The New Normal: Seniors Without Political Clout

I used to think that seniors had political clout. Do you remember years ago when irate seniors chased House Ways and Means Chairman Dan Rostenkowski down the street waving their canes protesting the change in Medicare that extended the program's coverage? Congress subsequently repealed the law, bowing to the political hammer of seniors.

That was then.

Things are very different now. Seniors have lost their political clout. Here’s some examples.

In Obamacare, around $700 million will be transferred out of Medicare to support health care coverage for those under 65. This happened without a peep from seniors; in fact their biggest lobbyist, AARP, supported the transfer wholeheartedly, abandoning the majority of their constituency. (I quit AARP in protest and have never returned.)

Seniors have been eviscerated by the 2008 financial crisis and its aftermath. Only a short time ago, seniors could get a return of 5% on their bank Certificates of Deposit. In many cases, this was a big part of their disposable income. Today, thanks to the Federal Reserve, the average yield on a 1 year CD is less than 1%. Many seniors have been forced to drastically reduce their quality of life because of this manufactured low interest rate environment.

For the last 3 years, Social Security recipients received only one cost of living adjustment: 3.6% this year. For the prior 2 years, the COLA was zero. The formula for adjusting these benefits concluded that there was no inflation for two years, but did the real estate taxes that seniors pay go down? Not likely. In my case, my real estate taxes went up at an average rate of 4.5% a year. Also, in Illinois where I live, our income tax went up 67% last year, another example of seniors with zero clout.

At the same time, as the financial meltdown occurred, whatever savings many seniors had for retirement were dramatically reduced. If they were savvy enough and had the fortitude to ride out the near 40% collapse in the stock market in 2009, then they’re close to even today as the market has rebounded. But many seniors panicked and sold at the market lows and now they have to return to the workforce (if they can find a job) to earn enough money to live on. Many seniors are saying goodbye to retirement.

I don’t think it’s the seniors’ fault that many of them are in desperate financial condition; they were certainly dealt disastrous hands by both the recent fiscal crisis and the Obama administration’s response to it, but in my view the fairy tale that seniors wield inordinate political power has come to an abrupt end. 

                                                This particular senior, in retirement.