As mentioned over here. I'm in full agreement; free fares for seniors are an awful idea. If implemented, it'll be ripe for abuse. People will steal cards, you'll never know exactly who's allowed to use one by looking at somebody, etc.
I'm not against reduced fares, but I do think it's a distraction, a ploy by Blago to try to require it as a condition of proper CTA funding. (Note that I don't think of this as a "bailout" -- that would imply the CTA screwed up. They didn't. It's Blago and the legislature who are falling down on the job, here.)