[Senate Hearing 112-873]
[From the U.S. Government Publishing Office]



                                                        S. Hrg. 112-873

 
                  THE RECESSION AND OLDER AMERICANS: 
                        WHERE DO WE GO FROM HERE

=======================================================================

                                HEARING

                               BEFORE THE

                SUBCOMMITTEE ON PRIMARY HEALTH AND AGING

                                 OF THE

                    COMMITTEE ON HEALTH, EDUCATION,
                          LABOR, AND PENSIONS

                          UNITED STATES SENATE

                      ONE HUNDRED TWELFTH CONGRESS

                             FIRST SESSION

                                   ON

 EXAMINING THE RECESSION AND OLDER AMERICANS: WHERE DO WE GO FROM HERE?

                               __________

                            OCTOBER 18, 2011

                               __________

 Printed for the use of the Committee on Health, Education, Labor, and 
                                Pensions


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          COMMITTEE ON HEALTH, EDUCATION, LABOR, AND PENSIONS

                       TOM HARKIN, Iowa, Chairman

BARBARA A. MIKULSKI, Maryland        MICHAEL B. ENZI, Wyoming
JEFF BINGAMAN, New Mexico            LAMAR ALEXANDER, Tennessee
PATTY MURRAY, Washington             RICHARD BURR, North Carolina
BERNARD SANDERS (I), Vermont         JOHNNY ISAKSON, Georgia
ROBERT P. CASEY, JR., Pennsylvania   RAND PAUL, Kentucky
KAY R. HAGAN, North Carolina         ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon                 JOHN McCAIN, Arizona
AL FRANKEN, Minnesota                PAT ROBERTS, Kansas
MICHAEL F. BENNET, Colorado          LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island     MARK KIRK, Illinois          
RICHARD BLUMENTHAL, Connecticut      


                    Daniel E. Smith, Staff Director

                  Pamela Smith, Deputy Staff Director

     Frank Macchiarola, Republican Staff Director and Chief Counsel

                                 ______

                Subcommittee on Primary Health and Aging

                   BERNARD SANDERS, Vermont, Chairman

BARBARA A. MIKULSKI, Maryland        RAND PAUL, Kentucky
JEFF BINGAMAN, New Mexico            RICHARD BURR, North Carolina
ROBERT P. CASEY, JR., Pennsylvania   JOHNNY ISAKSON, Georgia
KAY R. HAGAN, North Carolina         ORRIN G. HATCH, Utah
JEFF MERKLEY, Oregon                 LISA MURKOWSKI, Alaska
SHELDON WHITEHOUSE, Rhode Island     MICHAEL B. ENZI, Wyoming
TOM HARKIN (Iowa (ex officio)          

                Ashley Carson Cottingham, Staff Director

                Peter J. Fotos, Minority Staff Director

                                  (ii)

  
?



                            C O N T E N T S

                               __________

                               STATEMENTS

                       TUESDAY, OCTOBER 18, 2011

                                                                   Page

                           Committee Members

Sanders, Hon. Bernard, Chairman, Subcommittee on Primary Health 
  and Aging, opening statement...................................     1
Franken, Hon. Al., a U.S. Senator from the State of Minnesota....     3
Casey, Hon. Robert P., Jr., a U.S. Senator from the State of 
  Pennsylvania...................................................     9
    Prepared statement...........................................     9

                            Witness--Panel I

 Bovbjerg, Barbara D., Government Accountability Office (GAO), 
  Washington, DC.................................................     3
    Prepared statement...........................................     5

                          Witnesses--Panel II

Kingson, Eric, Ph.D., Syracuse University and Social Security 
  Works, Syracuse, NY............................................    13
    Prepared statement...........................................    15
Ruggles, Gail, Lyndonville, VT...................................    28
    Prepared statement...........................................    31
Hartmann, Heidi, Ph.D., Institute for Women's Policy Research, 
  Washington, DC.................................................    34
    Prepared statement...........................................    36
Nathan, Sandra, Ph.D., National Council on Aging, Washington, DC.    47
    Prepared statement...........................................    49

                          ADDITIONAL MATERIAL

Statements, articles, publications, letters, etc.:
    John Taylor, President and CEO, National Community 
      Reinvestment Coalition (NCRC)..............................    63
    NCOA--A Blueprint for Increasing the Economic Security of 
      Older Adults: Reauthorization of the Older Americans Act...    66
    National Council on Aging (NCOA)--Economic Security (Fact 
      Sheet).....................................................    67
    ONE AWAY--Stories of Struggle................................    69

                                 (iii)

  


      THE RECESSION AND OLDER AMERICANS: WHERE DO WE GO FROM HERE

                              ----------                              


                       TUESDAY, OCTOBER 18, 2011

                                       U.S. Senate,
                  Subcommittee on Primary Health and Aging,
       Committee on Health, Education, Labor, and Pensions,
                                                    Washington, DC.
    The subcommittee met, pursuant to notice, at 10:04 a.m. in 
Room SD-430, Dirksen Senate Office Building, Hon. Bernard 
Sanders, chairman of the subcommittee, presiding.
    Present: Senators Sanders, Franken and Casey.

                  Opening Statement of Senator Sanders

    Senator Sanders. Good morning, I'm Senator Bernie Sanders 
from Vermont and I think we're going to be joined by some of my 
colleagues in a bit. But I do want to thank all of you for 
being here, and especially our panelists.
    This country, I think we all know, is in the midst of the 
worst economic downturn since the Great Depression.
    Sixteen percent of our people are unemployed or 
underemployed, median family income has declined by over $3,000 
in the last decade, and almost all of the new income has gone 
to the people at the very top--top 1 percent.
    In the midst of all of this, it is enormously important 
that we ask a question that has not been asked enough, in my 
opinion, and that is what does this recession mean for older 
Americans.
    How are they faring in the midst of this terrible 
recession? What is the employment situation for people in their 
60s? Do most Americans, most working Americans, expect to be 
working throughout their entire lives?
    How many workers in their 60s have lost their jobs, have 
seen a decline in their incomes and, very importantly, how many 
older American workers who have lost their jobs are never, ever 
going to get another job? And what does that mean to the 
economy? What does it mean to the standard of living of that 
worker? Both economically and psychologically, if you 
anticipated working until the retirement age of 65 and now 
you're 61 and you are never going to get another job in your 
life--that's one of the issues that we are going to be talking 
about today.
    Another very important question that I don't think has been 
asked enough that needs some answers today is how do you 
survive economically in these tough times if, say, you get 
$12,000 in Social Security, and that's all of your income or 
virtually all of your income, and you haven't received a COLA 
for the last 2 years? What does that mean to you?
    Furthermore--and this is an enormously important issue, 
that needs a whole lot of discussion--does the current 
formulation for Social Security COLAs adequately reflect the 
purchasing habits of senior citizens?
    I can tell you that in Vermont, I hear over and over again 
from senior citizens who tell me, Bernie, I don't quite 
understand how they think there has been no inflation when my 
prescription drug costs are soaring, my health care costs are 
soaring and we don't get a COLA.
    Is the current formulation regarding COLAs adequate? And 
that becomes very important because I think tomorrow or in the 
very near future, we're going to be hearing about what COLAs, 
if any, our seniors will be receiving.
    Is the current formulation adequate or do we need a new 
formulation that better reflects the purchasing needs of 
seniors?
    According to information that we will be receiving today--
and this is really rather stunning--the bottom 20 percent of 
senior citizens in our country live on incomes of less than 
$12,080 a year. Let me repeat that. Bottom 20 percent of 
seniors in this country--millions of people--live on incomes of 
less than $12,080 a year.
    In fact, the average income for a senior in the bottom 20 
percent is about $7,500. And I hope that our distinguished 
panelists will explain to me and the American people how any 
person in this country, let alone a senior with specific needs 
often regarding health care, can survive in the year 2011 on 
$7,500 a year.
    Now, importantly, and let's be very frank about this, as 
many Americans know, there is a major effort on the part of 
some in Congress, especially in the Republican-led House of 
Representatives, to make major cuts in Social Security, 
Medicare, Medicaid, the LIHEAP heating assistance program, 
community health centers, affordable housing, and nutrition 
programs. Now, if these cuts were to take place, what impact 
would they have on seniors?
    Now, my office learned yesterday that Senator Paul, the 
Ranking Member, would not be here this morning and I am 
disappointed by that, and I hope that perhaps he or some other 
Republicans will, in fact, come to this hearing this morning to 
talk about these important issues because I'll tell you, it is 
very easy to get up on the floor of the Senate and to announce 
how you are in favor of cutting Social Security, cutting 
Medicare, cutting Medicaid, cutting heating assistance, but it 
may be a little bit harder to learn what the impact of those 
cuts will mean on real human beings and what kind of suffering 
will take place, and how many people, perhaps, will die as a 
result of those cuts.
    So this is an important hearing and I look very much 
forward to hearing the testimony from the GAO and from our 
other distinguished panelists.
    And with that, let me introduce Senator Franken for some 
opening remarks.
    Thank you, Senator Franken.

                      Statement of Senator Franken

    Senator Franken. Thank you, Mr. Chairman, for holding this 
extremely important hearing.
    I have no opening remarks other than to say that as we get 
to the reauthorization of the Older Americans Act, I have 
instructed my staff in Minnesota to do a number of roundtable 
discussions. I, myself, have also participated in them and held 
a field hearing when I was with the Special Committee on Aging, 
and have done just a whole bunch of events at senior centers 
and have had this discussion.
     I think everything that Senator Sanders spoke to is very, 
very important and I did have an opening statement--what do you 
know?
    I look forward to hearing the testimony today. I do think 
that cutting Social Security--that Social Security has had 
nothing to do with our deficit. If anything, we've been 
borrowing from the Social Security surplus and using it--not 
lockboxing it.
    So I look forward to the testimony today and to the 
discussion of what we can do in this recession or in this 
economic slowdown to make sure that seniors live a dignified 
life and have a dignified retirement, and also that seniors 
who, or those who are approaching seniorhood, like I am, in an 
economy where, as we will hear from some of the testimony where 
folks are out of work--who have lost jobs can't get jobs for 
just a record amount of time now--what recourse they have.
    So I want to thank these two witnesses and the witnesses in 
the second panel. Thank you, Mr. Chairman.
    Senator Sanders. Thank you. Thank you, Senator, and thank 
you for all that you've done for seniors.
    We're going to begin with Barbara Bovbjerg, the managing 
director for Education, Workforce and Income Security Issues at 
the U.S. Government Accountability Office.
    Previously, Ms. Bovbjerg was the director for Retirement 
Income Security, and in that capacity managed studies on Social 
Security and pension policy and management.
    Before joining GAO, she led the Citywide Analysis Unit of 
the District of Columbia's Budget Office and we thank you very 
much for being with us this morning.

  STATEMENT OF BARBARA D. BOVBJERG, GOVERNMENT ACCOUNTABILITY 
                     OFFICE, WASHINGTON, DC

    Ms. Bovbjerg. Thank you, Mr. Chairman, Senator Franken.
    Thank you so much for inviting us here today to discuss the 
effects of the recent recession on older adults. While the 
recession officially ended in June 2009, the economy has 
experienced a weak recovery with unemployment still above 9 
percent.
    Older adults, particularly those close to or in retirement, 
may not have the same opportunities as younger adults to 
recover from the recession's effects and still assured that 
they will have sufficient savings for retirement.
    My testimony today will present the results of our work for 
this subcommittee on older Americans' well-being. Our report, 
which is being released today, presents data from various, 
mostly Federal, sources concerning the financial status of 
older adults.
    I am accompanied by Michael Collins, our assistant director 
for this project.
    Things weren't especially great for older adults in 2007, 
before the recession. We've previously reported that older 
Americans were heavily reliant on Social Security benefits with 
about a fifth of beneficiaries over 65 receiving more than 80 
percent of their income from this source.
    This reflects relatively small amounts of retirement 
savings for many older people. Almost half of American workers 
have no defined benefit or defined contribution pension to 
supplement Social Security, and even those who do have a 
pension will still not have enough to live comfortably in 
retirement.
    In 2007, before the great recession began, the median level 
of financial assets for households approaching or entering 
retirement was only around $72,000. This may sound like a lot 
of money, but it has to last a retiree for decades. Using basic 
rules of thumb for withdrawals, this amount would provide for 
about a 5 percent replacement rate for those at median incomes.
    Even with Social Security, this isn't enough to support a 
middle-class standard of living. So, older Americans weren't 
especially flush prior to the recession, and things have not 
gotten better.
    Since 2007, annual unemployment rates have doubled from 3 
percent to 7 percent for workers age 55 and older. These rates 
are not as high as for other age groups, likely because older 
workers have seniority and are less likely to lose their jobs 
than younger colleagues.
    Still, once an older worker does lose their job, they are 
less likely than a younger worker of similar skill to find 
another.
    Indeed, the median duration of unemployment for older 
workers rose sharply between 2007 and 2010, more than tripling 
for workers 65 and older, and increasing from 11 weeks to 31 
weeks for workers age 55 to 64. During this period, even among 
those employed, the proportion of older part-time workers who 
indicated they would prefer full-time work nearly doubled.
    The recession also left older adults with difficult choices 
regarding retirement savings. Neither stocks nor real estate 
have recovered from their low points during the recession, and 
continued low interest rates mean that savings provide little, 
if any, interest income after inflation.
    In these circumstances, those approaching retirement find 
they may not be able to retire at all until such time that 
markets recover. Those already in retirement and managing their 
own assets face reduced circumstances without time to adjust by 
saving more.
    Indeed, in an AARP survey, 50 percent of older people who 
reported having difficulty making ends meet delayed getting 
medical or dental care or ceased taking medication entirely.
    Those with defined benefit plans are protected from market 
swings, but increasingly, older adults are managing their own 
savings via 401k plans or IRAs, and are thus vulnerable to 
market volatility.
    In the only bright spot, adults age 65 and older were 
somewhat protected during this period, likely thanks to Social 
Security. Although household income fell for adults aged 55 to 
64, those 65 and older experienced an increase in household 
income. And, similarly, while poverty rates increased for those 
age 55 to 64, they decreased for those 65 and older, although 
this changes when medical costs are factored in.
    It seems that Social Security is an important protection, 
as it is intended to be, to those eligible for those benefits.
    In conclusion, the great recession has had a profound 
impact on older adults. Many have lost employment and wealth, 
and have little time relative to their younger counterparts to 
make up the difference before they retire. And some will not 
retire voluntarily but may either lose their job from lay-offs 
or from physical disability.
    Fortunately, Social Security has largely protected retirees 
from poverty, but it is intended to be a foundational benefit 
and not the sole source of income. Americans' increased 
vulnerability to the fluctuations and complexities of the 
financial markets for their retirement security means that they 
are increasingly unprotected from a retirement in reduced 
circumstances.
    Helping protect a rapidly growing population of older 
people offers a special challenge as we seek economic recovery 
for all Americans.
    And that concludes my statement. I hope our written 
statement will be submitted for the record, and I await your 
questions.
    [The prepared statement of Ms. Bovbjerg follows:]

               Prepared Statement of Barbara D. Bovbjerg

    Mr. Chairman, Ranking Member Paul, and members of the subcommittee, 
I am pleased to be here today to discuss the effects of the recent 
recession on older adults.\1\ While the recession officially ended in 
June 2009, our economy has experienced a weak recovery, with 
unemployment still above 9 percent. Older adults--particularly those 
close to or in retirement--may not have the same opportunities as 
younger adults to recover from the recession's effects. For example, 
older adults--generally those 55 and older--may have insufficient time 
to rebuild their depleted retirement savings due to sharp declines in 
financial markets and home equity, and increased medical costs. 
Further, while older workers are less likely to be unemployed than 
workers in younger age groups, when older workers lose a job they are 
less likely to find other employment.\2\ These changes have intensified 
older adults' concerns about having sufficient savings now and adequate 
income throughout retirement.
---------------------------------------------------------------------------
    \1\ The National Bureau of Economic Research Business Cycle Dating 
Committee identifies the period of this recession to be December 2007 
through June 2009.
    \2\ GAO, Social Security Reform: Raising the Retirement Ages Would 
Have Implications for Older Workers and SSA Disability Roles, GAO-11-
125 (Washington, DC.: Nov. 18, 2010).
---------------------------------------------------------------------------
    Social Security forms the foundation of income for nearly all 
retiree households, providing 36 percent of aggregate income for 
households with a member aged 65 and older; however, it provides a much 
greater portion of income for low and middle income households. 
Pensions and assets together provide 31 percent of aggregate income. 
However, many older adults lack any pension; 44 percent of full-time 
workers in their 50s have neither a defined benefit nor a defined 
contribution pension from their current employer; and the number of 
active defined benefit plan participants has declined since 1990. In 
2007, before the recession began, the median level of financial assets 
for households approaching or entering retirement was around $72,000. 
Using a 4 percent withdrawal rate in retirement, this amount would 
replace about 5 percent of these families' $55,000 median annual 
household income. Although most retirees would also receive Social 
Security benefits, for many retirees even these will not be sufficient 
to maintain their standard of living. Older Americans' income varies 
widely. In 2008, annual income for households with a member age 65 and 
older ranged from $7,466 for those in the lowest of five income groups 
to $109,543 for the highest of five income groups (see fig. 1).



    Those in the lowest and middle groups received most of their income 
from Social Security retirement benefits, while those in the highest 
group on average received most of their income from earnings, asset 
income, and pensions.
    Today's testimony is based on a GAO report that we are releasing at 
this hearing, titled Income Security: Older Adults and the 2007-2009 
Recession.\3\ This report examined: (1) What changes have occurred in 
the employment status of older adults, generally those 55 and older, 
with the recession? (2) How have the incomes and wealth of older adults 
in or near retirement changed with the recession? (3) What changes have 
occurred in the costs of medical care, the purchasing power of Social 
Security benefits, and mortality rates for older adults in recent 
years? To address our objectives, we used Bureau of Labor Statistics 
(BLS) and Census Bureau data concerning the employment status of older 
adults,\4\ Census Bureau and Federal Reserve Board data concerning the 
income and assets of older adults, BLS data concerning the costs of 
medical care, Social Security Administration and BLS data concerning 
the purchasing power of Social Security benefits, U.S. Department of 
Agriculture data concerning food security, and Centers for Disease 
Control and Prevention data concerning mortality rates for older 
adults.\5\ We determined that the data were sufficiently reliable for 
the purposes of the report. We also reviewed relevant Federal laws and 
regulations. We conducted our review between July and September 2011 in 
accordance with generally accepted government auditing standards. Those 
standards require that we plan and perform the audit to obtain 
sufficient, appropriate evidence to provide a reasonable basis for our 
findings based on our audit objectives. We believe that the evidence 
obtained provides a reasonable basis for our findings and conclusions 
based on our audit objectives.
---------------------------------------------------------------------------
    \3\ GAO, Income Security: Older Adults and the 2007-2009 Recession, 
GAO-12-76 (Washington, DC.: Oct. 17, 2011).
    \4\ Data on the labor market outcomes of displaced workers and the 
number of older workers who are low-wage are based on GAO analyses of 
microdata from the Current Population Survey. For our analysis of the 
re-employment experiences of older displaced workers, we used data from 
the 2008 and 2010 Displaced Worker Supplements to the CPS; the analysis 
was not restricted to workers who had held the job from which they were 
displaced for a minimum period of time. For our analysis of low-wage 
older workers, we used data from the outgoing rotation groups of the 
CPS (the basic monthly CPS) for the years 2007 and 2010. We defined 
``low-wage'' as those with an hourly wage rate in the bottom quintile 
(bottom 20 percent) of wages across the workforce for workers who 
reported positive earnings. We estimated the hourly wage rate using 
usual weekly earnings divided by usual hours worked per week.
    \5\ Since data on life expectancy are based on projections using 
older data, prior to the recession, we examined mortality rates, which 
directly affect life expectancy and have more updated data available.
---------------------------------------------------------------------------
    Mr. Chairman, the following summarizes our findings on each of the 
three issues discussed in our report.
    Since 2007, unemployment rates doubled and remained higher than 
before the recession for workers aged 55 and older. While these rates 
were not as high as for other age groups, of more concern is that once 
older workers lose their jobs they are less likely to find other 
employment. In fact, the median duration of unemployment for older 
workers rose sharply from 2007 to 2010, more than tripling for workers 
65 and older and increasing to 31 weeks from 11 weeks for workers aged 
55 to 64 (see fig. 2).



    In addition, the proportion of older part-time workers who 
indicated they would prefer full-time work nearly doubled during this 
time.
    Household income fell by 6 percent for adults 55-64, but increased 
by 5 percent for adults 65 and older. Median household net worth fell 
during the recession for older adults. Poverty rates increased for 
adults aged 55-64, but declined for those 65 and older, while low 
incomes were more prevalent in older age groups than in younger ones 
(see fig. 3).



