First, the American Pediatrics Association noted that poverty was the number one danger facing children today. If that wasn’t bad enough, it seems the elderly are just as vulnerable, especially in the light of potential entitlement cuts. A recent report from the Economic Policy Institute finds that 48 percent of the elderly population earns less than double the supplemental poverty threshold, which means that 48% of Americans over 65 are at risk if their benefits are cut even a little. And potential across the board cuts to Social Security would impact seniors a lot.
In fact, according to the report, predicted increases in seniors’ out-of-pocket health costs already are going to raise the share of economically vulnerable elderly (those below two times the supplemental poverty threshold) by 8.4 percentage points, pushing the share up to 56.4 percent.
Though, as the Washington Post points out, “there is no fixed Supplemental Poverty Line for the entire nation, as the measure shifts depending on the cost of living in various parts of the country,” approximately 9% of the United States’ elderly population lives in poverty. The SPL ranges from about $8,313 to $15,079, with an average of $10,652.
Also according to EPI's report, woman and elderly people over the age of 80 have it the worst. Women are 10.7 percentage points more likely to fall below two times the supplemental poverty threshold than men (52.6 versus 41.9 percent). Those over 80 have a higher rate of economic vulnerability than 65-79 year olds (58.1% versus 44.4%). Minorities over 65 are also more likely to be poor. As the report notes, 63.5 percent of blacks and 70.1 percent of Hispanics, age 65 and older, have incomes less than two times the supplemental poverty threshold -- while 43.8 percent of whites are economically vulnerable.
If the impacts are so grave, why make these cuts in the first place? Those who favor the change cite rising deficits and the fact that the program takes $2 out of every $5 federal dollars spent. As the trustees of Social Security recently reported, the retirement system can pay full benefits until 2035, when it will be able to pay about three-fourths of promised benefits. President Obama is considering a compromise with Ryan’s plan, cutting Social Security costs by lowering the program’s annual cost-of-living adjustment by tying it to a slower-growing inflation measure.
Everyone's on edge about the deficit, and of course those of us under 65 now want the same kind of Social Security benefits as our parents. But are these cuts really the only option? A recent New York Times editorial, suggests that this might not actually be a crisis, but instead a manageable problem, requiring smaller, targeted actions like lower payouts for upper-income recipients who live longer and draw larger benefits
It’s not that the programs don’t need changes, but, as theTimes editorial noted, "reform should balance cuts with tax increases, including raising the level of wages subject to payroll tax." It should also create newer, better jobs and be linked to immigration reform "bolstering the income and number of workers paying into the system."