Public Policy & Aging E-Newsletter
Volume 5, Number 1, January 2011
This bimonthly e-newsletter highlights key developments and viewpoints in the field of aging policy from a wide variety of sources, including articles and reports circulating in the media, academy, think tanks, private sector, government and nonprofit organizations.
The goal of this email publication is to reach teachers, students, and citizens interested in policy-relevant issues, especially those who may not have easy access to policy information disseminated both in Washington and around the country.
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We dedicate this issue of Public Policy & Aging E-Newsletter to the victims of the Tucson, Arizona shooting on January 8th, 2011. Congresswoman Giffords is a great friend to those in the aging community, and is known for taking extra time to listen to the thoughts and concerns of her older constituents. In 2010, she introduced the Older Americans’ Workforce Agenda to help seniors get the jobs they need and give them financial assistance if they choose to return to school. Congresswoman Giffords has also been a noted advocate for protecting the health and well being of older adults through strengthening Social Security and Medicare programs.
We send our thoughts to the family and friends of all the victims, and to Congresswoman Giffords for a full recovery.
The President and other civic leaders have rightly expressed outrage and sorrow over the latest wave of violence that grips our nation. We feel that it is incumbent on readers and subscribers of this E-newsletter, as advocates and (potential) consumers of policies that bind generations together, to tap the wisdom of age by promoting civil discourse and by respecting differences of opinion without resorting to acts that hurt others and belie our democratic values.
I. WHAT’S HAPPENING IN WASHINGTON?
A. Older Population in the United States: 2009: The U.S. Census Bureau released a series of data tables with information on a wide range of demographic and socioeconomic characteristics of adults age 55 and older. Topics include marital status, educational attainment, nativity and citizenship status, labor force and employment status, occupation, earnings, poverty, and housing tenure.
B. Medicare Trustees Reports 2010 and 2009: What a Difference a Year Makes: This National Center for Policy Analysis report explains how the new federal health care law — the Patient Protection and Affordable Care Act — uses savings in Medicare to fund additional federal health care spending on non-seniors. The report shows how different projections on Medicare spending compare to Social Security benefits and will impact the Medicare forecast in the future.
C. Social Security Reform: Raising the Retirement Ages Would Have Implications for Older Workers and SSA Disability Rolls: Increases in life expectancy are anticipated to lengthen the average number of years Americans spend in retirement and therefore impact the long-term revenue of Social Security. This Government Accountability Office (GAO) report answers questions about what the demographic characteristics of those near retirement age indicate concerning the potential for these individuals to continue working at older ages, and what policy options may help mitigate the effects of increased retirement ages on those who may not be able to work longer.
II. WHAT’S HAPPENING AROUND THE COUNTRY?
A. Net Effects of the Affordable Care Act on State Budgets: Commissioned by First Focus, an advocacy organization representing children and families, and authored by Urban Institute researchers, this report assesses how state budgets will fare as a result of the Affordable Care Act. The report’s findings shed new light on potential savings for state Medicaid budgets which, even in a worse-case scenario, would outweigh costs associated with the health reform law.
B. State Budget Update: November 2010: While the national recession officially ended in June 2009, states continue to face large budget gaps due to lower revenues, the end of Recovery Act funding, and structural budget deficiencies. According to a National Conference of State Legislatures report, 18 states reported spending overruns on Medicaid and other health care programs in 2010.
C. Rate Review: Spotlight on State Efforts to Make Health Insurance More Affordable: The Patient Protection and Affordable Care Act requires new federal oversight in determining “unreasonable increases” in the premiums charged for certain individual and small group health plans. This Kaiser Family Foundation study examines the existing laws and regulations in all 50 states, and finds dramatic variations across states, with some states having no authority at all and others with robust authority to review and approve or disapprove rates before they are implemented.
