Money Matters for Both Senior Citizens and Their GrandkidsPoverty & Family Economics
Money matters. It is a very simple notion in a capitalist society. Although there are deniers of this fact when it comes to children, such as those who insist the vast inequities in school funding somehow do not matter, the facts overwhelmingly point to just how very important it is.
After highlighting the reams of research and court finding that demonstrate the importance that education funding plays in student achievement, Michael Rebell and Joseph Wardenski conclude:
We challenge our readers to find any parent, teacher, or school administrator in any poor community in the United States — or, for that matter, in any affluent community — who genuinely believes that money does not matter in education. As a state court judge in rural North Carolina bluntly put it, “Only a fool would find that money does not matter in education.”
Yet, in the last few years, funding for education has been cut at both the state and national levels.
And more broadly, if our nation’s budget reflects our national priorities, the fact is that we are clearly shortchanging our children across the board — not only in education but in a number of other areas. As the Urban Institute found in Kids’ Share 2013, “Federal spending on children fell by $28 billion, or 7 percent, in 2012, the largest single-year reduction since the early 1980s.”
As a result, the share of federal spending dedicated to children has dropped to below 10 percent, which according to the Urban Institute, stands in sharp contrast to the “41 percent spent on the elderly and disabled portions of Social Security, Medicare, and Medicaid; 20 percent on defense; 6 percent on interest payments on the debt; and 23 percent on all other government functions.”
Even worse, the Urban Institute projects that by 2023 the share of federal spending on children will drop to just 8 percent overall while other areas of the federal budget, such as the non-child portions of Social Security, Medicare, and Medicaid will increase to from 41 to 46 percent and interest on the debt will increase to 6 to 14 percent. According to the report:
With the exception of children’s health, all areas of spending on children are projected to decline. The sharpest drops are in discretionary programs, which must compete annually for appropriations.
The major takeaway is that federal spending on children will be squeezed and continue to decline unless the President and Congress take affirmative steps to change that trajectory for children. Rather than addressing this reality, some dismiss or discount the problems facing children and tacitly embrace the status quo, which is a glide path to increasing inequities and problems for children.
As an example, although Los Angeles Times columnist Michael Hiltzik is one of America’s best journalists, it was disappointing that he took up a few of these arguments in a recent syndicated column titled “What Bill Maher Got Wrong About Spending on Young vs. Old. Everything.” In the article, Hiltzik ignores the problems facing children, and instead, argues that the inequities in funding that Maher cites in a recent HBO broadcast are overstated. He writes, “Add up everything, and spending by governments at all levels in 2008 came to about $1 trillion on seniors and $936 billion on children. In other words, virtually one to one.”
So, is it almost equitable, as he implies? Actually, not even close. As he acknowledged in a previous paragraph, there are twice as many children under the age of 18 than seniors over the age of 65. Therefore, according to the Urban Institute, the fact is that:
Total per capita public spending on the elderly was 2.2 times the amount spent per child in 2008. Looking solely at the federal budget, an elderly person received close to seven dollars for every dollar received by a child.
Hiltzik also argues that additional federal spending on the elderly is justified because health care for senior citizens is far more expensive than that for children. As he writes:
In general, seniors require more medical care than kids, so inevitably their healthcare will cost more, even though the federal government does in fact fund a very comprehensive healthcare program for children – CHIP, the Children’s Health Insurance Program.
While his argument that health care is more expensive for senior citizens is true, the comparison he makes between Medicare and CHIP is illuminating and actually makes the opposite point. On the one hand, Medicare is an entitlement program that ensures virtually every senior citizen in this country with comprehensive health coverage. In 2003, when the Medicare prescription drug bill was passed and was projected to add close to $1 trillion in federal spending to the program over the decade, the vast majority of that spending was not required to be offset by Congress or President George W. Bush.
In sharp contrast, although CHIP has been an enormous success story that has, in conjunction with Medicaid, cut the uninsured rate for children in half, it is not an entitlement, 7 million children remain uninsured because it is not universal, and CHIP was required to be fully offset during its inception in 1997 and reauthorization in 2009.
Moreover, while Medicare is considered an untouchable third rail of politics and President George W. Bush signed into law an enormous expansion of that entitlement during his Administration, he vetoed CHIP on two occasions just a few years later by arguing that, even though the $35 billion cost of the legislation was fully offset and was just a very small fraction of what had just been spent on the Medicare prescription drug benefit, the CHIP reauthorization was too expansive.
And, although CHIP was finally reauthorized in 2009 under President Barack Obama, the future of children’s health coverage remains extremely precarious. In fact, just a few weeks ago (Jan. 31st), the State of Arizona allowed CHIP to completely expire and thousands of Arizona’s children lost their coverage as a result. To make matters worse, CHIP faces a pending 70 percent cut in federal funding in 2015 unless Congress and the President take action to fully fund and protect the health of an estimated 8 million children whose health would be put at risk.
The fact is that health coverage for senior citizens and children are not comparable at all. Our society would ever allow the health care for millions of senior citizens to be at the same risk as the health coverage of children.
As if to underscore that very point, U.S. Senators Mike Lee, Ted Cruz, David Vitter, and Jim Inhofe recently introduced a bill, S. 2015, with the intent of cutting federal spending. Although the legislation specifically exempts Medicare, it would unfortunately subject CHIP and numerous other children’s programs to billions of dollars in budget cuts.
