Elder poverty is back

As more older Americans do without, Washington should bolster Social Security, not cut it back

5/25/2013

When President Franklin Roosevelt launched Social Security, he said it would ensure that an elderly American need not “spend his aged years in the poor house.” For four to five decades, the United States consistently expanded the social insurance program to secure this guarantee.

And for seven decades, Social Security was protected, indeed politically untouchable, because it worked. At least, that is what most people thought. The consensus was that Social Security had essentially ended elder poverty.

But a discouraging new study by the Kaiser Family Foundation shows that poverty among elderly Americans is rising. A new Census Bureau tool, the supplemental poverty measure, looks at more than income. It takes into account other forms of federal social welfare, such as food stamps, the earned income tax credit, and Temporary Assistance for Needy Families.

It also takes into account other major costs — primarily health expenses — that are especially high for older Americans.The Kaiser study found that in most states, 9 to 15 percent of America’s elderly are poor under the new measure.

In states where the overall cost of living is expensive, such as California and Connecticut, the elder poverty rate is even higher (20 and 16 percent, respectively). In Texas, which has fewer supplemental programs, the rate is 17 percent.

Ohio’s elder poverty rate is 11 percent, the Kaiser report calculates. This conclusion is confirmed anecdotally by stories of elderly Ohioans running out of food halfway through the month and skipping doctor visits or cutting pills in half.

The Columbus Dispatch reports that a record number of elderly people are availing themselves of such programs as Meals on Wheels and local food banks. Many of these people were not poor during their working lives, but are ending their lives in poverty.

Congress is considering cutbacks in Social Security, such as raising the eligibility age for the program. We should be increasing our investment in Social Security, not decreasing it. The proposed cuts also have troubling implications for Medicare and Obamacare.

Private retirement systems that helped sustain many retired Americans through most of the last half of the past century have largely vanished. Millions of dollars in private savings were wiped out in the crash of 2008 and subsequent recession.

As anyone knows who has tried to make ends meet on Social Security benefits, or has watched a friend or loved one try, it is not possible to live much of a life that way. Living on Social Security alone will send you to the soup kitchen or force you to skimp on medications, even if you worked 40 hours every week for 40 years.

We cannot go back to pre-New Deal standards for old-age security. We cannot have Americans who worked hard all their lives suffering from malnutrition in their “golden years.”

We know from Social Security that transfer payments reduce or eliminate poverty. Redistribute income down instead of up, and you will have fewer poor people. Give working-poor Americans, not programs or advice, but money.

Researchers for the New America Foundation proposed a $11,699 flat annual benefit for retired workers, beyond existing Social Security benefits. The nation, and the Social Security system, could afford this by means-testing Social Security to make it truly progressive.

The widow living on Social Security benefits alone would get a supplemental income. Billionaires Warren Buffett and Bill Gates would get zip. Franklin Roosevelt would approve.