III. THIS ISSUE'S MAJOR POLICY STORY: Summaries and Reactions to the National Commission on Fiscal Responsibility and Reform’s Report
For all of their differences, the three recent blue-ribbon panels on "fiscal responsibility" make it clear that the size of the Federal deficit puts our current living standards in jeopardy and, perhaps more ominously, poses untold hardships for our children and grandchildren. The magnitude of the problem is staggering. Fortunately, unlike some opinions about the impact of global warming on the environment, few are willing to deny that something must be done to remedy the situation. The trouble is that options are unpalatable. One panel's set of bright ideas meets swift opposition from friends, foes, and special interests.
It is not clear, as I write, whether the executive branch and congressional leaders can or will choose among options on the table. Perhaps a bi-partisan group, such as the reform commission President Reagan and Speaker O'Neill selected, will reach a compromise similar to that which put Social Security on secure footing in 1983.
For the moment, though, it is worth thinking about two keywords--"entitlements" and "taxes"--because they are central to any resolution of the present crisis. We often think that entitlements, once enacted, are etched in stone. Yet when I got a letter from the Social Security Administration recently that told me the monthly check I might expect based on my FICA contributions, the language was provisional. And rightly so. Congress, under the last section of the 1935 Act, amend or repeals provisions at will. So my "entitlement" is really a procedural benefit, not a dollar amount: If I feel that I am being treated unfairly, I have the right to appeal by case through appropriate channels.
Similarly, as anyone who followed the debate over income taxes understands, thresholds and rates vary. Some taxes are Federal, but many are imposed by states, counties, and local jurisdictions. We do not have a VAT tax, which Europeans pay, but we may someday. And so it goes. There are many ways to tax citizens.
The issue of entitlements and taxes gets to the heart of legacy work. What sacrifices, if any, are Boomers and other Americans willing to make for the sake of those who have no voice in policy debates, no vision of the public square? And while no one wants to pay more taxes than required, are we as a body politic willing to assist the vulnerable, educate a work force, and ensure a minimal standard of living and health? These are among the questions that should be uppermost as you read this section.
--Andy Achenbaum
A. The Moment of Truth: Report of the National Commission on Fiscal Responsibility and Reform: The President’s bipartisan Commission released its full report of recommendations to put the nation back on a path to fiscal health, promote economic growth, and protect the most vulnerable. The plan aims to achieve nearly $4 trillion in deficit reduction through 2020 and reduce the deficit to 2.3 percent of GDP by 2015. Watch the six Commission meetings leading up to the report’s release on December 1, 2010.
B. Rivlin-Domenici Deficit Reduction Plan Is Superior to Bowles-Simpson in Most Areas, But Health Proposal Is Very Troubling: This Center on Budget and Policy Priorities report provides background on both deficit reduction plans, and lists five reasons why the Rivlin-Domenici plan better addressees the budget deficit than the Bowles-Simpson plan. The discussion explores how each proposal for Social Security solvency, spending cuts, revenue increases, and health care reform will benefit or harm today’s economy. For a summary of the Bowles-Simpson plan, click here.
C. Analysis of The Report of the National Commission on Fiscal Responsibility and Reform: In response to the National Commission’s proposed recommendations, the National Committee to Preserve Social Security and Medicare (NCPSSM) released an analysis of the proposed benefit cuts and changes to Social Security. The response outlines how alterations to the payroll tax holiday, cost-of-living adjustment increases, benefit formula index, and retirement age will impact future generations.
D. Fiscal Commission Report: Too Much Taxes, Not Enough Spending Cuts: This Heritage Foundation report responds to the Fiscal Commission by giving credit to the Commission for taking on the large structural deficits, but also criticizing the tax-heavy solution to the spending problem. The report also compares the Fiscal Commission’s plans with the current policy budget baseline, and suggests improvements to the proposal.
E. Comparison of Medicare Provisions in Deficit-Reduction Proposals: In response to the Commission’s proposals about Medicare, the Kaiser Family Foundation released a side-by-side comparison of six different plans proposed by Committee members. While the plans recommend reducing the growth in Medicare spending over time, they differ in approach and total impact on the deficit and debt-reduction.