    Furthermore, the recession leaves older adults with difficult 
choices regarding retirement savings. Neither stocks nor real estate 
have recovered from their low points during the recession, and 
continued low interest rates mean that savings provide little, if any, 
interest income after inflation.\6\ According to a survey by the AARP 
Policy Institute, many older Americans experienced financial hardship 
during the recession.\7\ For example, nearly a quarter of survey 
respondents aged 50 and older indicated that they or someone in their 
family had exhausted or used up all of their savings during 2007-10, 
while more than 12 percent stated that they or someone in their family 
had lost their health insurance.\8\
---------------------------------------------------------------------------
    \6\ In 2009, however, real interest rates were positive as consumer 
prices fell.
    \7\ See AARP Public Policy Institute, Recovering from the Great 
Recession: Long Struggle Ahead for Older Americans (Washington, DC.: 
2011). AARP surveyed adults aged 50 and over who had been in the labor 
force at some point during the previous 3 years. Their findings were 
based on a random sample of U.S. residents aged 50 and older from a 
panel representative of the U.S. population.
    \8\ This question was asked of those aged 50 or older (n=5,027): 
Which if any of the following financial hardships have you/your family 
experienced in the past 3 years?
---------------------------------------------------------------------------
    Among those who reported having difficulty making ends meet during 
2007-10, nearly 50 percent reported that they delayed getting medical 
or dental care, or delayed or ceased taking medication. In addition, 
more than one-third reported that they had stopped or cut back on 
saving for retirement.
    Medical costs continued to rise faster than other costs, and older 
adults continued to spend more on medical care than those in younger 
age groups. The purchasing power of Social Security benefits was 
maintained with cost-of-living adjustments and, for those receiving 
benefits in 2009, increased with a one-time $250 Recovery Act payment 
in 2009.\9\ Mortality rates for older adults continued a long-term 
decline during 2007-9.
---------------------------------------------------------------------------
    \9\ Cost-of-living adjustments are currently based on the consumer 
price index for urban wage earners and clerical workers, reflecting 
prices for these workers. There is concern that this measure may be 
based on consumer items that may not be representative of those 
purchased by older adults. No reliable measure is currently available 
of inflation targeted exclusively on older adults' consumption.
---------------------------------------------------------------------------
    In conclusion, the recession of 2007 to 2009 has had a profound 
impact on older adults, many of whom, like other groups, have lost 
employment and wealth. The major challenges for older adults are that 
they face a shorter timeframe before retirement to make up for these 
losses. Social Security likely helped keep some eligible long-term 
unemployed older adults from falling into poverty, but workers who had 
to leave the workforce prematurely could still face insufficient income 
at older ages. In addition, more of today's older retirees are able to 
rely on lifetime retirement income from defined benefit plans than will 
in the future. The shift from defined benefit to defined contribution 
pension plans will make future retirees more dependent on their own 
choices about how much to save, how to invest those savings, at what 
age to retire, and how to draw upon those savings; and make them more 
vulnerable to financial market volatility.
    Chairman Sanders, this concludes my statement. I would be happy to 
answer any questions that you or other members of the subcommittee 
might have.

    Senator Sanders. Thank you very much.
    Now we will hear from Senator Casey, who I believe wanted 
to make an opening statement.

                       Statement of Senator Casey

    Senator Casey. Thank you, Senator Sanders. I want to, first 
of all, thank you for convening this hearing on this important 
topic, and I won't be here for all of the testimony but I am 
especially grateful.
    I represent a State that has, depending on what the latest 
number is, probably the third highest number of individuals 
over the age of 65. So we have at least over 1.9 million over 
the age of 65 and, of course, big numbers just below 65.
    And I think what this hearing does is remind us not only of 
the gravity of the impact of the recession but it also reminds 
us how urgent the work is we're doing right now to put in place 
job-creation strategies.
    We're finally at a point where we're actually debating and 
voting on a series of job-creation ideas and this report that 
the GAO has done and the other testimony from our witnesses 
should give added urgency to the work that we're doing because 
we've got to do everything we can to prevent even further 
damage to people's lives and their communities. So, it's been a 
horrific time for a lot of families and probably ever more so 
for older workers and their families.
    So, we're grateful for the scholarship and the work that 
goes into this report and grateful for the testimony of our 
witnesses.
    Thank you very much.
    [The prepared statement of Senator Casey follows:]

                  Prepared Statement of Senator Casey

    I would like to thank Chairman Sanders for holding this 
important hearing on the recession and older Americans. We must 
remember that the recession is affecting all Americans at every 
stage of life, including older Americans. Older Americans 
continue to feel the effects of the recession.
    Workers aged 55 and older faced an unemployment rate of 6.7 
percent in September 2011, more than double the 3.0 percent 
unemployment rate these workers experienced in November 2007, 
just before the recession began. The unemployment rate for 
workers 55 and older peaked at 7.3 percent in August 2010. 
However, last month's unemployment rate for older workers of 
6.7 percent represents a 0.6 percentage point decline from its 
peak, the unemployment rate for these workers in September 2011 
was the same as it was in January 2011. In the past year, older 
workers have seen some progress. The number of unemployed 
workers aged 55 and over declined from 2.2 million in September 
2010 to 2.1 million in September 2011. While this is an 
encouraging development, there are still many older Americans 
in need of help.
    As rising energy prices, a struggling economy and 
increasing food costs place a heavy burden on our most 
vulnerable citizens. The Federal Government has a 
responsibility to help people afford the most basic needs. 
Older Americans throughout the country are being forced to 
choose between heat, food, medicine, gasoline, mortgage 
payments, and other necessities. This is truly unacceptable.
    Many assistance programs such as Social Security, meals on 
wheels, the Low Income Home Energy Assistance Program (LIHEAP) 
and the Senior Community Service Employment Program have helped 
keep many older Americans out of poverty. According to data 
recently released from the Census Bureau, Social Security 
benefits alone kept 13.8 million Americans age 65 and older out 
of poverty in 2010. LIHEAP is another program many older 
Americans depend on. For years, LIHEAP has effectively and 
efficiently delivered help to the most vulnerable individuals 
and the need has never been greater. In Pennsylvania, older 
Americans make up 33 percent of LIHEAP beneficiaries. Older 
Americans should not have to choose between staying warm in the 
winter and their medications. While working to close the Donut 
Hole in the Medicare Part D program is one way to help this 
problem, we must continue to fund the programs our most 
vulnerable older citizens rely on, especially in these 
difficult times.
    As many here know, Pennsylvania is one of the oldest States 
in the country. We are consistently in the top five for 
percentage of older citizens. We have an abiding responsibility 
to get this right. These are the people who fought our wars, 
worked in our factories, taught our children and gave us life 
and love. It is now our turn to repay that service.
    We must continue to work to minimize the impact of the 
recession on Older Americans as well as the impact to citizens 
10 to 15 years away from retirement. With the increasing number 
of individuals with little or no employer pensions and declines 
in retirement savings we must work to make sure these Americans 
have what they need when they reach retirement age. I look 
forward to hearing from our witnesses and again, appreciate the 
Chairman calling this hearing.

    Senator Sanders. Thank you, Senator Casey.
    Let me begin, Ms. Bovbjerg, with just a few questions. You 
mention in your report that workers 65 years of age and older 
saw their length of unemployment triple, and you mention in 
your report that workers 55 to 64 saw their length of 
unemployment almost triple. And you also mention that one-third 
of workers 65 or older are in low-wage jobs.
    In human terms, what does it mean if somebody is 65 or 66 
today and loses their job, or 62 and lose their job? In your 
judgment--and I know there are, obviously, exceptions--but are 
many of those workers never again going to be working and what 
happens to their lifestyle if that income is not coming in to 
their family?
    Ms. Bovbjerg. We've previously reported on the situation 
for older workers that they are less likely to lose their jobs 
than younger workers. But once they do, it is very hard for 
them to get another.
    They may have skill issues with shifting to another job. 
They may have health issues. They also, frankly, have employer 
issues. Employers will not always look to hire older workers.
    So it is very difficult for older people, once unemployed, 
to go back and get a job. But if they are lucky enough to be at 
least age 62, they can claim Social Security benefits. 
Unfortunately, if you claim benefits at age 62, you're going to 
get 25 percent less on a monthly basis than if you wait for the 
full retirement age of 66. But it is still available to you, 
and we have seen increased claiming as a consequence of the 
recession.
    Senator Sanders. So, very specifically, what you're saying 
is that many more seniors are now taking Social Security at 62 
at 25 percent less benefits than waiting until 66.
    Ms. Bovbjerg. That's correct.
    Senator Sanders. All right.
    Could you elaborate on the GAO's finding about the 
important role that Social Security and Medicare and Older 
Americans Act programs have on protecting the financial 
stability of our Nation's seniors? You talk about the poverty 
rate not declining when people reach Social Security.
    And also, what would happen if Social Security programs 
were cut? What happens if the eligibility age for Medicare goes 
from 65 to 67? What would your guess be about the implications 
of that?
    Ms. Bovbjerg. Let me talk first about Social Security 
because Social Security is there to assure a baseline income 
for older people, and has done its job. It has reduced poverty 
rates for older people fairly steadily since its inception.
    Clearly, if people don't have Social Security to go to, you 
would see a different pattern in poverty levels at age 65 and 
older. But something you'd have to worry about in Social 
Security--and you alluded to this earlier with cost-of-living 
increases--is that older women in Social Security have higher 
poverty rates than the average that we reported for everyone 
over 65. And so a concern in anything that might happen with 
the COLA is what would happen with those older women who, in 
their 80's, may find themselves in poverty.
    Now, I cannot comment on the increase in the age for 
Medicare. That is completely outside of my area of expertise. 
But I can say that the things that you hear from older people 
and the information we have on medical costs suggest that those 
make quite a difference to what they perceive they are able to 
spend on other things--to their disposable income.
    Senator Sanders. OK. Senator Franken.
    Senator Franken. Thank you again, Mr. Chairman, for calling 
this hearing.
    Ms. Bovbjerg, as I mentioned in my opening statement, the 
Older Americans Act is coming up for reauthorization, and it 
really provides a number of services that allow seniors to 
remain independent.
    In a way, that actually saves the Federal Government money 
because these folks end up being able to stay in their homes 
instead of getting much more expensive nursing home care. And 
some of the services that are provided include home-delivered 
meals or meals in congregate settings, job training, which 
we'll hear from in the next panel, transportation, and respite 
care for caregivers.
    Based on the findings of the GAO study, would you say that 
the need for these types of programs will increase or decrease 
in the coming years as our aging population reaches an all-time 
high?
    Ms. Bovbjerg. The need will increase simply because of the 
demographics, if nothing else. The Baby Boomers are entering 
their retirement years and as they get older there will be an 
increased demand for these services.
    We did do some work for the Senate Special Committee on 
Aging on this topic--the Older Americans Act--and discovered 
that the States and the communities that are providing these 
services are just overwhelmed, and it will only get worse.
    The concern that we had is there really isn't much sharing 
of ways to address services. There isn't a lot of targeting of 
services. So while many people may be receiving services, 
probably the people who need it the most are not always getting 
those kinds of services, and we think that there's a Federal 
role there to help these communities. But just based on the 
demographics, there will be a greatly increasing demand.
    Senator Franken. Given that we're talking about the effect 
of the recession on older Americans, and given that you're 
seeing higher unemployment as you are across all sectors and 
especially with seniors once jobs are lost incredibly in 
expansion of the time that it takes to get another job.
    So with longer unemployment and lower wages, as we're 
seeing, and decreased savings, there's an increase in a 
reliance on Social Security, is there not?
    And I think it's really especially important at this time 
to maintain Social Security benefits, not only at their level 
but to use the COLA to increase them. Would you agree with 
that?
    Ms. Bovbjerg. Senator, for at least 10 years GAO has been 
very, very concerned about Social Security because of the 
future--the financial instability of the program but the 
importance of it to the American people, and it is, clearly, 
something that's a decision for Congress and we cannot make any 
recommendations.
    But it is something that needs to be thought through very, 
very carefully precisely because of your point--that people are 
so reliant and becoming more so on Social Security.
    Senator Franken. The title of today's hearing is ``Where Do 
We Go From Here.'' Given your research, what would be your 
advice to older Americans who have been particularly hard hit 
by the recessions? What are the strategies that they can employ 
now to rebuild their retirement savings?
    Ms. Bovbjerg. I wish I knew. If you're already retired and 
you're reliant on a 401K or an IRA--you're relying on the 
financial markets--you are probably really reducing your 
spending on other things. You're probably making a significant 
change to the standard of living.
    Senator Franken. And there are choices made sometimes that 
aren't good choices--between heat and between medicine and 
between food. I mean, that's something that we should just 
recognize that is happening, right?
    Ms. Bovbjerg. People are making choices and that AARP 
survey suggested that the first thing to go is medical care and 
medicine, even though those over 65 would be eligible for 
Medicare.
    Senator Franken. In a number of the senior meetings that 
I've held, it's been very, very common for people's only income 
to be Social Security. For one reason or another, their savings 
have been depleted and they require certain medicine and they 
have to make choices. And one of the things--and I'll get into 
it in the next panel--is that the Affordable Care Act is 
closing the donut hole, which I think is very important to do 
and I think a repeal of the Affordable Care Act just in that 
alone would be disastrous.
    Thank you for your good work.
    Ms. Bovbjerg. Thank you, Senator.
    Senator Sanders. Before we bring up the second panel, Ms. 
Bovbjerg, the average income of a senior living in the bottom 
20 percent quintile is $7,500. How does somebody, in your 
judgment, survive in the year 2011 with health care needs and 
prescription drug needs? How do you survive on $7,500, do you 
think?
    Ms. Bovbjerg. I think that they are probably tremendously 
reliant on the programs in the Older Americans Act--for 
example, for meals, for transportation. They're very reliant on 
Medicare. They're probably getting food assistance through the 
SNAP program. They would be tremendously reliant on supports 
like this.
    Senator Sanders. And would it be fair to say that if those 
programs were cut it would be devastating for people who are 
just right now living on the edge?
    Ms. Bovbjerg. It would be very difficult for them to 
adjust. I think that is really our point in our work as we 
looked at things that are happening with younger adults. But 
with older adults, they have really limited ability to adjust.
    Senator Sanders. OK. Thank you very much and we'll hear 
from our second panel now.
    Ms. Bovbjerg. Thank you.
    [Pause.]
    Senator Sanders. OK. We have a great panel here. We have 
some of the leading experts in the country on senior issues and 
we're going to be delving into what's happening economically, 
financially, for seniors and we're very, very pleased and I 
want to thank all of you for being with us this morning.
    We're going to begin with Dr. Eric Kingson. Dr. Kingson is 
a professor of social work and senior research associate in the 
Maxwell School's Center for Public Policy at Syracuse 
University.
    He is also a co-director of Social Security Works and a 
founding board member of the National Academy of Social 
Insurance. So we're very pleased that Dr. Kingson is with us 
today.
    Doctor.

   STATEMENT OF ERIC KINGSON, Ph.D., SYRACUSE UNIVERSITY AND 
              SOCIAL SECURITY WORKS, SYRACUSE, NY

    Mr. Kingson. Senator, thank you, and thank you very much, 
Senator Franken, as well, and other members of the committee 
for holding this hearing and for focusing on human beings, in 
particular, because ultimately these policies are about the 
lives of Americans and we lose that too often. So thank you 
very much.
    As you mentioned, my name is Eric Kingson. I'm a professor 
at Syracuse University. I also served as staff to two 
Presidential commissions on Social Security including the 
Greenspan Commission in 1982, and most of my work is on the 
politics and economics of the aging, and now co-direct Social 
Security Works and co-chair the Strengthen Social Security 
campaign, which both members present today on the issues and 
the programs have been extraordinarily supportive of. Thank 
you.
    To summarize main points--I submit my written testimony for 
the record, if I may--there's nothing, absolutely nothing, that 
provides the surety of protection, the widespread protection, 
of Social Security and nothing is going to replace it in the 
next 50 years, 60 years.
    It is as that chart shows--and I'll be happy to talk about 
that in Q and A--the single most important source of income for 
the vast majority of older people. For older persons with less 
than $31,000, I believe, roughly, it provides 75 percent of the 
aggregate income going into their households. Critical--it's 
not going to be replaced.
    Former presidents, former Congresses were wise to establish 
and maintain the cost-of-living adjustment--and it's my hope 
that in the future Members of Congress will also be doing the 
same and try to maintain a standard of cost-of-living adjust 
that accurately reflects the cost-of-living changes for older 
people, people with disabilities and others.
    The weight of evidence, as has been mentioned, concerning 
the current cost-of-living adjustment mechanism is that it 
understates the impact of inflation on older Americans.
    It falls short of assuring that older Americans maintain 
their purchasing power no matter how long they live because 
primarily, it does not give sufficient weight to the impact of 
health and health care in cost increases on these populations.
    The alternative, CPI or the chained-CPI or also called the 
superlative CPI that's being proposed by some members of the 
supercommittee and has been discussed in the deficit reduction 
discussions, that alternative simply does not pass the smell 
test.
    It would only make a situation we have today worse. We are 
not adequately, in my opinion and in the opinions of others, 
adjusting for inflation.
    Today, the chained-CPI, if it's implemented, will further 
reduce benefits. A woman who retires at age 65 living to 75 
would get a benefit about $600 less in real dollars. Ten years 
later at age 85, about $950 or so less and at age 95, if she 
lives so long, it would be roughly $1,400 less than it would 
have been if the chained-CPI is put into effect.
    The consumer price index for the elderly, which the Older 
Americans Act asked be developed by the Bureau of Labor 
Statistics, CPI-E for Americans over age 62 is a far superior 
measure of inflation but it too is less than perfect. But it 
certainly is better than what we have in play today.
    In terms of the impact of inflation on older households and 
on persons with disabilities, the public would be very well-
served if initially the CPI-E were put into effect and if 
Congress requested further development and testing of price 
indices.
    We all have an interest in an accurate CPI--Democrats, 
Republicans all have an interest in that. The problem is I 
think today we do not have an accurate CPI. I think if we get 
an accurate CPI it would, in fact, adjust benefits.
    We don't want a national policy that says the longer you 
live the less purchasing power your Social Security has. That's 
what we will have if we implement the chained-CPI--and it is 
also arguably what we still have today because the current CPI 
does not fully adjust for it.
    The implications, by the way, of the chained-CPI on the SSI 
program are even more deleterious because it would both cut 
benefits in the beginning before people get benefits and it 
would also be cutting their benefits after that. Whether 
they're implemented in 2011 or 2021, the chained-CPI would 
violate promises that Members of Congress and the President 
have made that there would be no changes to Social Security 
benefits affecting people 55 and over.
    It's bad policy. It's also terrible public relations. 
Social Security is a promise. It's a promise Americans expect 
their government to keep and this is true across all political 
spectrums. Across political spectrum it's true for Tea Party 
households and union households.
    Americans are not easily deceived and if Congress chooses 
to implement the chained-CPI ultimately they'll understand that 
in terms of Social Security over 10 years it will take $112 
billion directly out of the pockets of Social Security 
beneficiaries. They will understand that their government has 
let them down.
    So it's very important that you're casting light today on 
this issue and it's very appreciated that you have put this 
panel together and we are delighted to assist in any way 
possible.
    Thank you.
    [The prepared statement of Mr. Kingson follows:]

                Prepare Statement of Eric Kingson, Ph.D.

    Chairman Sanders, Ranking Member Paul and other distinguished 
members of the Senate Committee on Health, Education, Labor, and 
Pensions Subcommittee on Primary Health and Aging, as you know well, 
the recession has destabilized the finances of many retirees and people 
nearing retirement as well as the economic prospects of younger working 
persons. Thus, it is important that you have chosen to examine how 
Older Americans are faring in these very difficult times, and it is an 
honor to appear before your panel.
    My name is Eric Kingson. I am a professor at the Syracuse 
University School of Social Work. My scholarship and research address 
the political and economic consequences of population aging. 
Previously, I directed a study for the Gerontological Society of 
America in 1984-85 which examined various ways of framing policy 
discussion about the aging of America, and I served as an advisor to 
the 1982-83 National Commission on Social Security Reform and to the 
1994 Bipartisan Commission on Entitlement and Tax Reform. I also co-
direct Social Security Works and co-chair the Strengthen Social 
Security Campaign (www.strengthensocialsecurity.org). To summarize my 
main points:

     Nothing provides the surety of protection afforded by 
Social Security, the single most important source of income for the 
overwhelming majority of retirees.
     Former presidents, beginning with Richard Nixon, and 
former congresses were wise to establish and maintain Social Security's 
automatic Cost-of-Living-Adjustment (COLA).
     The CPI-W, currently used to calculate the COLA, does not 
fully take into account the impact of rising health care costs on Older 
Americans (and persons with severe work disabilities and survivors). 
Therefore, it falls short of assuring that Social Security benefits 
maintain purchasing power, no matter how long a retiree, disabled 
worker or survivor lives.
     The alternative ``Chained-CPI'' doesn't pass the ``smell 
test'' and would cut benefits of all retirees, survivors, and persons 
with severe work disabilities, a clear violation of promises made to 
Social Security beneficiaries and persons nearing retirement.
     The Consumer Price Index for the Elderly (CPI-E) for 
Americans 62 and older, an index whose development was mandated by the 
1987 Amendments to the Older Americans Act, does a better job of 
maintaining the purchasing power of benefits because it takes into 
account the disproportionate and rising cost of health care for the old 
and disabled.

