Seniors Face Double Hit: Hardships Plus Budget Cuts

04/27/2011 11:24 am ET | Updated Jun 27, 2011
  • Paul Kleyman Director of the Ethnic Elders Newsbeat at New America Media

SAN FRANCISCO, Calif. -- While advocates for elders are decrying political proposals that would cut budgets "on the backs of seniors and the poor," said Howard Bedlin, of the National Council on Aging (NCOA), "that's already happening."

Bedlin, NCOA's policy and advocacy chief, said in an interview that much of the national media's attention to "drastic" proposals to reduce the federal deficit by House Republicans and the White House fails to reflect deep cuts for seniors already made in the 2011 budget.

The 2011 compromise budget, he said, includes stark reductions for seniors in such safety-net programs as low-income housing, home-energy assistance for those in extreme weather, and job training and placement.

Bedlin and others experts on aging are dissecting how the national budget crunch will impact older Americans at this week's Aging in America conference in San Francisco.

One-in-Three Seniors Economically Insecure

"One out of three seniors in the United States is economically insecure," Bedlin stated, living under twice the federal poverty line, or $22,000 per person. He added, "Yet the public perception is that seniors are doing fine and not struggling."

In addition, according to the Social Security Administration, ethnic seniors are especially vulnerable. About half of black, Asian and Latino elders in the United States rely on Social Security for at least 90 percent of their income, compared to one-third of whites.

"We want to underscore the disproportionate effects of these budget cuts," said Sandra Nathan, who heads NCOA's Economic Security Initiative. For example, she said, 46 percent of participants in the Senior Community Service Employment Program (SCSEP) are in ethnic communities, and 60 percent are women." The program trains older workers and places them in community jobs.

NCOA's new One Away campaign for elder economic security just released a national survey, conducted for the organization by Harris Interactive, which revealed widespread misperceptions about the financial vulnerability of seniors.

Among the survey's findings are:

• Less than one-third of Americans knew that low-income elders now pay 25 percent of their incomes for healthcare out of pocket, despite having Medicare.

• Only one in six people understood that 40 percent of seniors recently faced such housing problems as being unable to pay their mortgages or living in dilapidated housing.

• Merely one in five knew that nearly 6 million older Americans are at risk of going hungry.

• Fewer than one-fifth of those surveyed knew that average credit-card debt for seniors was $10,000.

Nathan stressed, "The unemployment rate for older workers is 25-30%, the rate of foreclosures is very high, and their credit card debt is the highest of any group." Among ethnic groups, she said, "African America and Latino elders, she said, use credit cards for rent, food - just to cover their basic needs."

Strikingly, even though so few were aware that so many older adults are struggling, almost two in three Americans surveyed said that personally knew a senior, who is struggling economically--and the figure was even higher (70 percent) among young people ages 18-34.

Jobs-Program Cuts "Foolish"

For this fiscal year, Congress and President Obama agreed to slash 45 percent of funding for SCSEP, eliminating 59,000 training and employment positions for older workers. Bedlin called the budget cut "penny wise and pound foolish."

A new analysis of SCSEP by Northeastern University's Center for Labor Market Studies shows that even without the cuts the program only helps one in nine of the 1.1 million impoverished Americans 55 or older, who are eligible for the program.

In the study, the center's Ishwar Khatiwada and colleagues called the program's already low funding a "massive underutilization of the nation's low-income work force."

Underfunding SCSEP, they wrote, creates a "lose, lose, lose" situation with lost earnings, reduced physical and mental health, lost output for society, reduced taxes and an increased burden on strained public programs from Medicaid to food stamps.

Anthony Sarmiento, head of Senior Service America (SSA), which commissioned the study and, like NCOA, runs some of the SCSEP jobs programs, noted that all of the local programs report having long waiting lists.

"If politicians really believe it's all about jobs, why are they cutting SCSEP," Sarmiento stated.

"I want to be able to take care of myself," said Iola Lowe, 59, a SCSEP success story from Sioux City, Iowa. Through SSA's program at the Community Action Agency of Siouxland, Lowe learned computer skills and got on-the-job experience at the community's nature center.

After training older workers, SCSEP pays them a stipend to gain on-the-job experience at nonprofits or community agencies, such libraries --local agencies that need the help more than ever.

Lowe, who previously had a heart attack, said, "my health and mental state are a lot better. Now, I feel there's nothing I can't do." She currently has an unsubsidized position at Wal-Mart.

Another of the many recent successes documented by SSA is Willie Ford, 63, of Chattanooga, Tenn., a former factory worker, who learned computers so well through SCSEP's Digital Inclusion Initiative that the Alexian Brothers Senior Neighbors program asked her to serve as a computer coach. ("They love Facebook," she said.)

NCOA's Bedlin derided the current and proposed budget reductions as "incoherent." For SCSEP's employment program alone he noted, "The return on investment to communities is enormous. For every dollar spent on the program, $10-20 comes back to the community."

Safety Net Could Be "Torn Apart"

More broadly, said Bedlin, "We're trying to address the fact that we now have a frayed social safety net that might be torn apart." He said that proposals by House Republicans to cut both Medicare and the federal-state Medicaid program, as well as state cuts in Medicaid by governors of both parties are disturbing.

At the federal level, beside the senior employment reductions, the 2011 budget agreement President Obama recently signed for next year will do such things as axe $425 million of Section 202 housing subsidized for seniors (half of current funding); slash $390 million from the Low-Income Home Energy Assistance Program, including elimination of remaining funds to help protect seniors from extreme price hikes or weather; and delete funding for housing counseling, including how not to get cheated on reverse mortgage deals.

The president's budget proposal for 2012 is not much better, said Bedlin, as a bargaining point with Republicans over their far deeper cuts in social programs.

"If there's a compromise somewhere between the House bill and the White House, we'll be in pretty deep trouble."