Controversy 8

1. Controversy 8 Should Age or Need Be the Basis for Entitlement?

2. Generational equity • Two different meanings of generation: • 1) an age specific group, such as “the elderly” or “children under age 18” • Or, 2) a historical cohort consisting of a group of people born in the same year or in a certain period (e.g., those who experienced the Great Depression or World War II) • Four issues underlie generational equity: • Questions about the allocation of resources between older adults and children • Concerns about large government deficits • Controversies over rationing health care resources • Questions about the fairness of how Social Security is financed

3. Poverty Among the Old • Over the past 30 years, there has been a large reduction in poverty rates among the elderly • Although the most gains in income for people were in the 1960’s and 1970’s • Supplemental Security Income (SSI) – a cash benefit program for the elderly poor, blind, and disabled • SSI is a means-tested program – it is only available if your income and assets fall below a designated range

4. Poverty Among Children and Young People • International comparison shows that U.S. poverty rates among children are higher than every other industrial nation in the world • This high poverty rate may be caused by family structure, unemployment, and/or declining wages • Some people also blame the declining well-being of children on the voting power of older adults • Families with children today form a smaller part of the electorate than in the past

5. Taxation and Power • The U.S.’s tax system has far-reaching impacts on different age groups and cohorts • Many “tax breaks,” or “tax expenditures,” go disproportionately to older people with higher incomes • The elderly poor get only 2% of the benefits from tax breaks • Generational accounting – analyzes how government tax and spending policies affect different cohorts • Adds up all the taxes paid to federal, state, and local governments over a lifetime, then subtracts benefits received such as Social Security, Medicare, and schooling • Must distinguish between the notion of conflict between generations and competition for different public programs

6. The Least-Advantaged Older Adults • How do we define “least-advantaged” among older adults? Possible answers include: • The entire older population • People above a certain age • Elders in minority ethnic groups • Older women • Rural or inner-city elderly • The physically or mentally frail • Older people who are vulnerable to abuse or neglect

7. The Least-Advantaged Older Adults (cont.) • Today there are many people in their 60’s and 70’s who are healthy and active • The so-called “well-derly” cause some people to argue that disability and frailty, not chronological age, should be the basis of access to services • Socioeconomic Status (SES) – a term used by sociologists to describe what is often known as “social class” • Cumulative disadvantage – lower SES over the life course tends to produce cumulativedisadvantage, which is perpetuated in old age

8. The Targeting Debate • Cost-sharing – an approach that combines elements of both means testing and taxation • The Older Americans Act (OAA) directs the aging-service network to target its services to: • “Individuals with the greatest economic or social needs, with particular attention to low-income minority individuals” • But there is still debate over how universal programs such as the OAA and Social Security can properly give preference to some needy groups