    Which measure Congress chooses matters greatly to the lives of 
everyday Americans. Consider for a moment what a choice of indexes 
would mean for Jane Smith, a hypothetical never-married woman described 
in Appendix A who worked for 40 years as a legal secretary at a salary 
that was roughly equivalent to the average earner in the U.S. economy 
(e.g., about $43,000 in 2010). She begins with a yearly Social Security 
benefit of $15,132.

     Assuming current law (i.e. the CPI-W) correctly measures 
the impact of inflation of retirees, the purchasing power of her 
benefits will remain the same, no matter how long she lives, $15,132 in 
2011 dollars.
     But if the chained-CPI was used to determine COLAs since 
her retirement, her annual Social Security benefit would lose $560 in 
purchasing power (in 2011 dollars) at age 75, $984 at age 85, and 
$1,392 at age 95, a cumulative loss of $24,019 if she reaches that age.
     If, as many experts believe, the CPI-E is the more 
accurate, the purchasing power of her benefits will decline by $393 in 
purchasing power (in 2011 dollars) at age 75 (relevant to current law), 
$798 at age 85, and $999 at age 95.
     Relative to the CPI-E, the chained-CPI would cut her 
benefits by $953 (in 2011 dollars) at age 75, $1,688 at age 85, and 
$2,391 at age 95.

    Bottom line, the chained-CPI poses a very significant danger to Ms. 
Smith, and by extension to all Social Security beneficiaries, now and 
in the future. It underestimates the impact of inflation on retirees, 
persons with disability and survivors (see figure 1).



 the importance of social security, for today's and tomorrow's retirees
    Today's retirees and persons nearing retirement are at great risk. 
Home equity and stock market losses have taken a large bite out of 
household assets. Employer-sponsored pensions offer less protection to 
working Americans. Many persons have reduced or stopped contributions 
to their retirement funds, and some, facing financial exigencies, are 
making premature withdrawals from their retirement funds (Brown, 2009). 
Historically low interest rates have resulted in lower than expected 
returns on 401Ks and IRAs. The key points to keep in mind are that:

     By far, Social Security is the most important source of 
income for today's old.
     While today's seniors are more comfortable than older 
populations of the past, their household incomes are typically modest, 
and many remain at financial risk.
     There is a great deal of diversity of economic 
circumstances among older populations, both at any one point in time, 
and as they age.
     The recession is placing the financial security of today's 
old and persons nearing traditional retirement ages at increasing risk.

    The only pension protection available to 6 out of 10 working 
persons in the private sector, Social Security is the foundation of the 
Nation's retirement income system. Social Security is the largest 
single source of income for the overwhelming majority of retirees (see 
Figure 1).



    Social Security is the heart of the Nation's retirement income 
system. More than 75 percent of the income going to aged (65 and over) 
households in the bottom 60 percent of the income distribution--
households with less than $31,300--comes from Social Security. Only for 
those in the highest 20 percent of the elderly income distribution 
(with incomes above $55,890), do occupation pension and assets income 
equal or, as with earnings, eclipse Social Security in terms of their 
aggregate contribution to household income. Occupational pensions make 
significant contributions to the aggregate incomes going to households 
in the three highest quintiles. Assets income and earnings are not 
unimportant but with the exception of the highest quintile fall short 
of Social Security. While not unimportant, the aggregate contribution 
of cash welfare benefits (8.4 percent) to the 5.3 million aged units 
with less than $10,399 in 1998 is substantially less than that of 
Social Security (82.1 percent).
    The economic status of today's older Americans is greatly improved 
from the days when the Poor House loomed as a major fear of the old. 
The median income of elderly households was $31,408 in 2010, compared 
to $56,575 for households 55 to 64 and $62,485 to those 45 to 54. In 
terms of elder poverty--defined as individuals aged 65 and over with 
less than $13,180 and couples with less than $14,953 in 2010--3.5 
million persons (9 percent) are defined as poor (Census Bureau, 2011). 
This is because, as a report recently issued by the Institute for 
Women's Research notes, Social Security lifts nearly half of elderly 
persons above the poverty line--14 million in 2009. One-third of women 
ages 65-74 are raised above poverty by Social Security, one half of 
women 75 years and older (Hartmann, Hayes and Drago, 2011).
    That the standard of living for elderly households has improved 
over the past 50 years does not mean that the living standard of the 
old is excessive or that most older persons are without significant 
financial risk. Especially as they age, develop health problems or lose 
a spouse, even those in the upper 20 percent of the elderly income 
distribution (more than $55,890), can deplete their savings quickly and 
become vulnerable. Indeed, on average, Social Security income becomes 
significantly more important as a share of household income as 
individuals and couples get older (see figure 3).



    Two other recent reports highlight the economic diversity of older 
persons as well as the economic diversity across race and Hispanic 
ethnicity. When poverty data for the old is disaggregated, it shows 
substantially higher poverty rates among unmarried elders, women and 
persons of color. For example, 6.8 percent of white alone, non-Hispanic 
elders have below-poverty incomes in 2010, compared to 18.0 percent of 
African-American elders, alone and 14.0 percent of Asian alone elders, 
and 18.0 percent of Hispanic elderly persons of all races (Census 
Bureau 2011). Furthermore, people of color are less likely to work for 
employers with occupational pension coverage, and thus rely more 
heavily on Social Security than white Americans (Commission to 
Modernize Social Security 2011).
    The employment and retirement income prospects of those nearing 
retirement, already worrisome before the recession, are more so today. 
Utilizing its National Retirement Index, a 2008 report from the 
Retirement Research Center at Boston College estimates that ``even if 
households work to age 65 and annuitize all their financial assets, 
including the receipts from reverse mortgages on their homes, 44 
percent will be ``at risk'' of being unable to maintain their standard 
of living in retirement.'' That number rises to 61 percent when the 
anticipated out-of-pocket costs for health and long term care are 
factored into the assessment (Munnell, Muldoon and Sass, 2009).
    While the labor force participation rates of persons 55 and over 
have increased modestly in recent years and their unemployment rates 
remain lower than younger workers, ``recent BLS data indicate that the 
average period of unemployment for job seekers aged 55 and over was 
40.6 weeks, compared to 31.6 weeks for younger job seekers.'' Also, 
``more than half of older job seekers (53.5 percent) have been out of 
work for 27 weeks or longer, relative to 41.5 percent of younger job 
seekers'' (Heidkamp, Corre, Van Horn 2010).

              HISTORY OF BI-PARTISAN SUPPORT FOR THE COLA

    President Richard Nixon signed the COLA into law on July 1, 1972 as 
a rider to a debt-extension bill. The rider was proposed by Democratic 
Senator Frank Church and supported by the overwhelming majority of 
Democratic and Republican members of the House and Senate. Signing the 
bill, the President greeted with special favor:

        the automatic increase provision which will allow social 
        security benefits to keep pace with the cost of living. This 
        provision is one which I have long urged, and I am pleased that 
        the Congress has at last fulfilled a request which I have been 
        making since the first months of my Administration. This action 
        constitutes a major break-through for older Americans, for it 
        says at last that inflation-proof social security benefits are 
        theirs as a matter of right, and not as something which must be 
        temporarily won over and over again from each succeeding 
        Congress (Social Security Administration).

    When the COLA was enacted, the Bureau of Labor Statistics (BLS) 
only had one measure of inflation, what we now call the CPI-W, or the 
Consumer Price Index for Urban Wage Earners and Clerical Workers, 
measuring the inflation experienced by 32 percent of the population, 
still used to index Social Security benefits. Today, by law, a ``COLA 
is effective for December of the current year [and] equal to the 
percentage increase (if any) in the average CPI-W for the third quarter 
of the current year over the average for the third quarter of the last 
year in which a COLA became effective'' (Social Security 
Administration, 2011).
    In 1978, BLS added the CPI-U, covering about 87 percent of the 
population including retirees, and which, today, is used to index 
income tax brackets. As part of the 1987 Amendments to the Older 
Americans Act, Congress mandated the BLS to develop an ``experimental'' 
index using a market basket of goods and services which more closely 
tracks the spending of the population ages 62 and over--the CPI for 
Elderly Consumers, or, CPI-E. The growth of the various CPI indices was 
slowed in 1999 by a technical change that took into effect the tendency 
of consumers to substitute within categories when for instance to buy 
fewer Macintosh apples and more delicious apples when Macintosh apples 
become more expensive relative to delicious apples (Veghte et al., 
2011). In 1999 the BLS also established an alternative ``chained-CPI-
U'' to take into account how Americans change their spending when they 
make substitutions across dissimilar categories of goods and services, 
to account for the tendency to substitute less expensive, for more 
expensive, goods when prices, for example to take vacations by 
automobile when the cost of airline flights go up (Strengthen Social 
Security Campaign, 2011).
    The last Social Security COLA was 5.8 percent for 2009, primarily 
reflecting the spike in oil prices that took place during the 2008 
summer. Following that spike, oil and other prices dropped, and so 
there has been no COLA for the past 2 years, 2010 and 2011, because the 
average third quarter CPI-W in 2009 and 2010 did not exceed the 2008 
average third quarter CPI-W.
    Because oil and other prices have once again begun to rise, this 
week Social Security is expected to announce the COLA for 2012, 
thoughts to be in the neighborhood of 3.2 to 3.6 percent.
    Because it would make little sense to have a national retirement, 
disability and survivor pension that results in beneficiaries losing 
purchasing power the longer they live, the COLA is a critical source of 
protection for today's beneficiaries, a provision that is valued by the 
public and which receives much support across party lines.

                  WHY THE CURRENT CPI SHORTS RETIREES

    The use of the CPI-W to determine the Social Security COLA seems 
far more likely to understate than overstate the impact of inflation on 
elderly (Bivens, 2011; Vegne et al., 2011; Goda et al., 2011) and by 
extension also on persons with disabilities. One study of people born 
in 1918 shows that, net of out-of-pocket medical expenses, the average 
man who retired at age 65 in 1983 and survived to 2007, has seen the 
value of his Social Security benefit drop by 20 percent, 27 percent for 
the average woman (Goda et al., 2011). The existing COLA understates 
inflation because:

     The current Social Security automatic COLA, which is based 
on the CPI-W, simply does not account for the disproportionate impact 
of health expenditure for households of retirees and persons with 
disabilities. In 2009, households with disabled and elderly Medicare 
beneficiaries spent almost 15 percent of their budgets out-of-pocket 
for health care, roughly three times as much as non-Medicare Households 
(Kaiser Family Foundation, 2011). ``Health care costs have been rising 
faster than prices for other goods and services for over three 
decades--5.5 percent per year on average, compared to 3.1 percent for 
non-medical costs'' (BLS, 2011 as referenced in SSSC, 2011). Not 
surprisingly, health care costs increase with age.
     Health care expenditures increase as people age, often 
greatly diminishing disposable income in very old age. Thus, even if 
the annual COLA more accurately measured the impact of health care on 
all the old, there would still be the problem of disproportionate 
impact on the very old.
     Medicare Part B and Part D premiums are growing, relative 
to the Social Security benefits of elderly and disabled beneficiaries, 
except for low-
income beneficiaries who are not required to pay these premiums. These 
premiums are increasing well in excess of Social Security's COLAs, 
especially so for higher income beneficiaries. Higher income 
beneficiaries--individuals with $85,000 and couples with $170,000 of 
income in 2010) must pay income conditioned Part B premiums ($154.70 to 
$353.50 per month in 2010) and 35 to 80 percent of the cost of Part D. 
Because these thresholds are not adjusted for inflation from 2010 to 
2019, increasing numbers will be paying larger premiums (Kaiser Health 
Foundation, 2011). Bottom line, even with an accurate COLA measure, 
when Medicare premiums are taken into account, the purchasing power of 
Social Security benefits of seniors and persons with disabilities would 
not maintain their purchasing power.

          WHY THE CHAINED-CPI DOESN'T PASS THE ``SMELL TEST''

    Switching to the chained-CPI has emerged as a proposal in the 
context of Federal deficit reduction talks, especially those now taking 
place under the jurisdiction of ``Super Committee'' established under 
the Budget Control Act of 2011. Proponents argue that it represents a 
more accurate way of measuring the impact of inflation on older 
populations. This assertion simply does not pass the ``smell text:''

     As discussed, the weight of evidence strongly suggests the 
existing COLA understates inflation, eroding the purchasing power of 
Social Security benefits for retirees, survivors and persons with 
disabilities.
     The chained-CPI would make the current situation still 
worse. Substantial benefit losses would be sustained, especially as 
people receive benefits over many years (see figures 1 and 4).



     Shrouded in technical language suggesting greater 
accuracy, the proposal to switch to the chained-CPI is best understood 
as a ``stealth-like'' attempt to implement benefit cuts in Social 
Security and other similarly indexed programs.
     Enactment of the chained-CPI would violate promises made 
to hold harmless current beneficiaries and persons 55 and over who are 
nearing retirement. Current beneficiaries would be effected, regardless 
of whether it was implemented in 2011 or 2021.
    Yet another problem, the chained-CPI assumes that households can 
lesson the impact of inflation by changing their spending patterns. But 
seniors, with a larger proportion of their budgets devoted to 
necessities do not have the same flexibility as younger persons (see 
figure 5):



  WHY THE CPI-E DOES A BETTER JOB OF MEASURING INFLATION FOR RETIREES

    Recognizing that the expenditures of elderly households differ from 
those of the general population, as part of the 1987 Amendments to the 
Older Americans Act, Congress directed the BLS to develop an index 
designed to more accurately reflect the impact of inflation on seniors. 
As noted, BLS complied by developing the CPI-E, making a new series of 
inflation data available projected back to 1982. From 1983 to 2007, the 
CPI-E has grown faster relative to the CPI-W, to 126.5 percent while 
the CPI-W rose to just 110 percent (Stewart, 2008).
    While the chained-CPI would reduce COLA adjustments, on average, by 
a roughly 0.3 percentage points the CPI-E would, on average, increase 
benefits by roughly 0.2 percentage points, a difference of $953 (in 
2011 dollars) at age 75, $1,688 at age 85, and $2,391 at age 95.

                              CONCLUSIONS

    In terms of measuring the impact of inflation on older households 
and on persons with disabilities, the public would be well-served if 
Congress and the President focused on funding the development and 
further testing of price indices that more closely track the spending 
of households with elders and persons with disabilities.
    Unquestionably, switching to the chained-CPI is ill-advised. Doing 
so would, over the next 10 years, take an estimated $112 billion 
directly out of the pockets of Social Security beneficiaries. It would 
also cut Veterans Compensation and Pension benefits, Federal pensions 
and other Federal programs with COLAs--taking an additional $24 billion 
out of the pockets of veterans and $9 billion from other persons 
receiving Federal benefits (Reno, Bethell, and Walker, 2011).
    The implications of the chained-CPI are especially problematic for 
the most financially vulnerable aged and disabled who receive 
Supplemental Security Income (SSI) benefits. Because the annual 
adjustment to the Federal SSI guarantee (currently $674 a month) is 
indexed to the CPI-W, both before and after receipt of SSI benefits, 
substituting the chained-CPI would result in benefit reductions every 
year prior to when they apply for benefits, and again, every year after 
they begin receiving benefits--a double hit on the most economically 
vulnerable.
    Whether implemented in 2011 or 2021, the chained-CPI would violate 
promises made by Members of Congress and the President that no changes 
will be made to Social Security that affect the benefits of persons 
ages 55 and over. It's bad policy and bad public relations because 
Social Security is a promise Americans expect their government to keep. 
This is true across virtually all demographic groups--young, middle 
aged and old, union and tea-party identified households--and across the 
political spectrum--Democrats, Independents and Republicans. Large 
majorities (ranging between roughly 70 and 80 percent) of each groups 
say, over and over again, do not cut their Social Security (see, for 
example, National Committee to Preserve Social Security and Medicare, 
September 2011). Americans are not easily deceived. They know a cut 
when they see one, and if the chained-CPI is implemented, tens of 
millions of Americans will understand that their government has let 
them down.

                               References

    Amble and Stewart, ``Experimental Price Index for Elderly 
Consumers,'' Monthly Labor Review, May 1994, p. 11-16. http://
www.bls.gov/opub/mlr/2008/04/art2
full.pdf.
    Bivens, Economic Policy Institute, ``A Protection, Not A Windfall: 
Proposed Changes to Social Security COLA Would Further Erode Retirees' 
Financial Security,'' July 2011. http://w3.epi-data.org/temp2011/
BriefingPaper320.pdf.
    Commission to Modernize Social Security, ``Plan For a New Future: 
The Impact of Social Security Reform on People of Color,'' October 
2011. http://www.insight
cced.org/New_Future_Social_Security_Commission_Report_Final.pdf.
    Congressional Budget Office, ``Key Issues in Analyzing Major Health 
Insurance Proposals,'' December 2008. http://www.cbo.gov/ftpdocs/99xx/
doc9924/12-18-Key
Issues.pdf.
    Gecan and Kingson, ``The COLA Conundrum: Social Security payment 
doesn't really reflect inflation,'' New York Daily News, June 22, 2011. 
http://articles.nydailynews.com/2011-06-22/news/29707015_1_social-
security-shortchanges-seniors-senior-households.
    Goda, Shoven, and Slavov, ``How Well are Social Security Recipients 
Protected from Inflation?'' National Tax Journal, Vol. 64(2), p. 429-
50. http://www.nasi.org/sites/default/files/research/
SS%20Fact%20Sheet%20No.02_Should%20Social%20
Security%27s%20Cost-of-%20Living%20Adjustment%20Be%20Changed.pdf.
    Hartmann, Hayes, and Drago. Institute for Women's Policy Research. 
``Social Security Especially Vital to Women and People of Color, Men 
Increasingly Reliant,'' January 2011. http://www.iwpr.org/publications/
pubs/social-security-especially-vital-to-women-and-people-of-color-men-
increasingly reliant.
    Heidkamp, Corre, and Van Horn. Sloan Center on Aging and Work at 
Boston College. ``The New `Unemployables': Older Job Seekers Struggle 
to Find Work During the Great Recession,'' November 2010. http://
www.bc.edu/content/dam/files/research_sites/agingandwork/pdf/
publications/IB25_NewUnemployed.pdf.
    Munnell and Hisey. Center for Retirement Research at Boston 
College. ``Implications of a `Chained-CPI','' September 2011. http://
crr.bc.edu/images/stories/Briefs/IB_11-12_508.pdf.
    Munnell, Muldoon, and Sass. Center for Retirement Research at 
Boston College. ``Recessions and Older Workers,'' January 2009. http://
crr.bc.edu/images/stories/Briefs/ib_9-2.pdf.
    National Committee to Preserve Social Security and Medicare, 
``Medicare, Social Security, and the Deficit: Findings from a National 
Survey of Likely 2012 Voters,'' September 2011. http://www.ncpssm.org/
pdf/poll.pdf.
    Reno, Bethell, and Walker. National Academy of Social Insurance, 
``How Would Shifting to a Chained-CPI Affect the Federal Budget?'' June 
2011. http://www.nasi
.org/sites/default/files/research/
SS_Fact_Sheet_03_Shifting_to_a_Chained
_CPI.pdf.
    Social Security Administration, Office of the Chief Actuary, Letter 
to Rep. Xavier Becerra, June 21, 2011. http://ssa.gov/oact/solvency/
XBecerra_20110621.pdf.
    Social Security Administration, Office of the Chief Actuary, Letter 
to Senator Bernie Sanders, September 7, 2011. http://ssa.gov/oact/
solvency/BSanders_20110907
.pdf.
    Social Security Administration, President Nixon's Statement on 
Signing the Social Security Amendments of 1972. http://www.ssa.gov/
history/nixstmts.html#1972.
    Stewart, Kenneth J, ``The Experimental Consumer Price Index for 
Elderly Americans (CPI-E): 1982-2007,'' Monthly Labor Review, April 
2008, p. 19-24. http://www.bls.gov/opub/mlr/2008/04/art2full.pdf.
    Strengthen Social Security Campaign, ``Social Security COLA Cut: A 
Benefit Cut Affecting Everyone,'' 2011. http://socialsecurity-
works.org/wp-content/uploads/2011/07/CPI-fact-sheet-with-graphs-7-25-
11-FINAL.pdf.
    U.S. Census Bureau, 2010. ``Income, Poverty, and Health Insurance 
Coverage in the United States: 2010,'' September 2011. http://
www.census.gov/prod/2011pubs/p60-239.pdf.
    Veghte, Reno, Bethell, and Walker, National Academy of Social 
Insurance, ``Should Social Security's Cost-of-Living-Adjustment Be 
Changed?'' April 2011, http://www.nasi.org/sites/default/files/
research/SS%20Fact%20Sheet%20No.02_
Should%20Social%20Security%27s%20Cost-of-%20Living%20Adjustment%20Be%20
Changed.pdf.

