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The Affluent Elderly

The Affluent Elderly

By Robert Samuelson - May 16, 2011

WASHINGTON -- When House Speaker John Boehner calls for trillions of dollars of spending cuts, the message is clear. Any deal to raise the federal debt ceiling must include significant savings in Social Security and Medicare benefits. Subsidizing the elderly is the biggest piece of federal spending (more than two-fifths of the total), but trimming benefits for well-off seniors isn't just budget arithmetic. It's also the right thing to do.

I have been urging higher eligibility ages and more means-testing for Social Security and Medicare for so long that I forget that many Americans still accept the outdated and propagandistic notion that old age automatically impoverishes people. Asks one reader: Who are these "well-off" elderly you keep writing about? The suggestion is that they are figments of my imagination, invented to justify harsh cutbacks in Social Security and Medicare on the needy.

Just the opposite. We see every day that many people in their 60s and older live comfortably -- and still would if they received a little less in Social Security and paid a little more for Medicare. The trouble is that what's intuitively obvious becomes lost in the political debate; it's overwhelmed by selective and self-serving statistics that cast almost everyone over 65 as being on the edge of insolvency. The result: Government over-subsidizes the affluent elderly. It transfers resources from the struggling young to the secure old.

To correct the stereotype, consult a government publication called "Older Americans 2010, Key Indicators of Well-Being." It reminds us that Americans live longer and have gotten healthier. In 1930, life expectancy was 59.2 years at birth and 12.2 years at 65; in 2006, those figures were 77.7 and 18.5. Since 1981, death rates for heart disease and stroke have fallen by half for those 65 and over. In this population, about three-quarters rate their own health as "good" or "excellent."

"Most older people are enjoying greater prosperity than any previous generation," the report says. Consider:

-- From 1959 to 2007, the proportion of the 65-plus population with incomes under the government's poverty line ($12,968 for a couple in 2009) dropped from 35.2 percent to 9.7 percent, which was half the poverty rate for children under 18 (18 percent).

-- The proportion of elderly living in the "high income" group -- defined as four times the poverty line, or almost $52,000 for a couple in 2009 -- rose from 18.4 percent in 1980 to 30.6 percent in 2007.

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Copyright 2011, Washington Post Writers Group

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