This is also true with respect to poverty. As Ron Haskins of the Brookings Institution writes:
The Census Bureau’s annual poverty data show just how effective Social Security has been in fighting poverty. In 1966, a year after [President Lyndon] Johnson expanded Social Security and enacted Medicare and Medicaid, elderly poverty was 28.5 percent. By 2012, it had fallen to 9.1 percent, a decline of about 68 percent.
In sharp contrast, last year the Census Bureau estimated that 21.8 percent, or 16.1 million, of our nation’s children live in poverty. Sadly, today’s child poverty rate is almost as high as it was in 1963 and is a stunning 70 percent higher than that for all other American citizens over the age of 18.
While Social Security lifts millions of senior citizens out of poverty and is has automatic benefit increases or cost-of-living adjustments built into it, programs important to kids such as Temporary Assistance to Needy Families (TANF) and the Child Tax Credit (CTC) are not adjusted for inflation, and therefore, decline in value every single year.
For example, the Center on Budget and Policy Priorities (CBPP) estimates that the value of TANF has declined dramatically since it was converted from an entitlement for families with children in poverty to a capped block grant in 1996. As they write:
Because the $16.6 billion annual federal TANF block grant has not been adjusted for inflation, it has lost significant value over time. States receive 30 percent less in real (inflation-adjusted) dollars than they did in 1997, a year when the unemployment rate averaged just 4.9 percent.
As for the CTC, in addition to it not being adjusted for inflation, the credit’s earning threshold –that is, the minimum income level required before any benefits are allowed — returns to $10,000 from $3,000 in 2017 unless Congress and the President take action to protect it.
So no, in numerous ways, senior citizens and children are simply not treated equitably when it comes to federal funding or policy.
In response, advocates sometimes needlessly freak out when presented with such facts. They worry that somehow the nation will suddenly slash funding to senior citizens if they know the truth. But, they would be missing the point.
Rather than running away from the facts, rather than distorting the data, rather than dismissing or whitewashing the problems facing children, and rather than claiming that “money doesn’t matter” when it does, it is clear from my 12 years working in the Senate on Medicare and Social Security policy that Ron Haskins is right when he points out that “everyone should agree [as] to the positive impacts of the War on Poverty on the health, life expectancy, and poverty rates of the elderly.”
The point is: Social Security and Medicare work. Embrace it. Celebrate it. These programs are the definition of success. In fact, for those of us who have worked on policy issues for senior citizens over these many years, we can and should be proud that these programs have been successful and that much has been accomplished to improve the lives of senior citizens over time.
And in that vein, our nation’s children now need your help in ensuring that same level of success for children in coming years. In fact, senior citizens believe it is time to make children a greater federal budget priority. A recent American Viewpoint poll shows that, by a more than 6-to-1 margin (58-9 percent), senior citizens believe the lives of children have become worse rather than better over the last decade. And, by a 44-25 margin, senior citizens believe the federal government should now focus a greater priority on the needs children than on the elderly.
As such, we have some urgent problems our nation must address for kids, including:
- Child Poverty: We simply cannot afford to accept the fact that more than 1 in 5 of our nation’s children are living in poverty. Like the British, we should adopt a Child Poverty Target that commits the nation to cutting child poverty in half over the next decade. If Social Security did it for senior citizens and the British have successfully done it for kids, we can successfully cut child poverty too. In fact, knowing the negative consequences that child poverty has on children and their future success, the fact is that we cannot afford not to address this problem.
- Child Health: We have made such great progress with respect to children’s health coverage since the inception of CHIP. As a result, the nation should commit to protect and strengthen Medicaid and to fully fund and make permanent the Children’s Health Insurance Program, so that we continue to make progress toward ensuring all children have access to the health care they need to thrive, grow, and succeed.
- Education and Early Childhood: We all know that a 21st century education system must be built on the solid foundation provided by high-quality early childhood education and a public school system that is available to every child. Laying that foundation is not just an economic imperative — it is also about providing every child in this country a fair and equal opportunity to achieve their God-given potential.
- Child Abuse and Neglect: Rather than sweeping issues of child abuse and neglect and child trafficking under the rug as our nation has for far too long, we must shine a spotlight on the problems facing our nation’s most vulnerable children and commit to protecting and helping them overcome the ills that have befallen them and to put them on a better path to success.
- Immigration Reform: Now is the time to pass comprehensive immigration reform and that those efforts address the best interests of children and their families. Children of immigrants currently comprise 1 in 4 of all children in the United States, and yet, despite the significant impact of immigration policy on children’s lives, children have historically been disregarded and often intentionally excluded in U.S. immigration policy decisions. That must change for our nation’s children and families. And, as a bonus, the Congressional Budget Office says the legislation will reduce the federal budget deficit.
To improve the lives and well-being of children and to ensure the share of federal spending does not decline by another 20 percent as currently projected, the greatest generation may be asked to do a little belt tightening to help out their grandkids. As an example, a recent study estimatesthat private insurers in Medicare were overpaid by $34.1 billion in 2012 alone. If Congress were to eliminate such Medicare HMO overpayments, they would: (1) save taxpayer dollars; (2) eliminate waste; (3) extend the Medicare Trust Fund; (4) reduce premiums for all Medicare beneficiaries; and, (5) reduce spending in the Medicare Savings Program, which covers the premium costs charged to low-income Medicare beneficiaries.
And, if those savings were invested in helping set a new national agenda and commitment in support of the youngest among us, it could be a win-win scenario for both children and senior citizens.