             Appendix A--Hypothetical Case of Jane Smith

    Jane Smith turned 65 on January 1, 2011. She's healthy and looking 
forward to continuing her work on a part-time basis and to pursuing her 
life-long avocation as an amateur painter. She also plans to expand her 
volunteer service through her church. All things being equal, she will 
live another 20 years, very possibly longer.
    Always careful with her money, she rents a modest one bedroom 
apartment that she shares with her dog and cat. She has $70,000 in her 
company 401(k) and another $40,000 in other assets (savings, bonds and 
stocks). Wanting the peace of mind that comes with knowing she has an 
assured stream of income, she buys a $70,000 single life income annuity 
(no payment to beneficiaries), guaranteeing that she will receive 
$4,670 a year, no matter how long she lives. Her assets spin off 
another $1,000 in 2011. She works part-time, anticipating about $12,000 
a year in earnings. She starts receiving Social Security benefits on 
January 1, 2011, which will pay out $15,132 in 2011. This brings her 
first year income to $32,802, enough for her to live comfortably and to 
put her among the top 25 percent of households headed by unmarried 
persons 65 and over.
    Things go along well for the first 10 years and during most of 
those years she is able to add a few dollars to her savings, bringing 
the value of her assets up to $45,000. But little by little as 
inflation diminishes the purchasing power of her annuity, her household 
budget tightens. Part-time work is becoming more difficult, causing her 
to cut back on her hours, and, then to stop working all together when 
she has a hip replacement at age 78. Her medical expenses are 
increasing. Still independent at age 85, she now needs to employ 
someone several hours a week to assist with heavy household chores and 
she has to dip into her other savings. After 20 years, inflation has 
nearly halved the value of her annuity payments. Her budget is now very 
tight. Five more years pass. She never expected to be 90, but it's 
happened. She is only 4 years older than the average life expectancy 
for her cohorts who reach 65.

 Appendix B--Social Security Works/Strengthen Social Security Campaign 
 Fact Sheet Social Security COLA Cut: A Benefit Cut Affecting Everyone
             Strengthen Social Security . . . don't cut it

       SOCIAL SECURITY COLA CUT: A BENEFIT CUT AFFECTING EVERYONE

    Some politicians in Washington are preparing to cut your Social 
Security COLA for good - even after two years without a cost of living 
adjustment. This COLA cut has an obscure name - the chained CPI--but it 
would do real damage by changing the formula used to calculate the 
COLA. The important thing to know is that this change would cut the 
benefits of all beneficiaries, including current retirees, disabled 
workers, and others--even after politicians promised repeatedly that 
any changes to Social Security would not affect current beneficiaries. 
The COLA cut is a real threat to the financial security of every 
American who does currently or will rely on Social Security.



    The Congressional Budget Office (CBO) estimates that switching to 
the chained CPI could save the government $340 billion over ten years 
by reducing Social Security, veterans and other benefits, and by 
increasing revenues. More than half of this amount--$127 billion--would 
come from Social Security alone.\1\ The chained CPI will cut $1.6 
trillion over Social Security's 75-year valuation period--mainly from 
the oldest of the old, who are primarily women and disproportionately 
poor.\2\
---------------------------------------------------------------------------
    \1\ Congressional Budget Office, ``Preliminary Estimate of the 
Budgetary Effects of Using the Chained CPI for Mandatory Programs and 
the Tax Code Starting in 2014,'' March 2013. http://www.cbo.gov/sites/
default/files/cbofiles/attachments/Government-wide_chained_CPI 
_estimate-2014_effective.pdf.
    \2\ Social Security Administration (SSA) Chief Actuary, private 
correspondence with Nancy Altman, Co-Chair,
---------------------------------------------------------------------------
    These earned benefits would be taken directly from beneficiaries, 
as Figures 1 and 2 show. The average earner retiring at age 65 would 
get a $658 cut each year at age 75, and a $1,147 cut by age 85. By age 
95, when Social Security benefits are typically needed most, that 
person faces a staggering 9.2 percent cut (Figure 1).\3\ What is far 
more severe is the cumulative effect of the COLA cut as it compounds 
over time. The average earner retiring at age 65 would get a cumulative 
cut of $4,642 at age 75, $13,921 at age 85, and $28,015 at age 95 
(Figure 2).\4\
---------------------------------------------------------------------------
    \3\ These calculations assume the chained CPI has been in effect 
for 3 years. Percent benefit reduction under chained CPI from SSA Chief 
Actuary, ``Effects on Social Security Financial Status and on Benefit 
Levels of Two Potential Modifications to the Automatic Annual Cost of 
Living Adjustment (COLA) Requested by Representative Xavier Becerra,'' 
June 21, 2011, http://ssa.gov/oact/solvency/XBecerra 20110621.pdf. 
Projected wage-indexed benefits for a worker with average earnings 
claiming benefits at age 65 from SSA, Table 2.A26, Annual Statistical 
Supplement, 2012, 2012, http://www.ssa.gov/policy/docs/statcomps/
supplement/2012/2a20-2a28 .html#table2.a26.
    \4\ See endnote 3. Cumulative benefit reductions calculated by 
adding up annual dollar reductions over span of a beneficiary's 
retirement.



    The COLA cuts are real and get deeper every year, so they have the 
biggest impact when Social Security benefits are needed the most, 
usually in old age when other sources of income have been used up. As 
Figure 3 shows, the amount lost annually at age 85 is more than the 
amount of money a senior would spend on food in five months.\5\
---------------------------------------------------------------------------
    \5\ 5 United States Department of Agriculture (USDA), ``Official 
USDA Plans: Cost of Food at Home at Four Levels, U.S. Average, 
September 2012,'' October 2012. Food costs estimated at $47.85/week, an 
average of costs for women and men age 71+ on the low-cost plan. http:/
/www.cnpp.usda.gov/Publications/FoodPlans/2012/CostofFoodDec2012.pdf.



    We need a higher COLA, not a lower one. The current COLA formula 
does not take into account the greater proportion of income that 
seniors and people with disabilities spend on health care. Adopting the 
chained CPI would make matters even worse. Instead, Social Security 
should use a formula that takes account of these differences called the 
CPl-E, the experimental CPI for the elderly. With improvements in its 
sample size, it would offer the most accurate measure of the cost of 
living of the elderly.
    As Figure 4 shows, the CPl-E rises at a slightly faster rate than 
the current formula (CPl-W), and at a much faster rate than the chained 
CPI. Compared with the CPl-E, the chained CPI registers even bigger 
losses over time--$2,791 a year by age 95.\6\ Switching to the CPl-E is 
a much more accurate way to measure the Social Security COLA without 
cutting current benefit levels.
---------------------------------------------------------------------------
    \6\ These calculations assume the chained CPI and CPl-E have been 
in effect for 3 years. Percent benefit increase under CPl-E and benefit 
reduction under chained CPI from SSA Chief Actuary, ``Effects on Social 
Security Financial Status and on Benefit Levels of Two Potential 
Modifications to the Automatic Annual Cost of Living Adjustment (COLA) 
Requested by Representative Xavier Becerra,'' June 21, 2011. Projected 
wage-indexed benefits for a worker with average earnings claiming 
benefits at age 65 from SSA, Table 2.A26, Annual Statistical 
Supplement, 2012.




    Senator Sanders. Thank you very much, Dr. Kingson.
    Our second witness is Gail Ruggles. Gail is a Vermont 
resident who lives in a very rural part of northeastern 
Vermont, and what she's going to be talking about are some of 
the struggles that she has had over the years which, I think, 
reflect the struggles that millions of people her age have had, 
and also she is going to talk about the benefits that a Older 
Americans Act program called SCSEP has had in turning her life 
around.
    So, Ms. Ruggles, thanks very much for being with us.

           STATEMENT OF GAIL RUGGLES, LYNDONVILLE, VT

    Ms. Ruggles. Good morning, and thank you for inviting me to 
testify. It's a pretty important issue to me too. My name is 
Gail Ruggles and I am 61 years old. I am currently the 
administrative assistant for Numia Medical Technology, which is 
a growing research and development firm in northeast Vermont.
    For the first time in many, many years, I'm beginning to 
feel economically self-sufficient. Three years ago, not so 
pretty. My life was definitely a different story. I never 
planned to be broke. I never planned to be out of work. I've 
been gainfully employed since I was 16 years old, mostly in 
lower-level jobs.
    When I turned 50 I was divorced. I was raising a fifth and 
seventh grader on my own and I decided I'd like to be a better 
role model for them and do something better with my own life. I 
met with a financial aid rep at Lyndon State College. I went 
back to school. Took me a while but I graduated cum laude with 
a Bachelor's degree in liberal studies. I was 56 years old and 
I was ready to get back into the working world full-time.
    But something weird happened in those 5 years. Somewhere 
along the line, people started looking at me and saying this 
thing called ``at your age.'' It has this dirty gritty feel 
like I was used up, like I was a has-been. I was still me. I 
was worried that going back to school hadn't been such a good 
idea. I was deeper in debt because even though I participated 
in work study I had maxed out my student loans to help pay my 
monthly bills.
    I searched the papers for jobs but when I saw something I 
considered answering I started to think yes, but who'd want me 
at my age. I lost sleep. I turned the thermostat down and we 
were cold.
    We ate cheaper and cheaper food. I told the kids sometimes 
I wasn't hungry so they'd eat enough. I gained weight from poor 
eating. I knew I looked bad. That made me feel bad. My chances 
of getting a job got worse. The worst thing was I felt like I 
was a failure in my kids' eyes.
    Within 6 months of graduating, I was working five part-time 
jobs. I did substitute teaching whenever I was called. I picked 
up books from the town dump and sold them on Half.com. I 
brokered auto parts for a friend on eBay. I did freelance 
writing and I did tax work in tax season.
    I didn't know what else I could do. The slump in the 
economy had hurt me like it hurt so many others. My car was on 
its last legs. I was getting behind in my mortgage, and except 
for a very understanding banker I was afraid of foreclosure.
    In 3 months it would be spring time. Big deal. Then the 
electric company could shut me off for late payment. Once, I 
went to the local food pantry. A prominent lady from my town 
was checking off names and I was so mortified I took my bag of 
groceries, got in my car and cried all the way home and I never 
went back.
    At this point, I was 59\1/2\ years old and I read and re-
read my Social Security earnings statement like it was the Holy 
Grail. All I wanted to do was make it to 62, pick up that 
little chunk of Social Security and combine it with all my five 
other jobs and maybe make ends meet.
    I was afraid of what would happen to my kids if I couldn't 
support them. All I really wanted to do was get them through 
school and I didn't care what happened. I knew I needed help. I 
had no idea where to get it.
    The turning point for me came in January 2009. I went to a 
thrift store to get a winter coat and I told the girl at the 
register that I was looking for work. I made a joke about being 
someone at my age, and she said, how old are you, and I told 
her and she handed me this little brochure from Vermont 
Associates for Training and Development.
    The program sounded too good to be true but I called for an 
appointment anyway. Got to tell you, I don't like public aid 
offices. I don't like having to defend my life's failures in 
exchange for a handout. But the people at Vermont Associates 
were different. They really cared. They really wanted me to 
make a better life for myself.
    They took the time to explain to me the duality of the 
Senior Community Service Employment Program or SCSEP. They 
placed senior workers in paid training positions in 501(c)(3) 
organizations. Personally, I thought that was brilliant--
community people helping each other. I was assigned to train at 
the office of the Clan of the Hawk, a little Native American 
nonprofit group.
    This was a 20-year-old organization run entirely by 
volunteers. I set up their files. I put their finances in 
order. I started to catalog their library and museum holdings, 
and over the next few months the chief of the Clan of the Hawk 
started to call me the Clan secretary.
    I looked around and I thought, hey, I am pretty good at 
this. I told a Vermont Associate supervisor that I'd like to 
learn to write grants to help fund the Clan library. It was 
kind of weird but we worked together to make it happen and I 
took an amazing 2-day grant-writing workshop in Boston. It was 
a key addition to my resume.
    As part of the SCSEP program, Vermont Associates holds 
monthly training and employment meetings. The specialists come 
to these meetings to teach us to rewrite our resume for today's 
employers, a really new skill. They taught us interviewing 
skills, how to create a portfolio.
    At one meeting, we were asked to make a list of skills that 
we had and I found out I can do a lot of things from sewing on 
a button to cleaning a septic tank. I realized I had a lot of 
skills though that could be used in a real job situation.
    In early November I was helping a friend deal with a tax 
issue that he'd incurred and I met him once a week where he 
worked. One day, his boss let us use his office while he was 
out to lunch. I looked around and I saw stacks of mail and 
piles of folders and papers everywhere and I thought, boy, this 
guy could use me. With my training through SCSEP, I was 
confident that I knew how to take care of an office. After all, 
I'd been doing it for 8 months.
    So I gathered my courage and asked for an interview with 
the owner of Numia. He did know he needed extra help but he 
wasn't really convinced he needed to hire a new staff employee. 
But I had an ace up my sleeve called OJE. It's a SCSEP-employer 
incentive program and stands for on-the-job experience.
    As it turned out, the combination of skills I had honed 
during my training and the OJE incentive together landed my 
job. Of course, it was up to me to keep it. But that was 
December 2009. It's October 2011. I got a raise in January. I 
have insurance benefits. I have vacation time and I'm investing 
in a 401K.
    Being a participant in SCSEP through Vermont Associates 
gave me things welfare programs never could--gave me 
occupational skills and special training to obtain real lasting 
employment. It gave me confidence in my abilities, ultimately 
gave me the stepping stones to become economically self-
sufficient.
    I'm not even thinking about collecting Social Security at 
62 because I don't have to. I'm actually building a stronger 
retirement. Vermont and SCSEP helped me turn my life around. 
It's a program that works.
    Thank you.
    [The prepared statement of Ms. Ruggles follows:]

                   Prepared Statement of Gail Ruggles

                              INTRODUCTION

    I am Gail Ruggles and I am 61 years old. I am currently the 
administrative assistant for Numia Medical technology, a growing firm 
in Lyndonville, VT. I am earning a fairly nice wage and for the first 
time in several years, I can pay most of my bills on time--I am 
economically self sufficient. Every morning I wake up and pinch myself 
to be sure it is still true. I am working in a high growth industry and 
having success!
    But before I discuss my current life situation, let me share some 
of my past life experiences.

                              THE PROBLEM

A Little Background
    I have been gainfully employed since I was 16 years old. I even 
managed to work at home through all four of my pregnancies, and found 
bosses back then willing to let me bring my nursing infants to work 
with me! I am the second of seven children and we were taught early on 
a respect for honest work. My parents never took hand outs. When I was 
50 years old my youngest son and daughter were in fifth and seventh 
grades. I took a giant leap of faith and went back to school and 
finished the degree I had started in my twenties. I was proud of my 
accomplishment. I graduated Cum Laude with a Bachelor's degree in 
Liberal Studies. I was ready to start a new chapter. I was 56 years 
old. I wanted to get back in the working world.
TDSS or What I Now Refer to as The Downward Senior Spiral
    And then it began. Somehow along the way, people started using the 
phrase ``at your age.'' It had a kind of dirty feel to it; like I was 
used up, a ``has-been.'' I began to worry, doubting that going back to 
school had been a good idea. I felt that maybe I should have just 
continued working, doing anything from bindery work in a print shop to 
waiting tables. I was heavily in debt because even though I had 
participated in work-study and kept most of my part-time endeavors 
going while I was in school, I had maxed out my student loans to help 
pay my monthly bills. I searched the papers for jobs that I felt would 
bring me out of the financial hole I had dug. I thought there must be 
something I could do that was commensurate with my abilities and 
education. But when I read an ad I thought I might answer, I thought, 
``Who would want me, `at my age.' Employers want younger, more 
ambitious applicants, or people with more experience in the field.''
    The worry caused loss of sleep. The financial stresses caused poor 
eating habits and personal care. I lowered the heat to uncomfortable 
levels, ate cheaper and cheaper food. I told the kids I wasn't hungry 
sometimes so they would have enough. You may not want to hear this, but 
if I found bugs in the rice or pasta, I picked them out and cooked it 
anyway. I cutoff ``the bad parts'' of marked down produce. The downward 
spiral had little hope in it. I gained weight, felt awful and felt like 
a failure as a person and a mother. What kind of a role model was I for 
my high-schoolers? What hope did I have to offer them?
    I was working five part time jobs:

    1. Substitute teaching whenever I was asked.
    2. Picked books from the town dump and sold them on half.com
    3. Brokered auto parts for a friend on eBay. I was always scouring 
the house for things I could sell on Craig's list or eBay.
    4. Freelance writing.
    5. Part-time bookkeeping and tax work for friends.

    The recession had hit me hard. I was struggling and in dire 
straights. My car was on its last legs. In addition, I wasn't sure 
where the next month's payment would come from and I feared I'd lose my 
house. My mortgage company had allowed me to pay only the interest on 
my monthly payment and add the payment to the end of the loan. As well, 
I was dreading the warmth of spring because it would mean that the 
electric company could legally shut me off for late payment. I was 
getting food stamps and some fuel assistance. Once, I swallowed my 
pride and went to the local food pantry, and a well-known lady from my 
town was checking in participants. She was very gracious and 
``understanding'' which made it all the worse. I was mortified and 
cried all the way home. I never did it again.
    Bottom line: My financial situation was awful; no matter how hard I 
tried on my own, I couldn't make ends meet. I was frustrated and knew I 
needed help.
    At 59\1/2\ years old, I was reading and re-reading my Social 
Security Statement of Earnings like it was the Holy Grail. I kept 
adding the numbers and I was wondering if I could somehow just make it 
until I could claim early ``retirement'' (i.e. Social Security). And I 
would not quit working! My expected social security at that point would 
never be enough to support me in even the most austere circumstances. 
But, if I could somehow manage to make ends meet until then, combining 
my SS earnings with all the other stuff I was doing, then maybe I would 
be OK. I would of course have no fear of losing my benefits because I 
would not earn more than $14,000 a year with my meager work. But, I 
knew I would have to continue working till the day I died, and I was 
afraid that I might not be able to do that.

                              THE SOLUTION

    In early January 2009, I sat down and added the December bills and 
December's income and the figures were definitely against me. I decided 
to go look for a maid's job in one of the hotels. But before I could 
even apply for this kind of work I had to get a better coat. Mine was 
pretty funky; it was washed out, zipper broken and cuffs frayed. I went 
to a local thrift store to get another.
    As I stood in the check-out line at the thrift store, I mentioned 
to the girl at the counter that I was hoping the coat would bring me 
luck because I was looking for work. I made a wry joke about being a 
person ``of my age.'' She handed me a little brochure from Vermont 
Associates for Training and Development, Inc. At first I thought it 
might be a telemarketing scam or something, but I figured, if it was 
legal and they would train and pay me, I would do it. I took it home, 
read it thoroughly and actually without much expectation, I called for 
an appointment.

The Turning Point--January 2009
    I really don't like public aid offices, the staring, the plastic 
chairs, the guarded looks from the interviewers, and the sense of 
having to defend myself and my life's failings and ask for a handout. 
But the office of Vermont Associates was a different kind of aid 
station. Quiet and subtly furnished, it was like the office of a small 
corporation. There weren't 15 people with the same appointment, just 
me!
    I met with Vermont Associates staff and they made me feel 
comfortable, worthy and welcome. I quickly realized that I was in an 
office of people who truly cared and really wanted me to make a better 
life for myself. They told me of the Senior Community Service 
Employment Program (SCSEP) and its dual mission of providing a 
community service to non-profits and job training to low-income, 
unemployed individuals who were 55 years old or older. I thought this 
was great. People helping people in the community was something I was 
all for.
    They explained that they were not a ``hand out'' but a ``hand up.'' 
Through the SCSEP, they could provide me with training that would 
enable me to be competitive in today's job market. As a participant in 
the program, I would earn minimum wage. It wasn't much, but at least I 
would have a steady, dependable source of income while I learned what I 
would need to find a new job. I left that first meeting at Vermont 
Associates with renewed hope that I would find a way out of my 
predicament and once again be a provider for my family and be able to 
hold my head up in my community.
    The Vermont Associates staff helped me through the paperwork--which 
was really not that complicated--and soon through the SCSEP program I 
was assigned to a local Native American non-profit group, training in 
their office. At the time, the Clan of the Hawk (my host agency 
training site) was a 20-year old organization, run entirely by 
volunteers. They had over 2,000 manila folders all marked ``powwow'' or 
``clan.'' I had a blast. I set up files, made scrapbooks, put their 
finances in order and started to catalog their growing library and 
museum holdings. I was learning to take an organizational initiative. 
Often I would chat with my supervisor at Vermont Associates about 
office procedure, and she encouraged me to be resourceful and not be 
afraid to make decisions. I read about meeting procedures and created a 
corporation records book that would satisfy State and Federal 
regulations. I read about codifying museum holdings, how to photograph 
individual museum items, tag and number them. I made a photographic and 
data recording of all items they had. I learned more computer skills 
and when I had a question or got stuck on the computer, the staff at 
Vermont Associates steered me to people who had answers. Over the next 
few months the Chief began to refer to me as ``the Clan Secretary.'' I 
had a TITLE, and a wee bit of self-esteem started to seep back in.