IV. WORTH NOTING
A. For Millions of Older Women, Social Security Is a Lifeline: With grant support from The Retirement Research Foundation, this National Academy on an Aging Society research brief (available free to our readers for a limited time only) provides an overview of Social Security’s long-term impact on women’s financial security. The brief discusses the financing and adequacy of benefits, potential improvements for widow benefits, and the needs of caregivers.
B. Call for Proposals: Improving Lives of Vulnerable Americans Through Social Security: The National Academy of Social Insurance (NASI) invites applications for a series of awards to pursue education, outreach, and constituency building on Social Security in vulnerable communities. With support from the Ford Foundation, NASI is awarding funds to projects designed to educate Americans most reliant on Social Security about its role in their economic security. The purpose of the project is to support constituency building and the development of user-friendly, research-based information on the adequacy of Social Security benefits.
C. National Alzheimer's Project Act Becomes Law: The House of Representatives joined the Senate and passed the National Alzheimer's Project Act (S. 3036, H.R. 4689) on December 15, 2010, and the bill was signed into law by President Obama on January 4, 2011. The Act will create a national strategic Alzheimer's plan and establish an inter-agency council to work with the Secretary of Health and Human Services. For a historical perspective on the legislation, view this chronology of events from the Alzheimer’s Association.
V. WHAT'S HAPPENING ABROAD?
A. Aging Population Policy Framework: The government of Alberta, Canada released a report identifying eight strategic policy priorities to address the population aging. The policy directions include raising awareness about the cost of retirement, providing career services for mature workers, supporting affordable transportation when driving is no longer feasible, building "age friendly" communities, and assisting employers with a "multi-generational workforce."
B. Work: The New Face of Retirement: This Wharton School of the University of Pennsylvania report provides a global view of retirement systems and the approaching challenges due to falling birth rates and longer life spans. The report looks at several countries across five continents to examine the reasons why people are working longer than their parents did, the crisis of public and private pension plans, and recommendations for preparing financially and vocationally for life in the later decades.
C. Social Security Benefits Around the World, 1970 to 2000: Changes in social security systems affect economic growth as well as a host of decisions people make about saving and working. The Population Reference Bureau created a slideshow presentation of data on replacement rates in 40 countries, and the variation in the extent to which social security income benefits substitute for earnings.
VI. PERSPECTIVES ON POLICY: ROB HUDSON, EDITOR, PP&AR
The current debate surrounding the release of the National Committee’s report reminds me of a recent issue (Volume 19, Number 3) of Public Policy & Aging Report that explores both the sources of and possible solutions to “Enhancing Elderly Financial Security:”
In this discussion of financial security, Richard W. Johnson centers his attention on the deteriorating employment situation of older workers. The number of unemployed workers aged 55 or older doubled between November 2007 and July 2009. Christian E. Weller focuses his concern on how to counteract wealth loss among older Americans. His analysis and recommendations center on how to meld the best features of defined benefit and defined contribution savings plans. Annamaria Lusardi highlights the importance of the woeful level of financial literacy and numeracy among older adults. Her research finds such illiteracy at the root of the problem, in turn leading to both a lack of financial planning and, ultimately, to a lack of wealth. The analysis of David C. John calls attention to the widespread inability of retirees to manage their savings so that they last throughout retirement. Toward a remedy, he emphasizes the utility of annuities. Finally, Raymond O'Mara III and Pamela Perun introduce a life-course perspective to the savings issue, arguing that our goal should be broader than retirement savings alone. They propose a "Savings for Life" system in which four products-Child Accounts, Home Accounts, America's IRAs, and Security Plus Annuities-would represent a long-term investment in a better national savings system.
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Newsletter Editors: Dani Kaiserman, Sarah F. Wilson, and Greg O'Neill, National Academy on an Aging Society; Andy Achenbaum, University of Houston.
The Public Policy and Aging E-Newsletter is supported in part by a grant from the AARP Office of Academic Affairs. The views expressed are those of the authors and not necessarily those of The Gerontological Society of America, the National Academy on an Aging Society, or the AARP Office of Academic Affairs.
© Copyright 2011; all rights reserved.
