, she told her grandson, that after years of living on her own, she might have to stop making payments on her apartment in order to afford her prescriptions. She might have to give up her independence.

No one in this country – no one – should have to choose between her health and her home. But too many older Americans are making hard decisions like these every day – stretching fixed incomes to cover mortgage payments, heating bills, costly medications, even food.

As I’ve traveled all over Rhode Island, I’ve heard many stories like Travis’s. America’s seniors need to know that we are listening to them, that we have heard them, and that we will do all we can to help them make ends meet.

As our nation confronts uncertain economic times, this Congress is working diligently to provide help to those who need it most. When the initial agreement between the Administration and the House of Representatives on an economic stimulus proposal was announced, however, I was concerned that many seniors – one of the groups that most needs our aid – would be excluded.

Most seniors, who rely on Social Security benefits and savings and thus do not pay income taxes, would not be eligible for a tax rebate based on taxable income and delivered through the IRS. Indeed, 61 percent of seniors who receive Social Security benefits did not pay income taxes in 2006, the last year for which we have data.

Today, more than 138,000 Rhode Islanders over the age of 65 receive Social Security benefits, with benefits averaging just $12,374 per year. Based on the national percentage of recipients who pay income tax, more than 84,000 Rhode Island seniors would receive nothing under the plan negotiated by President Bush and the House of Representatives. Nationwide, that number climbs to 21.1 million – thus, more than 20 million seniors would not receive a dime in tax rebates under the House bill.

That’s not fair. Extending a rebate plan to seniors will give much-needed breathing room to millions of older Americans struggling to get by.

It also makes good economic sense. According to the Department of Labor, Americans over 65 are responsible for 14 percent of all consumer spending – and they spend an average of 92 percent of their income each year. In 2006 alone, seniors purchased more than $800 billion in consumer goods.

That data suggests that any rebate we’re able to provide for seniors will provide just the kind of economic stimulus our country needs. Older Americans are more likely to spend the money they receive and to spend it on the goods and services that will help our economy grow. In a Budget Committee hearing, I asked Peter Orszag, the Director of the Congressional Budget Office (CBO), which would be a faster stimulus to the economy: Social Security or tax rebates. He testified: “Social Security.”

Last week, I wrote the Democratic and Republican leaders in the Senate urging them to make seniors a priority in any stimulus package we consider.

I am encouraged that the Senate Finance Committee, chaired by my distinguished colleague from Montana, Max Baucus, has reported a bill that would allow most seniors to receive a $500 rebate. Under the Finance Committee proposal, Social Security benefits would be considered as income for this limited purpose, and seniors with at least $3,000 in Social Security benefits for 2007 could claim the $500 per person rebate simply by filing a tax return.

Because many seniors do not have enough taxable income to require them to file a tax return, they haven’t filed in years and are not used to the process. Should this proposal become law, we must do all we can to inform seniors about the rebates to which they are entitled, and to help them claim these much-needed rebates. For example, accountants, social services workers, and lawyers could volunteer their services to help seniors fill out and file tax returns.

Many seniors could desperately use an extra $500 – to help pay for prescription drugs, rising fuel costs, and housing – and we must ensure that no senior misses out on this money because of misinformation or difficulty in navigating tax forms.

This solution is a strong step forward. I applaud the work of Chairman Baucus and Ranking Member Chuck Grassley of the Finance Committee, and look forward to continuing our efforts to pass an economic stimulus proposal that meets the pressing needs of America’s seniors while accelerating the stimulus the economy needs.


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