                   SPECIALIZED TRAINING OPPORTUNITIES

    As time passed, I shared with Vermont Associates staff that what 
the Clan of the Hawk really needed was grant money to help their 
library and museum grow. They asked me what I wanted to do about it. I 
said, ``I want to learn to write grants.'' They said lets work together 
to see if we can make it happen. I spent a month online reading about 
grant writing courses and finally settled on the one I thought was 
best. The problem was--it was a 2-day course in Boston. Vermont 
Associates could not pay the expenses. But the staff connected me with 
the Women's Club of Vermont. I applied for their scholarship, won it 
and took an amazing 2-day grant workshop in Boston. Since then, I have 
successfully processed a trail's grant for The Clan of the Hawk. My 
workshop completion certificate was also a great addition to what would 
eventually be my new resume. Without the SCSEP, I would never have had 
this opportunity to learn this new skill. It felt good to say, ``I know 
how to do this and do it well.'' What I didn't know then, this newly 
learned skill would ultimately help me land a new job!

                         JOB SKILLS PREPARATION

    As a standard part of the SCSEP program, Vermont Associates holds 
mandatory monthly Training and Employment meetings, which at first I 
thought would be boring and superfluous. I saw no reason to break up my 
day by coming to 11 o'clock meetings to listen to people tell me how to 
do things I had been doing all my life. Yet, I soon realized my resume 
was as old as I was, my interviewing skills were rusty, and my self-
confidence was near zero. I had no idea what ``networking'' was.
    As it turned out, these meetings were a monthly mental shot in the 
arm. I was amazed at the ``tank of skills and knowledge'' that gathered 
in that room. At first I thought I was the only one who had NO skills 
in that group. But at one meeting, we were instructed to make lists of 
skills that we had--every thing from sewing on a button to cleaning a 
septic tank. I was astounded to see what a long list I could write. I 
realized I had a myriad of skills that could be put to good use in many 
job situations. Hmm--I started to think I was not quite so worthless. I 
was also encouraged when others in the Vermont Associates program 
graduated into the real job world and came back to one of the monthly 
meetings to share their success stories. I realized there was more to 
strive for--even ``AT MY AGE.''
    Also, many specialists came to these meetings to help us prepare to 
re-enter the job market. One speaker taught us to rewrite our resume in 
a format expected by today's business owners. Another taught us 
interviewing skills, what to and what not to say, how to handle a tough 
interview question, and when we could legally say no to a question. 
Still another helped us create a portfolio, something few of us had 
ever done or knew we should do. As the labor market had changed 
drastically, these sessions caught us up with the new trends. At every 
meeting a member of the labor board was there to share new job openings 
and the staff at Vermont Associates was quick to suggest a likely 
placement for one of the participants. They taught us to expect initial 
skepticism if we were hired, but to persevere and show our employers 
just how valuable an asset an ``older'' worker can be! The services 
offered by the SCSEP seemed never ending as each meeting brought 
something new to prepare us for re-entering the workforce.
    Meantime, my work at the Clan was progressing. I used all my 
computer skills and then some to create newsletters, small booklets and 
pamphlets, and spreadsheets for their finances. I realized as I looked 
around me that I was pretty good at putting an office in order that had 
started in relative shambles.

                         TRANSITIONING TO A JOB

    I was helping a friend deal with a tax issue that he had incurred. 
I met him at the place where he worked. One day his boss was out for 
the day and we used his boss's office for privacy. I looked around and 
saw stacks of mail, folders and papers in general, and thought--they 
really could use someone like me. It was obvious the owner did not have 
a secretary. With my training through the SCSEP, I was assured that I 
knew how to take care of an office now. After all, I had been doing it 
for over 8 months at my SCSEP training placement.
    BVA, (or Before Vermont Associates), I would have gone home and 
felt sorry for myself and thought, ``Gee, it would have been nice to 
work there.'' And that would have been the end of it, but I remembered 
some of the discussions we had at those ``boring'' Training and 
Employment meetings.

     You have to ``put yourself out there.''
     You have to tell an employer why he or she needs you; an 
experienced MATURE worker!
     You have to talk yourself up, be proud of what you know 
and what you can do.

    I found the courage to ``put myself out there'' and I told my 
friend that I would like to speak to the owner about being his personal 
assistant. I thought big, and would take what I could get.
    My friend set up the meeting. I took my new self-confidence, my 
newly polished resume, my zinger of a cover letter and went to meet 
with him. I think he really wanted some help, but wasn't sure he needed 
a ``whole person'' to do what needed to be done. He wasn't convinced 
that there was enough to keep an assistant busy.
    But I had an ace up my sleeve. The Vermont Associates staff had 
given me info on an employer incentive program offered as part of the 
SCSEP, called the ``On The Job Experience'' (OJE). My boss has told me 
quite frankly that without it he probably would not have hired me.
    So, largely because of the skills I could bring to the job due to 
my training and the OJE incentive, I did get the job. I was hired on 
the company's standard 500 hours probation at a pay rate that was the 
highest I have ever had. Of course it was up to me to keep the job, but 
that was December 2009 and this is October 2011. I even got a very nice 
raise in January this year. Interestingly, my job offer states that I 
would be working a minimum of 20 hours per week. My first week I 
clocked 43 hours and was asked to watch the overtime! I have not put in 
less than 40 hours since. I have insurance benefits, vacation and 
personal time and am now investing in a 401k!
    All in all being a Participant in the SCSEP gave me a lot of things 
a welfare program never could.

    1. It gave me the occupational skills and specialized training to 
obtain real, lasting employment.
    2. It gave me the confidence in my abilities to succeed.
    3. It gave me the opportunity to provide a community service to my 
town, in a wonderful way that was an inspiration to my family and not a 
burden on them.
    4. Ultimately, it gave me the stepping stones to become 
economically self-sufficient.
    5. It helped ease the fear of survival on just Social Security. I 
don't need to grasp at early retirement at a low level; I am building a 
stronger retirement and have put that much further in my future.

    Vermont Associates and the SCSEP helped me turn my life around. The 
SCSEP is a program that works!
    Now--I tell a different story. I am 61; I am not even considering 
collecting my Social Security at 62. I really love my job. Because of 
it, I sleep better, eat better, and can ``almost'' afford my heat. All 
together my health is better, so I don't worry so much about getting 
older and being sick, which makes my health even better: the downward 
spiral is reversed. I can hold my head up when I get home. My kids are 
proud of me.
    Thank you to Senator Sanders, Senator Paul, and the rest of the 
members of the HELP committee for the opportunity to share my story 
with you today. I sincerely appreciate it.

    Senator Sanders. Thank you very much.
    Our third witness is Dr. Heidi Hartmann, the president of 
the Washington-based Institute for Women's Policy Research, 
which she founded in 1987. Dr. Hartmann is also a research 
professor at the George Washington University and we thank her 
very much for being with us today.
    Dr. Hartmann.

       STATEMENT OF HEIDI HARTMANN, Ph.D., INSTITUTE FOR 
            WOMEN'S POLICY RESEARCH, WASHINGTON, DC

    Ms. Hartmann. Good morning, Mr. Chairman. It's a pleasure 
to be here and I thank you for this opportunity to testify. In 
addition, as you said, to being president of the Institute for 
Women's Policy Research, I am a labor economist with a Ph.D. 
degree from Yale University.
    I want to share with you findings from some recent research 
and I would like to acknowledge the support of the Ford 
Foundation, the Rockefeller Foundation and the Annie Casey 
Foundation in supporting our work. To put it briefly, our 
studies show that seniors have been hit hard by this recession. 
Their income from assets and pensions has fallen and they are 
trying to make up for that by working more.
    Fortunately, Social Security is there for them and it is 
making up a larger share of their income at the same time that 
other sources of income have declined. Among all the age 
groups, only the elderly did not see an increase in poverty 
during the recession and its aftermath, and this income 
stability is almost certainly a result of the near universality 
of Social Security and its important protective features such 
as its lifetime guarantee and its cost-of-living adjustments.
    As a result of the recession, more Americans of all ages 
are worried about having enough funds for retirement. Fewer 
feel they are saving enough for retirement. Many are borrowing 
from their retirement funds or withdrawing money from savings 
to deal with the slow recovery from the recession.
    I am skipping through my testimony and I will be 
summarizing it. The severe loss in assets as a result of the 
recession should increase policymakers' concern that those who 
are 45 to 59 years old who are beginning to enter retirement 
now and will continue to do so for the next 20 years will need 
Social Security benefits even more than the current generation 
of retirees.
    These older workers are also experiencing a 
disproportionate share of long-term unemployment and therefore 
programs that create jobs, such as the American Jobs Act, are 
especially important to them. And as we have just heard from 
the poignant testimony of Ms. Ruggles, the assistance with job 
training and finding employment is also critically important as 
is continued long-term unemployment insurance benefits.
    I would like to illustrate some of the major points of our 
research. First, older Americans are relying more on Social 
Security. First, in the full testimony with all the figures, 
Figure 2.5 show that women's income from all sources is lower 
than men's income and that women therefore rely on Social 
Security more than men do.
    This graph, which is Figure 6 in the testimony, show that 
for all women 65 and older the share relying on Social Security 
for 80 percent or more of their income has grown 4 percentage 
points since 1999 to 50 percent. In other words, half of all 
women 65 and over are getting 80 percent or more of their 
income from Social Security.
    For men, the increase has been even greater in this 
recession and recovery period. Since 1999, the share of men 65 
and older who are relying on Social Security for 80 percent or 
more of their income has grown by 6 percentage points--from 29 
percent to 35 percent. So that's more than one-third of all men 
who are now relying on Social Security for more than 80 percent 
of their income.
    The period from 1999 to 2009, of course, included two 
recessions--that 2001 recession--and the GAO testifier 
mentioned that at the start of the second recession older 
people were not in a great position in terms of their assets 
because most Americans never really recovered from the 2001 
recession before this much bigger recession hit in 2007.
    So we have another graph in the full testimony that shows 
that the older old rely more on Social Security than the 
younger old, and also that minorities rely on Social Security 
for larger shares of their income than do whites.
    Second, I would like to point out in the next graph 
something that the GAO also mentioned--that Social Security has 
been remarkably successful in this recession in preventing the 
poverty rates for older Americans from going up. As you can see 
in the green line--those are Americans 65 and older--their 
poverty rates actually fell between 2007 and 2010.
    But you can also see that the age group characterized by 
Ms. Ruggles, for them the poverty went up for those 60 to 64--
that's the blue line--their poverty increased during the 
recession, and especially for those 55 to 59--the red line--
their poverty rate steadily increased during the 4-years of the 
recession and recovery, and this reflects the fact that they 
are still largely in the labor force and the labor force is 
simply not providing the jobs.
    Again, their rising poverty rates reflects the difficulties 
that older workers are having in the labor market and it shows 
how important it is to create jobs and to provide job training 
for this age group.
    Third, I want to share some findings from a survey we did 
of 2,700 Americans in the next chart, and just looking at how 
people believe they will or will not have adequate savings to 
maintain their standard of living in retirement. We asked them 
to compare their view of that now to what they held before the 
recession, and the drops in the confidence that their savings 
will be enough to maintain their standard of living are 
amazing.
    For example, for women ages 45 to 59 in the blue lines 
showing a severe drop--52 percent before the recession thought 
their savings would be adequate. Now, only 25 percent do. And 
once again, women have less confidence than men and a greater 
drop in confidence as a result of this recession.
    Once again, this age group is an age group that is at 
severe risk and therefore, I think, I would just conclude with 
the notion that these programs such as described that Ms. 
Ruggles was able to take advantage of are extremely important 
to continue.
    If we are going to prevent poverty from increasing as this 
generation retires, we have to do something now to strengthen 
their employment opportunities and their ability to save and 
build for their retirement. Thank you very much.
    [The prepared statement of Ms. Hartmann follows:]

              Prepared Statement of Heidi Hartmann, Ph.D.

    Good Morning, Mr. Chairman. I am Heidi Hartmann, president of the 
Institute for Women's Policy Research and a labor economist with a 
Ph.D. degree from Yale University. Thank you for the opportunity to 
testify today and to share the findings from research recently 
completed by the Institute. To put it briefly, our studies show that 
seniors have been hit hard by the recession.
    Their income from assets and pensions has fallen and they are 
trying to make up for that by working more. Fortunately, Social 
Security is there for them and is making up a larger share of their 
income, at the same time that other sources of income have declined. 
Among all age groups, only the elderly did not see an increase in 
poverty during the recession and its aftermath. This income stability 
is almost certainly a result of the near-universality of Social 
Security and its important protective features, such as its lifetime 
guarantee and its cost-of-living adjustments. It should be pointed out, 
however, that because of high and rising medical costs for the elderly, 
the current poverty measure underestimates elders' poverty; use of the 
CPI-E in setting the annual cost of living adjustment (COLA) for Social 
Security benefits would more accurately reflect the consumption 
patterns of the older population.
    As a result of the recession, more Americans of all ages are 
worried about having enough funds for retirement, and fewer feel they 
are saving enough for retirement. Many are borrowing from their 
retirement funds or withdrawing money from savings to deal with the 
slow recovery from the recession. The severe loss in assets as a result 
of the recession should increase policymakers' concern that those 45-59 
years old, who are beginning to enter retirement now and will continue 
to do so for the next 20 years, will need Social Security benefits even 
more than the current generation of retirees. Therefore, it is of the 
utmost importance that Social Security benefits, including the COLA, 
not be a target of budget cutting, either through direct cuts or an 
increase in the retirement age. Each 1-year increase in the retirement 
age cuts benefits by approximately 7 percent.
    IWPR has published several reports in the past few months that shed 
light on how the older population has been faring in the recession and 
recovery. In 2010 we conducted a survey of 2,700 adults, asking them 
about their experiences since the recession, and, in a few cases we can 
compare their answers with those given by a similar sample of adults to 
similar questions in a survey administered in 2007, allowing us to 
compare response before and after the 2007-9 recession. Two reports 
based on the survey were released on October 2. In an earlier study, we 
analyzed data from the Federal Government's Current Population Survey 
between 1999 and 2009, to see what difference the recession made in the 
financial well-being of the older population. I would like to summarize 
that information for you today.

                CHANGES IN INCOME OF THE 65+ POPULATION

    Our analysis of the incomes of the older population (65 years and 
older), based on the Federal Current Population Survey, shows a 
startling drop in asset income across the past decade, from 1999 to 
2009 (Hartmann, Hayes, and Drago 2011). This decade included two 
recessions, one in 2001, from which the falling asset income of the 
elderly never fully recovered, and another in 2007-9, a long and deep 
recession associated with a banking crisis and a devastating crash in 
the value of equity and housing assets. While the stock market has 
recovered somewhat, the value of housing is at about 2003 levels and is 
expected to fall further (Hayes and Hartmann 2011).
    Our analysis was done separately for women and men of different age 
groups (among those aged 62 years and older) and for all sources of 
income (Hartmann, Hayes, and Drago 2011). For both women and men, the 
shares receiving asset income fell between 1999 and 2009 for all older 
age groups, and the shares of men receiving pension income fell for all 
older age groups (for women's pension income the picture is more mixed, 
partly because women increased their labor force participation and 
therefore increased the likelihood of having pensions).
    Asset income fell the most for those between the ages of 65 and 74, 
by 45 percent for women and 40 percent for men. Other older age groups 
(those 62-64 and those 75 and older) lost about one-quarter to one-
third of their asset income.
    In contrast to substantial losses in asset income, both the younger 
old (aged 65-74) and the older old (ages 75 and older) saw their 
earnings and their Social Security benefits increase across this 10-
year period. The share reporting earnings grew by about 4 percentage 
points for the entire older population (65 years and older), which was 
almost a doubling for women (see Figure 1). Women's earnings doubled or 
nearly doubled for both age groups, while men's earnings grew by one-
quarter to one-third.
    Figures 2-5 illustrate trends in the changing dollar values of 
income sources for the 65+ population (all figures are in 2009 
dollars). The figures also show that women generally have less income 
from all sources than do men.

              THE INCREASED IMPORTANCE OF SOCIAL SECURITY

    According to the IWPR's analysis of the Current Population Survey 
(Hartmann, Hayes, and Drago 2011), the combination of asset losses (and 
for men, pension losses) and more income from working resulted in more 
women and men relying on Social Security for a larger share of their 
income. Figure 6 shows that the share of women and men relying on 
Social Security for 80 percent or more of their income grew between 
1999 and 2009. For women the increase is 4 percentage points and for 
men it is 6 percentage points. More than one-third of men aged 65 and 
older rely on Social Security for 80 percent or more of their income 
and half of women in the same age range do (in 2009). Figure 7 shows 
that for both males and females the older old rely on Social Security 
even more than the younger old among each of the three largest race/
ethnic groups in the United States. For example, among white women, of 
those who are 75 and above, 55 percent rely on Social Security for 80 
percent or more of their income, a share which is 13 percentage points 
larger than the share of white women aged 65-74. For Hispanic women the 
shares of the older old relying on Social Security to that extent are 
even larger, 68, a share which is 17 percentage points larger than for 
the younger old. Both Figures 6 and 7 also illustrate that women 
typically rely more on Social Security than do men.
    Current Population Survey data also show how poverty rates have 
changed across the recession years (U.S. Census Bureau 2008a, 2009, 
2010, and 2011a). Figure 8 shows that in 2007, when the recession had 
barely begun (December 2007 is the recognized starting point of the 
Great Recession), poverty, at 8.1 percent was the lowest for those aged 
55-59 years old, an age group that is still mostly in the labor force; 
the next older group (those aged 60-64) had the next highest poverty 
rate at 9.4 percent; and the oldest group (those aged 65 and older) had 
the highest poverty rate at 9.7 percent. By 2010, the year after the 
recession had come to an end (and the recovery had supposedly begun), 
poverty rates had climbed for the two younger groups, to 10.1 percent 
for both, while poverty had fallen slightly for the oldest group to 9.0 
percent (Figure 6). The increasing poverty rates for those aged 55-64 
show the importance of legislation that provides employment assistance 
to older workers. Older workers are being left out of the recovery. 
Data show that since June 2009, the month when the economy began to 
grow again, the number of unemployed older Americans (those 55 and 
older) has increased, by nearly 3 percentage points, through September 
2011, while the number of unemployed in all other age groups fell about 
5 to 6 percent points (Rix 2011).

             THE DECREASE IN ASSETS OF THE OLDER POPULATION

    For a closer look at assets held by the older population, the 
Federal Reserve Board's Survey of Consumer Finances provides additional 
information. Bricker and colleagues (2011) studied the net worth of 
households from data collected before (2007) and after (2009) the 
recession. More than 6 of 10 households headed by someone aged 55 and 
older in 2007 lost wealth during the recession. In households headed by 
someone aged 55-64 in 2007, wealth (net equity in homes and financial 
assets combined) declined from $257,700 to $222,300 for the average 
(median) household, or about 14 percent. In households headed by 
someone aged 75 and older in 2007, wealth declined from $228,900 to 
$191,000, or 17 percent, between 2007 and 2009.
    Financial assets that could produce retirement income (including 
stocks, pooled investment funds, and retirement accounts) all declined 
for the average household headed by someone aged 55 and older (Bricker 
et al. 2011). The median value for all financial assets combined 
declined from $78,200 to $72,500 in households headed by someone aged 
55-64 in 2007, from $63,900 to $48,000 for households headed by someone 
aged 65-74, and from $41,400 to $39,000 for households headed by 
someone aged 75 and older. While the value of financial assets fell 
only about 6 to 7 percent for the youngest and oldest groups, the 
middle age group, 65-74 years old, saw a 25 percent decline in the 
value of financial assets in the recession.
    Although Census Bureau data are not showing a drop in home 
ownership among the population 65 and over during the recession, the 
share of homeowners with indebtedness on their homes increased between 
2007 and 2009 by about 3 percentage points and the share owning their 
homes free and clear dropped by the same amount, from about 68 percent 
to 65 percent (U.S. Census Bureau 2008b and 2011b). According the AARP 
Public Policy Institute, this increased indebtedness is raising housing 
costs for the elderly (Harrell 2011). Between 2000 and 2009, housing 
cost burdens, as measured by the share of the population paying more 
than 30 percent of their income on housing, increased for all income 
quartiles of the population aged 50 and up (including both home owners 
and renters), by anywhere from 3 percentage points to 10 percentage 
points. For example, for the second income quartile, those with incomes 
between approximately $23,000 and $47,000, the share with high housing 
costs burdens increased from 28 percent in 2000 to 38 percent in 2009 
(Harrell 2011).

