The Denver Botanic Gardens is only the latest organization to bless me for the unremarkable accomplishment of growing old. Ten bucks off for seniors on the annual membership fee? Check. I’ll take it.
Just as I took the curiously generous $10 lifetime pass to our national parks for seniors (that was finally hiked last year to the still bargain price of $80). Just as I accept movie discounts, a free athletic club membership and other assorted deals given to seniors when they are thrust in my face.
Just as I’ll embrace the property tax reduction available in Colorado to those 65 or older who’ve lived in the same dwelling for 10 or more years.
Itap not my fault if the nation seems to labor under the delusion that most old-timers are scraping by on handouts and coupons. A minority of us are, to be sure, but thatap true of other age groups, too. And yet poverty among seniors is no worse, and arguably lower, than for the rest of the population. It depends on which estimates you prefer.
For those over 65 in 2016, according to the Census Bureau, the poverty rate was 9.3 percent. But it was 18 percent for children under age 18 — double the rate for the elderly, in other words — and 11.6 percent for adults aged 18 to 64. And those estimates do not include the homeless or those in prison, who generally are not old.
Of course, hardly a month passes without another article appearing somewhere on the alleged retirement savings crisis and the fact that, as last year, millions of Americans “are entering their golden years with alarmingly fragile finances.” Yet that could be true for millions of Americans without undermining the basic profile of U.S. poverty as established by the Census Bureau.
To be sure, income and poverty estimates are subject to debate, with some estimates running higher than others. Even the Census Bureau publishes an alternative called the Supplemental Poverty Measure (SPM) that some economists prefer because it includes several financial resources and expenditures overlooked by the traditional estimate, such as food stamps and out-of-pocket medical spending. For 2016, the SPM for the elderly was 14.5 percent, slightly higher than for other adults (13.3 percent) but lower than for children under 18 (15.2 percent).
But wait: a few estimates of senior poverty suggest that the traditional measure is an overestimate. Last year, for example, two Census Bureau researchers published a paper titled “” to which they answered yes, citing underreporting of retirement income to the bureau’s annual survey.
Whatever the best estimate, the perception of seniors as collectively existing on the brink of ruin carries an unfortunate side effect: It hobbles every attempt, however minor, to reform the massive federal entitlement programs — Medicare and Social Security — that rely in part on transfers of wealth from working-age Americans to seniors and which are major contributors to our swelling long-term national debt.
I paid a lot of payroll taxes into those programs over a long career — and so did my employers — but I am still likely to receive more in benefits than the present value of what I paid in so long as I don’t die before the actuarial tables say I should. C. Eugene Steuerle and Caleb Quakenbush of the Urban Institute — a moderately liberal think tank — have calculated that a married couple who turned 65 in 2015 and earned the average national wage will have paid in $683,000 in Social Security and Medicare taxes and can expect to receive about $1 million in benefits (in both cases adjusted for inflation and a discount rate of 2 percent). And that disparity between benefits and taxes will steadily widen in the future because of real boosts in benefits already baked into the system.
The federal subsidy does narrow as incomes subject to FICA taxes rise, meaning wealthier workers get the smallest subsidies, as they should. Indeed, Steuerle and Quakenbush estimate that single men and women earning the maximum amount subject to payroll taxes pay their way in terms of benefits they’ll receive. But they’re the exceptions. Most workers will be subsidized, with the difference especially large among married couples with one breadwinner or one high earner and one average one.
Meanwhile, there is almost no political appetite in either party to reform entitlement programs to slow their growth. In fact, Democrats in the past few years have been moving to a near consensus that benefits for Social Security should actually be boosted across the board. Now, boosting benefits for those in poverty could make sense if coupled with a slowdown of growth in benefits for other groups as well as a modest hike in the earnings cap. That in fact is what President Barack Obama’s Bowles-Simpson fiscal commission suggested early in this decade. It was an attractive compromise among commission members, but inconceivable in the present political environment. And come to think of it, the idea never got traction in Congress back then, either.
Last year, my share of cataract surgery on both eyes — surgery that left me with better eyesight than I’ve had since I was a kid — was all of $50, plus minor expenditures on eye drops. My Medicare premium is $134 every month, a steal compared to what my non-retired friends pay for coverage. Meanwhile, , net Medicare spending — that is, “mandatory Medicare spending minus income from premiums and other offsetting receipts” — “is projected to increase from $590 billion in 2017 to $1.2 trillion in 2027.”
I realize plenty of seniors are in need, and their frailty can leave them more helpless than younger adults in financial straits. Every week I help make meals for some of these vulnerable folk who live in south metro Denver. But entitlement spending needn’t be sacrosanct. We can protect benefits for the elderly poor while still addressing the future financial health of a nation slipping ever further into debt. And the first step in that process might be to acknowledge that most oldsters are doing just fine.
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