               EXPERIENCES OF HARDSHIP AND WAYS OF COPING

    Not surprisingly, given the length and depth of the Great 
Recession, many older Americans are experiencing significant hardships. 
Among women and men 60 years of age and older, women consistently 
experience more hardship than men, according to their responses to the 
IWPR-Rockefeller Survey on Economic Security. At the time of the 
survey, which was completed in November 2010, women and men report the 
most difficulty paying for health care and health insurance: 39 percent 
of women and 20 percent of men find it ``somewhat difficult'' or ``very 
difficult.'' Paying monthly utility bills and gasoline or other 
transportation is also very difficult for \1/3\ of women and \1/4\ of 
men aged 60 and older. Finally paying for food is difficult for 1 of 5 
women and 1 of 7 men aged 60 and above. (See Figure 9.)
    Respondents were also asked how much hardship they had experienced 
in the prior year. Two-fifths to three-fifths of women and men said 
they cut back on household spending, vacations, or entertainment. More 
than 1 in 5 failed to pay a bill on time. About 1 in 6 women and 1 in 
10 men did not fill a prescription. Eight percent of women and 4 
percent of men received food stamps. Six percent of women and 3 percent 
of men aged 60 and above said they went hungry in the past year because 
they could not afford food. (See Figure 10.)
    About half of all respondents report that they had lost investments 
in the prior 2 years, 48 percent of women and 47 percent of men, and 
about half of those report that they lost more than 20 percent in value 
(25 percent of women and 28 percent of men). Proportions among only 
those 60 and older are about the same (Hess, Hayes, and Hartmann 2011). 
Among those 60 years and older, about 40 percent (39 percent of both 
women and men) say they have taken money out of their savings or 
retirement fund in the year prior to the survey, 10 percent of women 
and 9 percent of men say they have borrowed against a retirement plan, 
and 27 percent of women and 23 percent of men that age say they have 
stopped or reduced contributions to retirement savings (Hayes and 
Hartmann, 2011).
    Older Americans have also borrowed to make ends meet. About 13 
percent of women and 14 percent of men aged 60 and up report having 
increased their credit card debt in the prior year, 5 percent of women 
and 7 percent of men report taking out a second mortgage or home equity 
loan, 12 percent of women and 9 percent of men have borrowed from a 
friend (Hayes and Hartmann 2011). Those who are younger generally 
report higher rates of tapping into savings for the future and higher 
rates of borrowing from other sources than the 60 and up age group.
    Among all those who have not yet retired, the shares of women and 
men believing they are saving enough for retirement have dropped 
sharply. Comparing the 2010 survey results with those from an earlier 
2007 survey shows that now only 25 percent of women believe they are 
saving enough for retirement, a drop of 9 percentage points. Among men, 
the drop is 10 percentage points, from 45 to 35 percent, in the share 
who believe they are saving sufficiently for retirement (Hess, Hayes, 
and Hartmann 2011).

                          FUTURE EXPECTATIONS

    Americans are increasingly concerned about not having enough money 
to live on in retirement. Respondents of all ages (18 years and up) 
were asked about their worries about four potential challenges in 
retirement--not being able to afford health care, having to go to a 
nursing home, Social Security being cut back or eliminated, and not 
having enough money to live on--in both the 2010 survey and an earlier 
2007 Rockefeller Foundation survey. Americans expressed increased worry 
in 2010 on all four dimensions, but the largest increase in worry was 
expressed for not having enough to live on. In 2007, nearly 2 in 5 
women expressed ``a lot'' or ``a fair amount'' of worry about not 
having enough to live on in retirement; in 2010, 3 in 5 women did so. 
For men the increase was from 28 percent to 43 percent (see Figure 11).
    The recession has had an even larger effect on people's 
expectations that their retirement income will be sufficient to 
maintain their standard of living in retirement. Respondents were asked 
about their expectations before the recession and when the survey was 
taken (in November 2010). Adults of all ages show significant declines 
in that expectation. Those showing the largest drop in the expectation 
that they will be able to maintain their standard of living are the 
group from 45 to 59 years old. For women that age the drop was 
precipitous, from 52 to 25 percent; men's drop was also large, from 52 
percent responding they had enough before the recession to only 35 
percent responding that way currently. Drops for the other age ranges 
(18-44 years and 60+ years) are a minimum of 9 percentage points for 
men and 13 percentage points for women, with the youngest being the 
most optimistic that they will have enough to maintain their standard 
of living in retirement (see Figure 12).
    Among women and men not yet retired, many more expect to be working 
in retirement than are likely to do so, not withstanding that the labor 
force participation rates of older Americans have been rising for at 
least the last 25 years. Of those not yet retired, fully 72 percent of 
women and 70 percent of men respond that they expect to work in 
retirement (Hess, Hayes, and Hartmann 2011). Yet as of 2010, even with 
substantial increases in labor force participation in recent years for 
older Americans, only 27 percent of women and 37 percent of men aged 
65-69 are working or looking for work, and among those 75 and older, 
only 8 percent of women and 15 percent of men are working or looking 
for work. Of those who expect to work after retirement, Figure 13 shows 
that women are much more likely to respond that they will have to work 
(41 percent) than men are (29 percent).
    Employment data from the Bureau of Labor Statistics show that the 
labor force participation rates of older workers continued to increase 
through the recession. Both the number working and the number 
unemployed grew, at least partly because the share of the population 
made up of older Americans grew, as the large baby boom cohort aged. As 
of September 2011, 2.1 million Americans 55 and older are looking for 
work, making up 15 percent of all unemployed workers. Of older 
unemployed workers, 61 percent have been unemployed for 27 weeks or 
more, a share that increased steadily since the beginning of the 
recession (when only 22 percent of unemployed workers aged 55 and older 
were unemployed that long). The proportion of older Americans who have 
been employed for a long time is much greater than it is for younger 
Americans. The average duration of unemployment for workers under age 
55 is 38.6 weeks, while it is 54.8 weeks for those aged 55 and above 
(Rix 2011).
    It is likely that a continuing slow recovery will mean that many 
older unemployed workers will never find jobs. Given that our survey 
research shows that many of these workers are already using their 
savings and borrowing more, assistance in finding employment is 
critical for this group to prevent rates of poverty at older ages from 
increasing in the future. Efforts to increase job growth and provide 
job training are important policy levers that should be used to 
increase employment among older Americans, enabling them to rebuild 
their retirement savings.

                               References

Bricker, Jess, Brian Bucks, Arthur Kennickell, Traci Mach, and Kevin 
    Moore. 2011. ``Surveying the Aftermath of the Storm: Changes in 
    Family Finances from 2007 to 2009.'' Finance and Economics 
    Discussion Series, Divisions of Research and Statistics and 
    Monetary Affairs. Washington, DC: Federal Reserve Board.
Harrell, Rodney. 2011. ``Housing for Older Adults: The Impacts of the 
    Recession.'' Insight on the Issues 53 (August 2011). Washington, 
    DC: AARP Public Policy Institute. http://assets.aarp.org/rgcenter/
    ppi/liv-com/insight53.pdf.
Hartmann, Heidi, Jeff Hayes and Robert Drago. 2011. Social Security: 
    Especially Vital to Women and People of Color, Men Increasingly 
    Reliant. Washington, DC: Institute for Women's Policy Research.
Hayes, Jeff and Heidi Hartmann. 2011. Women and Men Living on the Edge: 
    Economic Insecurity After the Great Recession. Washington, DC: 
    Institute for Women's Policy Research.
Hess, Cynthia, Jeff Hayes, and Heidi Hartmann. 2011. Retirement on the 
    Edge: Women, Men, and Economic Insecurity After the Great 
    Recession. Washington, DC: Institute for Women's Policy Research.
Rix, Sara E. 2011. ``The Employment Situation, September 2011: Good 
    News for Older Jobseekers Remains Elusive.'' Fact Sheet 240 
    (October). Washington, DC: AARP Public Policy Institute.  (accessed 
    October 14, 2011).
U.S. Census Bureau. 2008a. Income, Poverty, and Health Insurance 
    Coverage in the United States, 2007. Current Population Reports, 
    Series P-60-235. Washington, DC: Government Printing Office.
U.S. Census Bureau. 2008b. American Housing Survey for the United 
    States: 2007. Current Housing Reports, Series 150/07. Washington, 
    DC: Government Printing Office. http://www.census.gov/prod/
    2008pubs/h150-07.pdf.
U.S. Census Bureau. 2010. Income, Poverty, and Health Insurance 
    Coverage in the United States, 2009. Current Population Reports, 
    Series P-60-238. Washington, DC: Government Printing Office.
U.S. Census Bureau. 2011a. Income, Poverty, and Health Insurance 
    Coverage in the United States, 2010. Current Population Reports, 
    Series P-60-239. Washington, DC: Government Printing Office.
U.S. Census Bureau. 2011b. American Housing Survey for the United 
    States: 2009. Current Housing Reports, Series 150/09. Washington, 
    DC: Government Printing Office. http://www.census.gov/prod/
    2011pubs/h150-09.pdf.

    
    
    
    
    
    
    
    
    
    
    
    
    
    

    Senator Sanders. Thank you very much, Dr. Hartmann.
    Our final witness is Dr. Sandra Nathan, senior vice 
president for economic security at the National Council on 
Aging where she oversees programs geared toward improving the 
economic well-being of 5 million vulnerable older adults by 
2020.
    Prior to joining NCOA, Dr. Nathan served as president and 
CEO of the Richmond Children's Foundation.
    Dr. Nathan, thanks very much for being with us.

 STATEMENT OF SANDRA NATHAN, Ph.D., NATIONAL COUNCIL ON AGING, 
                         WASHINGTON, DC

    Ms. Nathan. Thank you, Chairman Sanders.
    My fellow witnesses and guests, on behalf of the National 
Council on Aging, I greatly appreciate the opportunity to 
testify today. NCOA is a nonprofit service and advocacy 
organization head-
quartered here in Washington, DC.
    NCOA's mission is to improve the health and economic 
security of millions of older adults, especially those who are 
vulnerable and disadvantaged. NCOA is a national voice for 
older Americans and the community organizations that serve 
them, and working with nonprofits, businesses and government, 
NCOA develops creative solutions to help seniors find jobs and 
benefits, improve their health, live independently and remain 
active in their communities.
    Senator, throughout my career I have examined the issues 
that we are discussing here today from a public, private and 
nonprofit perspective. But my expertise is not the focus of my 
remarks.
    Today, I am an ambassador on behalf of the millions of 
older adults who struggle every day just to pay for food, for 
medicine, utilities, and a place to live.
    My remarks will give voice to the one in three, over 13 
million older adults in this country who are living on the 
edge, just one health incident, one car repair, one missed rent 
payment, one roof leak or one lay-off away from poverty, people 
like Frank from St. Johnsbury, VT, who shares,

          ``I am one paycheck away from foreclosure and 
        bankruptcy. Struggling to make ends meet, I went back 
        to college at the age of 59. I graduated at the age of 
        61 and continue training in my career field learning 
        new valuable skills but can't seem to get ahead simply 
        because I'm so strapped with debt.''

    Ann Verdella from Warsaw, KY, who says,

        ``I'm a 72-year-old female getting by on $650 a month 
        in Social Security. I'm living in a senior citizens 
        subsidized apartment complex in rural Kentucky. I need 
        my medical benefits and food stamps so that I can make 
        ends meet every month. I'm someone's mother and 
        grandmother.''

    Struggling to make ends meet, many low- and moderate-income 
older adults are either rethinking retirement plans and 
extending work or returning to the workforce, often their only 
option. As Marcus in Eugene, OR, puts it, ``My 83-year-old 
mother is so pressed economically that she's had to go back to 
work in a part-time job.''
    With little cash, many older adults in this country today 
are balancing their budgets on credit, foregoing necessary 
medical care and letting the bills mount.
    This past year, NCOA launched a national video advocacy 
campaign called ``One Away'', which gives voice to older adults 
who are struggling financially. Working with over 14 State and 
local organizations including many strong partners in States 
like Vermont, Kentucky, Iowa, Maryland, North Carolina and 
Pennsylvania, ``One Away'' captures real stories of seniors to 
raise awareness and advocate for policy change.
    The ``One Away'' campaign shines a spotlight on the fact 
that the golden years are not so golden for many older adults. 
Despite their struggles, they regularly suffer in silence and 
the courageous few who do reach out for help often find a 
system that is ill-equipped to respond to their needs.
    Of course, family, caregivers and friends play an essential 
role in helping older adults but the needs that older adults 
are facing today are often too complex for families and friends 
to have the expertise to assist them.
    With the retirement of over 78 million Baby Boomers ahead 
of us, NCOA believes the pending reauthorization of the Older 
Americans Act provides a key opportunity to initiate important 
changes.
    We have three specific recommendations for the Older 
Americans Act this morning and I'll highlight them very 
briefly. First, the Older Americans reauthorization must 
improve the coordination of existing resources and empower 
older adults to access and navigate the range of public and 
private supports that are critical to increasing their economic 
security.
    With the growth in the older population and their economic 
struggles, the Aging Network organizations across the country 
are experiencing escalated demand for core services such as job 
training, help with applying for benefits and subsidized meals.
    We feel strongly that the Older Americans Act 
reauthorization should remove barriers and strengthen 
opportunities for the network to better coordinate existing 
Federal, State, local and private resources through a 
comprehensive person-centered approach to elder economic 
security.
    Second, the Older Americans Act reauthorization should 
define economic security and it's explicitly stated as an 
objective of the Older Americans Act. It should evaluate and 
replicate comprehensive person-centered approaches to economic 
casework and assistance.
    Although the economic security has long been an applied 
goal of the Older Americans Act, the recent economic downturn 
and its negative impact on the housing, employment and 
financial markets have made it an even more pressing matter for 
older adults.
    The Aging Network must define and adopt a measurable goal 
as a benchmark. The term ``economic security'' should mean 
access to assets, income and community-based supports necessary 
to provide for basic needs. At a minimum, the measure must be 
geographically based, take into account life circumstances and 
ensure that an individual can afford housing, health, 
nutrition, transportation, basic household needs, financial 
services, and if necessary, long-term care.
    These recommendations are based on the Elder Economic 
Security Standard Index, or Elder Index, created by the Wider 
Opportunities for Women and the Gerontology Institute.
    Our third recommendation is that the Older Americans Act 
reauthorization must modernize, expand and protect training and 
employment assistance for mature workers, including the Senior 
Community Service Employment Program. Our previous witness, Ms. 
Ruggles, talked about the importance of that program and we 
feel very strongly that it should be expanded to meet the needs 
of an aging workforce.
    Finally, we could not forget to protect and strengthen the 
foundational role that Social Security, Medicare and Medicaid 
play in ensuring economic security.
    We have specific recommendations, Senator, that we've 
included in our white papers and I'd be happy to elaborate on 
those. But very quickly, I'd like to close with a story about 
Ms. Perry in Baltimore who worked hard, wanted to retire at the 
age of 70 and just found herself in a position where she wasn't 
able to do so. She went to the CASH Campaign in Baltimore, 
which is an economic security center, and as a result of the 
service and supports that we were able to provide her, she was 
able to get her life back on a path of economic security.
    So thank you so much for the opportunity to testify today. 
I'd be happy to answer any questions you might have.
    [The prepared statement of Ms. Nathan follows:]

               Prepared Statement of Sandra Nathan, Ph.D.

    Chairman Sanders, Ranking Member Paul, esteemed members of the 
subcommittee, my fellow witnesses and guests. On behalf of the National 
Council on Aging (NCOA), I greatly appreciate the opportunity to 
testify today.
    NCOA (www.NCOA.org) is a nonprofit service and advocacy 
organization headquartered in Washington, DC. NCOA's mission is to 
improve the health and economic security of millions of older adults, 
especially those who are vulnerable and disadvantaged. NCOA is a 
national voice for older Americans and the community organizations that 
serve them. Working with nonprofit organizations, businesses, and 
government, NCOA develops creative solutions to help seniors find jobs 
and benefits, improve their health, live independently, and remain 
active in their communities.
    Throughout my career, I have examined the issues that we will 
discuss today in this chamber, from a public, private, and nonprofit 
perspective. That said, my expertise is not the focus of my remarks 
today. Today, I am an ambassador on behalf of the older adults who 
struggle every day just to pay for food, medicine, and a place to live. 
My remarks will give voice to the 13 million older adults who are 
living on the edge--living one health incident, one car repair, one 
missed rent payment, one roof leak, or one layoff away from poverty.
    People like Frank from St. Johnsbury, VT, who shares,

          ``I am one paycheck away from foreclosure and bankruptcy. 
        Struggling to make ends meet, I went back to college at age 59. 
        Graduated at age 61, I continued training in my career field 
        learning new, valuable skills but find I can't seem to get 
        ahead because I am strapped with debt.''

    Or David in Boone, IA, who says,

          ``For myself and many of my friends [living one away] means 
        having to choose whether to buy groceries for the family or the 
        medicines we require for diabetes, high blood pressure, heart 
        disease, chronic pain, etc. My wife and I have even considered 
        whether we may need to sell our home. We didn't live high, but 
        we had money for the necessities of life. Now it mostly goes 
        for food and medicine, and very little else.''

    And then there is Verdella from Warsaw, KY,

          ``I am a 72-year-old female getting only $650.00 a month in 
        Social Security. I'm living in a senior citizens subsidized 
        apartment complex in rural Kentucky. I need my medical benefits 
        and food stamps to make ends meet each month. I'm someone's 
        mother and grandmother.''

    The economic reality of old age has changed considerably over the 
last several decades. As individuals live and work longer, they also 
have had to take on increasing responsibility with regard to 
safeguarding their own health and financial status later in life. At 
the same time, many older Americans have seen their hard-earned 
personal and employer-supported retirement savings and assets diminish, 
with no guarantees for the future, and very little time for their 
assets to rebound.
    Homeownership status, once the cornerstone of economic security for 
so many older adults, has become a source of stress and debt, with many 
mortgages exceeding home value, and escalating property taxes beyond 
the reach of those with fixed incomes. Struggling to make ends meet, 
many low- and moderate-income older adults are either rethinking 
retirement plans and extending work or trying to return to the 
workforce. Employment is often the only solution for so many low-
income older adults. Yet, unemployment rates for older workers are at 
record highs with over 1.8 million adults aged 55 and older currently 
seeking work. Many have been frustrated by the search and have filed 
for Social Security early, reducing lifetime benefits by 25 percent and 
threatening their long-term economic security. Without employment 
income and with insufficient Social Security benefits, individuals 
often balance household budgets on credit, forego necessary medical 
care, and let the bills mount.
    This past year, NCOA launched a national video advocacy campaign, 
entitled One Away  (www.OneAway.org), which gives voice to older adults 
who are struggling with economic insecurity. Working with 14 State and 
local organizations, including strong partners in Vermont, Kentucky, 
Iowa, Maryland, North Carolina, and Pennsylvania, the One Away campaign 
captures real stories of seniors to raise awareness and advocate for 
policy change that will empower them to access the coordinated services 
and supports they need to live with economic security and dignity.
    The One Away campaign shines a spotlight on the reality that the 
``golden years'' are not so golden for many older adults. The reality 
is that 1 in 3, or over 13 million, older Americans live in poverty or 
right on its edge, with annual incomes of only $22,000 or less. These 
seniors have to decide each day whether to pay for medicine or food, 
rent or utilities. Despite their struggles, they regularly suffer in 
silence, their voices unheard. The courageous few that reach out for 
help often find themselves attempting to navigate a system ill-equipped 
to respond to their full range of economic needs. Of course, family 
members, caregivers, and friends play an essential role in helping 
older adults remain in their home and maintain their independence, but 
often the needs of vulnerable older adults exceed the expertise of 
friends and family.
    As Marcus in Eugene, OR puts it,

          ``My 83-year-old mother is so pressed economically to the 
        extent that she has taken a part-time job to make ends meet.''

    Catholic Charities in Schenectady, New York, shares,

          ``An emerging trend is foreclosure and family members that 
        are unemployed that need assistance from seniors.''

    With the population of older individuals expected to grow 
exponentially in the coming years, the Aging Services Network (ASN) 
faces incredible challenges associated with the influx of older 
individuals. Organizations from across the country are experiencing 
large increases in the demand for core services, such as job training 
and assistance, help with applying for benefits, and subsidized meals. 
These aging service organizations also find themselves stretched to try 
and assist clients with hard-to-solve financial problems that they feel 
ill-equipped to handle, such as threats of foreclosure or eviction, 
high credit card debts, and a pervasive and growing sense of economic 
insecurity.
    According to a professional at the Area Agency on Aging in Raleigh, 
NC,

          ``I am regularly dealing with [seniors who have] credit card 
        debt that has often snowballed into thousands of dollars, with 
        no way possible to get out from under the debt, and credit card 
        payments not leaving enough income to cover basics like food 
        and utilities.''

    In order to measure impact and best structure programming to meet 
the economic needs of older adults, the network first must adopt and 
define a measurable goal as a benchmark. The term ``economic security'' 
should mean access to the assets, income, and community-based supports 
necessary to provide for basic human needs. At a minimum, the measure 
must be geographically based, take into account an individual's life 
circumstances (health status, household composition, and housing 
scenario), and ensure that an economically secure individual can afford 
all of the following in a manner that is adequate and unsubsidized:

     Housing,
     Health care,
     Nutrition,
     Transportation,
     Basic household essentials,
     Financial services, and
     Long-term care, if necessary.

    In 2006, Wider Opportunities for Women (WOW) and the Gerontology 
Institute at the University of Massachusetts-Boston created a 
nationally vetted methodology to measure economic security, known as 
the Elder Economic Security Standard Index (Elder Index).
    The Elder Index stands in stark contrast to traditional measures of 
economic need, most notably the Federal poverty level (FPL). For single 
older adults, the 2011 FPL amounts to $10,890. In contrast, annual 
national averages of the Elder Index total $16,415 to $20,326 depending 
on housing status.
    The FPL is a measure of absolute deprivation as opposed to a 
measure of economic security. Its calculation is based on the cost of 
food multiplied by three. Further, the FPL does not account for 
geographic differences in cost. As an outdated, one-size-fits-all 
measure, the FPL does not reflect the true cost of living; yet, it 
drives nearly all Federal, State, and local policy design and program 
delivery. While measures of deprivation are necessary, ensuring that 
elders are able to age in place with dignity requires the use of a more 
aspirational goal and a complementary benchmark of economic need. Below 
you will find the Elder Index national averages for a senior living 
alone and an elderly couple.

   Table 1.--The Elder Economic Security Standard Index, U.S. Average
          Monthly Expenses  for Selected Household Types, 2010
------------------------------------------------------------------------
                                  Elder person           Elder couple
Monthly expenses/Monthly and -------------------------------------------
        yearly totals         Owner w/o             Owner w/o
                               mortgage    Renter    mortgage    Renter
------------------------------------------------------------------------
Housing.....................       $372       $698       $372       $698
Food........................       $231       $231       $424       $424
Transportation (Private            $283       $283       $346       $346
 Auto)......................
Health Care.................       $254       $254       $508       $508
Miscellaneous...............       $228       $228       $330       $330
Elder Index Per Month.......     $1,368     $1,694     $1,979     $2,305
Elder Index Per Year........    $16,415    $20,326    $23,751   $27,663
------------------------------------------------------------------------
Source: Conahan, Judith, Ellen A Bruce, Laura H Russell, and Wider
  Opportunities for Women. The WOW-GI National Elder Economic Security
  Standard: A Methodology to Determine Economic Security for Elders.
  Washington, DC: Wider Opportunities for Women, 2006. Values inflated
  to 2010 using the Consumer Price Index.

    There is a national, State, and local groundswell in regard to 
reframing the issue using an economic security lens. For example, just 
last week Governor Brown of California signed bill AB 138, the Elder 
Economic Planning Act of 2011. This law now requires the California 
Department of Aging and the local Area Agencies on Aging to use the 
Elder Index as a guide in making resource allocation decisions and in 
crafting statewide and local area plans. In addition, over the past 18 
months, NCOA has been working with 12 community organizations to use 
the Elder Index to benchmark client outcomes as a part of our work 
under the national Economic Security Initiative. From our experience, 
it is clear that use of the Elder Index in this way will help the aging 
network, seniors, and their caregivers better measure the impact of the 
various public and private supports brought to bear on their 
circumstances. For that reason, NCOA recommends that the tenets of the 
California law be adopted nationally.
    Figure 1 provides an example of the power of benchmarking benefits 
access against a measure of economic security. According to the Social 
Security Administration, the average Social Security payment for an 
older West Virginian ($514/month) provides about 35 percent of a single 
renter's economic security as defined by WOW's Elder Index. Drawing 
upon critical benefits such as Supplemental Security Income (SSI), 
Supplemental Nutrition Assistance Program (SNAP, formerly known as Food 
Stamps), prescription drug assistance, Medicaid, and utility assistance 
can free up this older adult's limited income, effectively doubling her 
economic security. Setting goals and benchmarking outcomes using this 
framework can be a powerful tool in empowering seniors to explore their 
options and motivating staff in the network to ensure that all possible 
supports are brought to bear on an individual's circumstances.



    With the retirement of over 78 million baby boomers ahead of us and 
the current, but long-lasting, implications of present economic 
challenges, it is time for renewed energy and innovation to make 
important, lasting strategic changes that will result in systems change 
and ensure that older adults are able to access the coordinated public 
and private resources they need to be financially secure and remain 
independent.
    NCOA believes that the Older Americans Act (OAA) is a critical 
vehicle in this process. We will share with you today recommendations 
for the pending reauthorization of the OAA that are grounded in our 
experience and discussions with ASN partners.
    1. Better coordinate existing resources and empower older adults to 
access and navigate the range of public and private supports that are 
critical to increasing the economic security of all. OAA 
reauthorization should remove barriers and strengthen opportunities for 
the aging network to take a leadership role in broadening and deepening 
coordination of existing Federal, State, local, and private resources 
through the implementation of a comprehensive, person-centered 
approach. In order to ensure the most streamlined, cost-effective 
strategy, a comprehensive, person-centered approach must:

     Address a senior's immediate crisis/need.
     Take all of a senior's financial, housing, health, 
employment, and transportation needs into account.
     Inform and empower older adults to draw upon the range of 
public and private benefits and assistance for which they may be 
eligible.
     Provide help navigating supports when needed.
     Offer one-on-one assistance that is culturally appropriate 
and provided by a trusted source.
     Include followup to ensure that individuals receive the 
support they need to navigate and follow through in pursing options.

    2. Define economic security and explicitly state it as an objective 
of the OAA and evaluate and replicate comprehensive, person-centered 
approaches to economic casework and assistance. Although economic 
security has long been an implied goal of the OAA, the recent economic 
downturn and its negative impact on the housing, employment, and 
financial markets have made it an even more pressing matter for those 
concerned with the well-being of older adults.
    3. Modernize, expand, and protect training and employment 
assistance services for mature workers under the OAA, including the 
Senior Community Service Employment Program (SCSEP). Training and job 
placement assistance is essential to individual and community economic 
stability.
    4. Protect and strengthen the foundational role that Social 
Security, Medicare, and Medicaid play in ensuring the economic security 
of older adults. In light of the stories we have shared today, NCOA 
supports the Leadership Council of Aging Organization's (LCAO) OAA 
recommendation to provide resources for the Bureau of Labor Statistics 
to take a closer look at the methodology of the Consumer Price Index 
for the Elderly (CPI-E), developed in 1987 via reauthorization of the 
OAA, laying the groundwork to use CPI-E to calculate annual Social 
Security cost-of-living adjustments.

    In addition, NCOA recommends the following changes in other 
programs crucial to elder economic security:

    1. Streamline access to critical, lifeline supportive services and 
public benefits, such as SNAP, Medicare Part D Extra Help, and the Low-
Income Home Energy Assistance Program (LIHEAP). Benefits are a critical 
instrument to provide economic support to seniors in need, offering 
food, medical, home energy, and other assistance that not only 
alleviates their poverty, but also allows them to live with dignity.
    But benefits do more than help individuals. They are a genuine 
source of economic development in the community, supporting local 
hospitals, pharmacies, and grocery stores. Research from the USDA, for 
example, found a ``multiplier effect'' for the expansion of SNAP 
benefits in a community: Every $5 in new SNAP benefits generates as 
much as $9 in local economic activity.\1\
---------------------------------------------------------------------------
    \1\  See K. Hanson, The Food Assistance National Input-Output 
Multiplier Model and Stimulus Effects of SNAP, Economic Research 
Service, USDA, October 2010, http://www.ers.usda.gov/Publications/
ERR103/ERR103.pdf.
---------------------------------------------------------------------------
    2. Strengthen housing counseling and assistance for renters and 
homeowners, including ensuring access to trusted, independent 
counseling regarding reverse mortgage options.
    3. Expand financial literacy, budgeting, and money management 
services for seniors, as well as protections against financial abuse, 
scams, and exploitation.

    A more detailed overview of NCOA's policy recommendations can be 
found in the following two documents: ``A Blueprint for Increasing the 
Economic Security of Older Americans: Recommendations for the Older 
Americans Act'' and ``Strengthening the Voice of Older Adults and the 
Aging Network: A Vision for the Reauthorized Older Americans Act.''
    I would like to close today with a story from Baltimore, MD. Ms. 
Perry worked hard, played by the rules, paid into the system, and 
thought she was on her way to enjoying a peaceful retirement at age 70. 
But when her daughter encountered mental health issues, Ms. Perry found 
herself raising her two teenage grandchildren. When her pension and 
Social Security were not enough, Ms. Perry got a part-time job. This 
worked well until she landed in the hospital. Without sick pay, Ms. 
Perry's expenses quickly began to mount--mortgage, utility, and credit 
card bills piled up. Unsure how to navigate the complex maze of social 
services, Ms. Perry sought help from the Baltimore CASH Campaign 
(Creating Assets, Savings, and Hope), an NCOA Economic Security Service 
Center. With their assistance, Ms. Perry established personal goals and 
action steps. Coordination of local public and private supports helped 
her receive housing counseling, apply for assistance to pay her 
prescription and utility bills, and get budgeting education and tools. 
Today, Ms. Perry is back on the path to economic security because she 
was able to:

     Prevent a shut-off of her utilities and receive energy 
assistance to help pay her bill.
     Receive a free cell phone and monthly minutes.
     Adjust the terms of her mortgage to more affordable 
payments.
     Find a Medicare Part D plan best suited to her 
prescription needs.
     Free up limited income thanks to the help of SNAP.

    And perhaps most important of all, Ms. Perry has set a positive 
example for her grandchildren. Today, the oldest child is working part-
time to contribute to the household expenses.
    Needless to say, the multiple, complex challenges facing today's 
older Americans with limited resources often do not lend themselves to 
a one-size-fits-all quick fix, and they frequently require coordinated 
public, private, and nonprofit sector solutions. We urge you to 
remember Ms. Perry and the others we have brought voice to today as you 
consider the role government should play in ensuring the economic 
stability of our older adults.
    Thank you again for this opportunity to share our views. We look 
forward to working with you and other members of the committee to 
develop more specific recommendations to help ensure all older adults 
have the opportunity to age with economic security and independence.

    Senator Sanders. Thank you very much, Dr. Nathan.
    I want to divide my questioning up and we're going to have 
plenty. The good news for us is that we have you in front of us 
and Senator Franken and I can ask you a number of questions and 
get into some depth on some of these issues.
    One area I want to focus on is, in fact, the Social 
Security COLA and I want to start with Dr. Kingson on that. 
Doctor, when I'm back in Vermont, many seniors come up to me or 
they telephone our office and they say, we don't understand how 
the Government concludes that there has been no inflation in 
the last 2 years, that we're not getting any COLA--that we 
haven't gotten any COLA in the last 2 years when we are paying 
more for health care costs, we're paying more for prescription 
drugs, more money is coming out of our pockets.
    Are those seniors in Vermont and around the country wrong 
or are their perceptions correct--that, in fact, if you are a 
senior in America today you are paying more out of pocket than 
you used to?
    Mr. Kingson. Those perceptions are correct. The COLA was 
not given, as you know, Senator, in the last 2 years as a 
matter of law. It wasn't a decision by the President or 
Congress. It was a function of a spike in the cost-of-living 
around 2008 when the oil prices spiked.
    It resulted in a very large COLA of 5.8 percent, and since 
then prices went down, COLA was not given and for many seniors 
that's very problematic, and the reality for people on the 
ground is yes, prices are increasing.
    They know their health care costs are going up. They know 
out-of-pocket costs are increasing. They know their fuel costs 
have gone up. So correct. Yes.
    Senator Sanders. Now, as you mentioned in your testimony, 
there are some folks here in Congress who are saying, in fact, 
that the current formulation for COLAs is too generous.
    Mr. Kingson. Yes. Evidently--I'm sorry.
    Senator Sanders. It's too generous. It overstates what 
seniors should be getting and that we have to move in a new 
direction to a so-called chained-CPI which, as you indicated in 
your testimony, would mean significantly lower COLAs for 
seniors in years to come. Would you comment on that please?
    Mr. Kingson. Yes. Evidently, some Members of Congress, some 
members of the press seem to believe that giving seniors 2 
years of no COLAs was giving them too much. And so they now see 
a need for reducing cost-of-living adjustments through this 
technical change.
    I can go into the technical aspects of it but the bottom 
line is there's a fancy technical econometric measure that they 
would put in which would change the way we measure the consumer 
price index.
    Nobody can say, I believe, with a straight face that that's 
being done to really improve the accuracy of the COLA for 
seniors and people with disabilities. If it's done, it's being 
done to cut Social Security, pure and simple. A $112 billion 
would come out of the pockets of seniors--another $24 billion 
out of the pockets of veterans because veterans benefits are 
attached--another $9 billion out of others.
    It would also increase payroll--it would also increase 
general revenue slightly but it would place the burden mostly 
on middle-income and lower-income people by the changes that 
would take place in the tax----
    Senator Sanders. Let me just go right down the line from 
Ms. Ruggles to Dr. Hartmann and Dr. Nathan. What do you think a 
reduction in Social Security benefits would mean for seniors in 
this country?
    Ms. Ruggles.
    Ms. Ruggles. The seniors that I deal with and especially 
the ones that I talk to at Vermont Training and Associates they 
were all terrified, plain and simple--terrified to expect to 
live on the dollars and cents that was in their earnings 
statement which, unfortunately, we no longer get.
    But, you know, their standard of living is they were 
working adults, and all of them that I was at these meetings 
with were working adults. These weren't bums just standing 
around waiting for handouts.
    These were hardworking people that wanted to keep working. 
They knew they couldn't survive on Social Security. Neither can 
I.
    Senator Sanders. Dr. Hartmann.
    Ms. Hartmann. Well, in the survey that we took, we asked 
retirees and near retirees of the four challenges that they 
would face.
    One would be not having enough savings, going to a nursing 
home, not being able to pay for health care. But the single 
thing they were the most afraid of was the possibility that 
Social Security benefits would be cut.
    That's in our full report, which I can send you. I think 
that it is, as you can see from that poverty data and from the 
data on how many people rely on it for such a large part of 
their income, it is simply their anchor and cutting that anchor 
would, I think, be devastating.
    Senator Sanders. Dr. Nathan.
    Ms. Nathan. Yes. I concur with the other panelists. 
Seventy-seven percent of older adults 65 and older rely on 
Social Security and so cuts to Social Security benefits would 
just be devastating. Their out-of-pocket medical costs are 
increasing and as it is now seniors are just in dire straits. 
So the impact would be just tremendously devastating.
    Senator Sanders. Thanks.
    Senator Franken.
    Senator Franken. Thank you, Mr. Chairman.
    This question is for pretty much anyone on the panel. 
Because of the Affordable Care Act, seniors who purchase brand-
name drugs in the donut hole now this year are receiving a 50 
percent discount on those drugs and this has already saved 
Minnesota seniors over $3.5 million in drug costs this year.
    Since medicine is such a huge expense for seniors, it seems 
to me that this provision in the Affordable Care Act is 
critical to seniors' economic security, and as the Affordable 
Care Act continues to be implemented by 2020, the donut hole 
will be eliminated.
    What do you think the effect on seniors would be if health 
care reform were repealed and seniors had to go back to paying 
the full costs of their prescription drugs, in the donut hole?
    Mr. Kingson. Problematic. Very problematic, because it 
would be an increase. It's interesting. Even the 23 percent 
that was mentioned of seniors who are--20 percent are in 
reasonable situations initially. Many of them, as they age, are 
not. And so that closing of the donut hole would in fact pull 
money out of their pockets in the future.
    Senator Franken. The closing of the donut hole----
    Mr. Kingson. The unclosing.
    Senator Franken. Right.
    Mr. Kingson. Sorry. And, yes. No, and one--I can't resist 
this, Senator Franken. You have a marvelous chapter in your 
book on Social Security that everyone should read.
    Senator Franken. Thank you.
    Mr. Kingson. And I just thought I'd have to add that and it 
is my most--is really--I've assigned it to students, and it's 
insightful and it's very correct.
    Senator Franken. Do you assign them to buy the book?
    [Laughter.]
    Mr. Kingson. I'm sorry. I haven't helped your--no, I copy 
it and then I hand it out. I'm sorry.
    Senator Franken. I'd just like to followup on this in terms 
of Mr. Kingson.
    As, you know, we saw in the chart there--and I apologize I 
had to leave. I had an Energy Committee hearing going on at the 
same time. As you get older, you get more and more reliant on 
Social Security.
    Is that because your savings run out? If you had income 
because you were working earlier in your retirement that goes 
away? As you get older, your medical costs tend to go up. So 
this change in the COLA to a chained COLA would sort of 
exacerbate that problem. Am I correct?
    I mean, there we see the chart again. I mean, it seems to 
me that that COLA becomes more and more significant as you get 
older and as you rely more and more upon your Social Security.
    Mr. Kingson. That's correct, sir. And getting the COLA 
right becomes more important too for just those reasons. As 
people age, those who are able to work oftentimes leave work. 
They have higher health care costs often, as you said, and we 
see transitions by losses of spouses--those who were married--
and we also see that the assets of people are not protected 
against inflation or against fluctuations in interest rates.
    The one mechanism--the one thing we have that's largely 
protected against inflation is Social Security.
    It's so critical to keep that and it was so correct for the 
Congress back in 1972 to implement it and say national policy 
should be that no matter how long someone lives the Social 
Security benefit maintains its purchasing power.
    Senator Franken. Because as, obviously, the older you get, 
in a way, the harder things get in the sense of more medical 
costs, loss of income, the draw down of your assets. Many 
people who are now living well into their 90s or into their 
100s probably didn't expect to live that long.
    Ms. Ruggles, thank you for being here today and for your 
story. In your testimony, you said that when you went to your 
appointment at Vermont Associates the staff made you feel 
comfortable.
    Ms. Ruggles. They were amazing. They really were. It was a 
very small office. It was subtly furnished. One of the things 
that amazed me was when I went in I was the only one with that 
appointment. Usually, when you go to a public aid office you're 
told to be there at 11 o'clock and there's 20 other people 
there at 11 o'clock and, you know, 5, 6 hours later you might 
get seen and you might not.
    But my appointment with Vermont Associates was for me only. 
They were very efficient in what they did, placed me where they 
knew that I'd get the skills to match what I would like to do 
and it was really good. They were very wonderful.
    Senator Franken. And they explained at SCSEP that it wasn't 
a handout--that it was a hand up, and--you're aware that SCSEP 
is part of a law called the Older Americans Act?
    Ms. Ruggles. Yes, I am very aware.
    Senator Franken. It's full of similar programs that give 
seniors a so-called hand up. So, I just can't underscore the 
importance of the reauthorization of the Older Americans Act 
and is there anything that anyone here would like to say about 
the Older Americans Act in terms of what we need to do in the 
reauthorization?
    Ms. Ruggles. I have a simple comment, and that is in my 
observation an ounce of prevention is worth a pound of cure. If 
you can make a senior citizen self-sufficient they're not going 
to be on the dole. I was a poster child for her ``One Away'' 
program.
    I really was, one away from everything: one away from 
having my lights shut off, one away from losing my house. The 
fact is if all those things had happened--if I had dropped off 
that one-away cliff I would have been totally dependent on a 
system for food stamps, shelter, whatever. My kids would have 
been with me on my coat tails. I would have been raising 
another generation of welfare kids.
    Instead, I'm showing them what you can do and I'm proud to 
say one of them has now graduated college and the other one's 
on his way.
    Senator Franken. Mr. Chairman, thank you.
    Senator Sanders. Thank you very much.
    Let me start with Dr. Nathan and we'll head west, I guess. 
We talked a little bit about COLAs and CPI but I think the more 
basic question--and some of you have touched upon it--is the 
issue of economic security for seniors and what that means.
    When I read that on average people in the bottom 20 percent 
quintile are living on $7,500 a year, that is almost beyond 
comprehension. I just don't know how people do that. So I want 
you to say a word about that--how does somebody survive on that 
kind of minimal income--and second of all, a more broad 
comment, and I know it varies depending on the location of the 
country that you live in.
    In Vermont, in Minnesota, it gets cold in the winter. 
People spend a lot of money on heat. In other parts of the 
country that may not be so. Food prices vary. But Dr. Nathan, 
talk a little bit about the issue of economic security and what 
is happening to people who are living on $7,000 or $8,000 a 
year.
    Ms. Nathan. Well, Chairman Sanders, anyone living on $7,000 
or less a year, as I stated previously, is living in a state of 
economic deprivation. No one can provide for their basic needs. 
Less, you know, may achieve a certain level of economic 
security on that income. Part of the problem is, as I stated 
earlier, is the way that we have such an outmoded measure for 
poverty.
    The Federal poverty level in 2011 for a single person was a 
little over $10,000 a year and that is extremely low. So we're 
talking about income that's $3,000 less than that. From the 
standpoint of economic security, it would be impossible for 
someone to achieve that on that income and when you look at the 
geographic differences, $7,000 a year in San Francisco is even 
worse.
    Senator Sanders. Thank you very much.
    Dr. Hartmann, we're talking about millions of people living 
on really minimal income so these are the most vulnerable 
people in our country who have health care needs, can't get 
around. How do they survive and what are we talking about when 
we talk about economic security?
    Ms. Hartmann. Well, I think that for very low-income people 
I would hope that they have found subsidized elder housing. 
What many older people do with very low incomes is live with 
other family members. They cannot afford to live in their own 
household. Public housing is extremely important at such low 
incomes. So any programs that can increase housing assistance 
for elders are very, very important.
    About 8 percent of our seniors are on food stamps so they 
are receiving help through food stamps. As you know, they may 
also be receiving help through SSI if their Social Security was 
inadequate and would have been below that level.
    So we do, fortunately, have programs to assist people and 
not all of these assistance programs are shown in the income 
data. The poverty data is outmoded for many reasons. But among 
the poorest elders are those who live alone and who are the 
longest lived which, of course, is many women. At older ages, 
most men are actually still married.
    But at older ages most women are not married. They are not 
able to remarry. There are fewer men around and they're living 
alone, and among the most deprived are older women.
    Senator Sanders. Dr. Hartmann, what you are saying is that 
many of the lowest income seniors are dependent on one or 
another Federal program whether it's affordable housing or food 
stamps. Let me ask you the simple question. What happens if 
those programs are cut?
    Ms. Hartmann. Well, obviously, a complete disaster. People 
can try to go to food pantries, rely on charity from friends 
and neighbors and, of course, people at churches, friends and 
neighbors are going to try to do as much as they can. But most 
of those groups are actually relying on the Federal programs to 
give assistance.
    If you drive Meals on Wheels, you're volunteering your time 
but the meal is coming from a Federal program. So I think as 
much as we would call upon our volunteers to help, if those 
Federal programs disappear it would be very, very difficult.
    Senator Sanders. Ms. Ruggles, you live in the northeast, 
Canaan, which is a very rural low-income area in the State of 
Vermont. What is your observation about seniors in their 
struggles economically?
    Ms. Ruggles. I've seen seniors give away or put down their 
pets because they can't afford to feed them. I've seen seniors 
close off all but their living room and use the oven to heat--
or kitchen--to heat the house and turn off one utility in favor 
of the other. They don't use lights. They go to bed when it's 
dark and they get up when it's light. If it's gray outside too 
bad. They don't have the money for electricity.
    I've known a lot of seniors in my area who have gotten 
together. One will give up their house and go live with 
another. You just start giving things up. You just peel things 
away that you've gotten used to all your life.
    You don't shop for new clothes. You don't get your glasses 
fixed. You're supposed to take a medication 7 days a week so 
you take it four so you can stretch it out. You decide which is 
the most important medicine and you don't get the others 
refilled.
    I know one lady who's supposed to have an inhaler with her 
all the time and she doesn't. Then I've seen her go to the 
hospital twice in the last 3 years. It gets worse.
    Senator Sanders. Well, the point of this hearing is to 
raise consciousness just on those issues because I think the 
stories that you and others have told are really, to a 
significant degree, being pushed underneath the rug.
    We have a lot of seniors in urban areas, in rural areas, 
who are desperately, desperately trying to maintain their 
dignity and hang on, and I don't think we know that as a 
Nation. We haven't heard enough about that. And I think until 
we know that it just becomes too easy for folks to stand up and 
say, ``well, we're going to cut Social Security'' and yes, 
raising the lower eligibility level for Medicare a few years--
what's the big problem with that and cut back on Medicaid and 
the Meals on Wheels program--we can tighten that up a little 
bit. I think they don't know what the human cost is of that. So 
I thank you very much----
    Ms. Ruggles. Thank you.
    Senator Sanders [continuing]. Ms. Ruggles, for your general 
testimony and for your point.
    Dr. Kingson.
    Mr. Kingson. I just think you're so right, Senator. I think 
we don't see people. There's an amnesia that's so problematic 
today. We don't remember things. We don't remember the 
poorhouse.
    We don't remember what the world was like before we had 
Social Security and Medicare, and I'm extremely concerned about 
the bottom 20 percent but I'm also concerned that we have a 
crisis coming down the road among Baby Boom cohorts and people 
who follow.
    In many ways, that's what we're fighting for too--to make 
sure we have a retirement system that works for them. And we 
have people who've lost housing, lost equity, lost pension 
protection, lost jobs or not seen their wages increase, moving 
into retirement and they don't have a lot of time to make up 
that. And part of what's happening, I think, being middle 
class--implies a sense of security--a sense that you can deal 
with the difficult times that might happen but still be 
basically OK.
    We are squeezing the middle class and we are shrinking the 
middle class, pulling that security away not only from the very 
poor who never had it but from the hardworking people and even 
the upper middle class.
    It's a world that we have to deal with and it's for that 
reason I'm just pleased to be here and proud to be here, 
because I know you're asking the right questions.
    Senator Sanders. Thank you very much.
    Senator Franken.
    Senator Franken. I'm glad that, Ms. Hartmann, you brought 
up the fact that very often it's these churches who are doing 
the work for Meals on Wheels or programs like it. But a lot of 
people don't realize that that is coming--that it is part of 
the Older Americans Act. That is the funding that's coming 
through.
    It enables the churches to do that work and to do a 
wonderful job as they do with many volunteers. So it's really 
leveraging--the Older Americans Act in many ways is such a good 
use of funds because it enables seniors to stay in their homes 
and not have to go to a nursing home and which is much more 
expensive to everybody concerned and not what seniors want to 
do.
    So I thank you for bringing that up and I know that, Ms. 
Nathan, that the National Council on Aging has just launched an 
Older Americans Act support drive to encourage Members of 
Congress to commit to strengthening the Older Americans Act 
during this year's reauthorization.
    How many Members of Congress have joined the support drive?
    Ms. Nathan. So far, Senator, Chairman Sanders and Aging 
Committee Chairman Kohl have provided statements of support and 
so will----
    Senator Franken. Well, add me to that list, would you 
please?
    Ms. Nathan. We're delighted to do that. Thank you very 
much.
    Senator Franken. This has been a big part of what I've been 
doing in Minnesota in terms of listening sessions, et cetera, 
and I'm committed to strengthening the Older Americans Act.
    I plan to introduce legislation called the Home Care 
Consumer Bill of Rights that would put in place additional 
protections for seniors who receive home and community-based 
services. My bill would expand the long-term care ombudsman 
program to serve seniors in their homes as well as guarantee 
that every senior who receives home and community-based 
services is protected by the Home Care Bill of Rights as they 
are in Minnesota. Does that sound good to you?
    Ms. Nathan. That sounds wonderful.
    Senator Franken. OK.
    Ms. Nathan. We're well aware of the work that you've done 
with your constituents and your recommendations to strengthen 
and improve the Older Americans Act and we deeply appreciate 
your commitment and support.
    Senator Franken. Thank you.
    Mr. Kingson, I think one of the parts--and it's been 
touched on a couple times thus far--but the collapse of the 
real estate market has had a real effect on seniors because 
traditionally seniors have had this sort of nest egg, in a 
sense, in their home and were push come to shove they could 
sell their home. The housing market today is such that that 
nest egg has disappeared in many ways, and some seniors are 
even under water in their mortgage. So that option is gone.
    So we are really talking about the most vulnerable 
Americans now at a very vulnerable age as they get older and 
older, and as we talk about this chained-CPI how much did you 
say that would take a year from someone who is 65 and then 20 
years later? How much do you lose in 20 years?
    Mr. Kingson. In the testimony, I used an example of a 
hypothetical woman who turns 65 today and she's worked all her 
life. She's a legal secretary. You move forward in time. Ten 
years out--say she has a benefit of around $15,000. Ten years 
out, she loses about $600 that year.
    Twenty years out she loses about a $1,000 that year--$900 
or a $1,000, and further out she loses about $1,400 a year. 
That's in real dollars adjusted for inflation.
    Now, Social Security benefits are very modest. The average 
older person--the average retiree receives, as you know, about 
$14,000 a year in Social Security.
    Senator Franken. And as you said, as you get older your 
assets disappear and you're less likely to be earning. You're 
more likely to be using health care services that have some 
out-of-pocket.
    So we are really asking, if we do this for the most 
vulnerable Americans to be sort of the ones that are absorbing 
the hits toward reducing our deficits and creating long----
    Mr. Kingson. We would be asking many vulnerable people 
including middle-class people and yes, that we would be doing 
that. Now, they propose a birthday bump, perhaps increasing the 
benefit by 1 percent. The Bowles-Simpson proposal included a 1, 
2, 3, 5 percent increase over several years at age 80 to 85 or 
so. It doesn't do the job. The cumulative impact on the woman 
that I put forward, or a typical beneficiary, if they live to 
95 they're losing about $24,000 in real income in that period 
total.
    Senator Franken. This is something that we're doing at a 
time when there just is a refusal to ask people who, in our 
economy, are doing extraordinarily well. And there's an 
absolute refusal on the part of some, to ask those people 
themselves to make any kind of contribution toward the 
sustainability of our debt even while we're really setting up a 
construct where the most vulnerable people in our country will 
be asked to give.
    They'll be asked to contribute to our fiscal sustainability 
and not those who are wildly, wildly successful and wildly 
successful because they've lived in this country that has 
provided them opportunity and provided the infrastructure for 
them and provided the legal apparatus and all the stuff that 
those of us who have done well in our society have benefited 
from.
    Mr. Kingson. We seem to forget that we've moved forward on 
the shoulders of others and other generations, and that part of 
those shoulders involves having good education, having a good 
Social Security system and health care, and the pulling apart 
of that is almost--it's mindless in the sense that we have more 
and more insecurity in our society. The last thing we want to 
do is undermine these systems and, particularly, ask the most 
vulnerable to pay for it.
    Senator Franken. I thank the panel for all of your 
testimony. I thank the chairman for calling this very important 
hearing. Thank you.
    Senator Sanders. Thank you, Senator Franken, for all the 
work you're doing for seniors and for your contributions today.
    Let me just conclude, picking up on a point that Senator 
Franken made. A number of wonderful people have pointed out 
that how you judge a society is how you respond to the needs of 
the weakest, the most vulnerable, and the population that we're 
talking about today, when people get 70, 80, 90, they are 
vulnerable.
    It seems to me that at a time when the wealthiest people in 
this country are doing very, very well--at a time when our 
deficit was caused by unpaid wars and tax breaks for folks who 
didn't need the money, and a Wall Street bailout and so forth, 
I think we have to take a very hard look at the morality and 
the economics of balancing the budget on elderly people and 
some of the most vulnerable people in our society. And I think 
that's the point that many of you have made this morning and I 
thank you very much for your testimony.
    What we are trying to do is raise consciousness on the 
issue--that in this recession many, many seniors are hurting 
and we cannot simply balance the budget on their backs. So I 
thank you very much for your contributions.
    Thank you. The subcommittee meeting is adjourned.
    [Additional material follows.]

                          ADDITIONAL MATERIAL

    Prepared Statement of John Taylor, President and CEO, National 
                Community Reinvestment Coalition (NCRC)

    As president and CEO of the 600 community-based organizations that 
make up the National Community Reinvestment Coalition, I thank the 
Subcommittee on Primary Health and Aging for the opportunity to submit 
written testimony on the economic security of older Americans in the 
aftermath of the Great Recession.
    The National Community Reinvestment Coalition (NCRC) is committed 
to promoting fair lending and basic banking services for low- and 
middle-income communities. NCRC advances policies and programs designed 
to build and preserve wealth for economically vulnerable Americans. In 
2010, NCRC launched National Neighbors Silver, a multi-year initiative 
to promote affordable, accessible and fair housing for older adults 
through organizing, advocacy, direct service and outreach.
    NCRC urges the committee to examine current housing trends as it 
considers policy opportunities to enhance financial security for 
today's seniors and future retirees. The 2007 collapse of the housing 
market diminished economic stability for older Americans across the 
income spectrum, among both homeowners and renters.
    We believe that housing is at the core of building and maintaining 
economic security for elders. Today more than 13 million older adults 
are living on the edge--with incomes less than $22,000 per year.\1\ 
Research shows that increasing housing costs are one of the three 
primary contributors of rising economic insecurity among older 
adults.\2\ As such, ensuring that today's seniors and future 
generations are able to age in place requires affordable, accessible 
and fair housing options. My testimony will shed light on the silent 
housing crisis that plagues our aging communities and undermines the 
economic security of low- and middle-income older Americans.
---------------------------------------------------------------------------
    \1\ National Council on Aging (2011) ``Economic Security: Fact 
Sheet.'' (NCOA: Washington, DC)
    \2\ Meschede, T., Sullivan, L., Shapiro, T. (2011) ``From Bad to 
Worse: Senior Economic Insecurity on the Rise.'' (Institute for Assets 
and Social Policy: Boston, MA)
---------------------------------------------------------------------------
    Older homeowners suffer from lost value, cost burden and risk of 
foreclosure. Due to diminished home value and increased cost burden, 
the era of home ownership as a hallmark of retirement security is no 
more. Lost home equity is a trademark of the recession, affecting many 
older Americans. In today's economic climate, regardless of mortgage 
status, seniors experience burdensome housing costs as a result of 
diminished incomes, utility expenses, property taxes, the need for home 
maintenance or all of these. Among the most vulnerable are older adults 
at risk for delinquency or foreclosure. In sum, the recession disturbed 
both the wealth of older homeowners and their ability to afford basic 
needs.
    Prior to the Great Recession, older adults and their families could 
depend on home equity in the event of catastrophic costs or to 
supplement fixed incomes in retirement. Americans of all ages counted 
on the conventional wisdom that the home would be a source of income 
when necessary.\3\ Recent analysis shows that 10.9 million homeowners 
(22.5 percent) with a mortgage have negative equity in their homes.\4\ 
And older adults are among those most affected. In fact, according to a 
recent study by the Federal Reserve Board, this age group experienced 
more loss in wealth than their younger counterparts. Median loss of 
wealth among those ages 55-64 totaled $13,700 between 2007-9. The 
report states, ``Declines in home equity were an important driver of 
decreases in wealth.'' \5\
---------------------------------------------------------------------------
    \3\  Carr, J.H., Anacker, K.B. and M.L. Mulcahy (2011) ``The 
Foreclosure Crisis and Its Impact on Communities of Color: Research and 
Solutions.'' (National Community Reinvestment Coalition: Washington, 
DC)
    \4\  CoreLogic (2011) ``New CoreLogi Data Reveals Q2 Negative 
Equity Declines in Hardest Hit Markets and 8 Million Negative Equity 
Borrowers Have Above Market Rates.'' (CoreLogic: Santa Ana, CA)
    \5\  Bricker, J., Bucks, B., Kennickell, A., Mach, T. and K. Moore 
(2011) ``Surveying the Aftermath of the Storm: Changes in Family 
Finances from 2007 to 2009.'' (Board of Governors, Federal Reserve 
System: Washington, DC)
---------------------------------------------------------------------------
    Research further illustrates that housing costs are generally lower 
for those who own a home outright as opposed to renting or paying a 
mortgage, creating greater economic stability in retirement.\6\ Yet, 
new research by AARP demonstrates that housing cost burden, defined as 
spending more than 30 percent of one's income on housing, persists 
among homeowners with no mortgage, particularly those who are low-
income. In 2009, 49 percent of these owners (age 50+) with incomes just 
under $23,000 experienced housing cost burden.\7\
---------------------------------------------------------------------------
    \6\ Wider Opportunities for Women and the Gerontology Institute at 
the University of Massachusetts Boston (2006) ``The WOW GI National 
Elder Economic Security Standard: A Methodology to Determine Economic 
Security for Elders.'' (Wider Opportunities for Women: Washington, DC)
    \7\  Harrell, R. (2011) ``Housing for Older Adults: The Impacts of 
the Recession.'' (AARP: Washington, DC)
---------------------------------------------------------------------------
    The trends are far worse for older homeowners still paying a 
mortgage. AARP states,

          ``As of 2009 . . . For many, a higher rate reset in an 
        adjustable-rate mortgage, an increase in energy costs, or a 
        reduction in income became triggers that made a once affordable 
        home unaffordable.''

    Among adults age 65 and older, 67 percent of those still paying a 
mortgage were housing burdened. This reality is far more disturbing for 
older Americans with low-incomes. For those with annual incomes under 
about $23,000 who were still paying a mortgage, 96 percent experienced 
housing cost burden.\8\ And for this population the risk of foreclosure 
looms large.
---------------------------------------------------------------------------
    \8\  Harrell, R. (2011) ``Housing for Older Adults: The Impacts of 
the Recession.'' (AARP: Washington, DC)
---------------------------------------------------------------------------
    A recent white paper released by NCRC reports that 10.5 million 
properties went into foreclosure between January 2007 and May 2011. The 
total equity lost to families as a result of this foreclosure crisis is 
estimated at $5.6 trillion.\9\ Limited data is currently available on 
how foreclosure directly affects the older population. We know that 
close to 50,000 homeowners age 50+ were in foreclosure at the end of 
2007 and nearly 636,000 were under water in their homes.\10\
---------------------------------------------------------------------------
    \9\  Carr, J.H., Anacker, K.B. and M.L. Mulcahy (2011) ``The 
Foreclosure Crisis and Its Impact on Communities of Color: Research and 
Solutions.'' (National Community Reinvestment Coalition: Washington, 
DC)
    \10\  Harrell, R. (2011) ``Housing for Older Adults: The Impacts of 
the Recession.'' (AARP: Washington, DC)
---------------------------------------------------------------------------
    We anticipate that the number of older adults affected by 
foreclosure increased during the recession's slump. Loss of the home is 
detrimental to the economic security of older adults. For those unable 
to afford housing, homelessness, nursing home placement or reliance on 
community networks are the only remaining options--further stretching 
American families and available resources.
    Housing costs and lack of affordable options lead to economic 
insecurity for older renters. Older renters also suffered as a result 
of the Great Recession. High housing costs coupled with lack of 
affordable housing contribute to a difficult market for senior renters. 
Like older homeowners, those who rent face significant housing cost 
burden. According to AARP, ``As of 2009, 28 percent of renters age 50+ 
use at least half of their income for housing.'' \11\ For older adults 
living on fixed incomes, high housing costs means little income remains 
for covering the cost of basic needs--including food, health care, 
transportation and other essentials.
---------------------------------------------------------------------------
    \11\  Harrell, R. (2011) ``Housing for Older Adults: The Impacts of 
the Recession.'' (AARP: Washington, DC)
---------------------------------------------------------------------------
    Analysis by Wider Opportunities for Women (WOW) demonstrates that 
low-
income older adults who lack access to subsidized housing assistance 
struggle to meet a level of basic economic security--despite receipt of 
benefits to cover health care, food and other costs.\12\ Today, over 2 
million low- and middle-income seniors rely on subsidized housing. Yet, 
the need for affordable senior housing far exceeds what is 
available.\13\
---------------------------------------------------------------------------
    \12\  Wider Opportunities for Women (2008; 2009; 2010; 2011) 
``Elders Living on the Edge'' Series for CA, PA, IL, WI, MN, CT, NJ, 
MI, NY, WV, NM, CO and IA. (Wider Opportunities for Women: Washington, 
DC)
    \13\  Minnix, L. (2011) ``Written Testimony for the Record to the 
Senate Special Committee on Aging on the Older Americans Act 
Reauthorization.'' (LeadingAge: Washington, DC)
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    The Section 202 Housing for the Elderly (Section 202) operated by 
the Department of Housing and Urban Development (HUD) offers a clear 
example of this trend. Section 202 is one of five assisted housing 
programs designated for older adults and provides the largest share of 
HUD housing available to this population. A 2006 study suggests that 
about 10 older adults are on waiting lists for every single unit of 
subsidized housing that becomes available through the Section 202.\14\ 
Nearly 263,000 Section 202 units are currently available to older 
adults.\15\ As a result of available funding, Section 202 has produced 
less than 4,000 units per year--far less than the 10,000 per year 
suggested by HUD each year for the next 10-15 years to meet the growing 
need.\16\
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    \14\ National Low-Income Housing Coalition (2011) ``2011 Advocates' 
Guide.'' (NLIHC: Washington, DC)
    \15\  Perl, L. (2010) ``Section 202 and Other HUD Rental Housing 
Programs for Low-Income Elderly Residents.'' (Congressional Research 
Service: Washington, DC)
    \16\  National Low-Income Housing Coalition, ``2011 Advocates' 
Guide.'' (NLIHC: Washington, DC)
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    Older adults are disproportionately vulnerable to lending and 
housing discrimination. In times of economic stress and financial 
hardship, the threat of fraud and discrimination becomes more 
pronounced. Older consumers are often targeted with predatory and toxic 
financial services tied to refinancing, reverse mortgages and other 
housing products. Seniors are at increased risk for financial abuse due 
to the perception that they are more likely to have access to home 
equity or other forms of wealth. In addition, older adults are more 
vulnerable as a result of social isolation and lack of knowledge on the 
prevalence of scams and targeted discrimination.
    A 2003 NCRC report illustrates that older adults and communities of 
color were direct targets of abusive lending and pricing disparities in 
an analysis of subprime lending in 10 metropolitan areas. After 
accounting for creditworthiness and housing market characteristics, 
neighborhoods with large percentages of older adults were more likely 
than communities with a lower proportion of older adults to receive 
high cost loans. The reality that we reported then remains true in 
today's economy: ``The disproportionate amount of subprime refinance 
lending in predominantly elderly neighborhoods imperils the stability 
of long-term wealth in communities and the possibilities of the elderly 
passing their wealth to the next generation.'' \17\
---------------------------------------------------------------------------
    \17\ National Community Reinvestment Coalition (2003) ``The Broken 
Credit System: Discrimination and Unequal Access to Affordable Loans by 
Race and Age.'' (NCRC: Washington, DC).
---------------------------------------------------------------------------
    To prepare for an aging population, we must prioritize housing 
needs. We expect that the housing trends shared in this testimony will 
worsen, particularly given the expected growth of the aging population. 
By 2030, the number of older Americans is expected to grow from 35 
million to 72 million, comprising nearly 20 percent of the total U.S. 
population.\18\ Increasing reliance on Social Security benefits, the 
shrinking availability of private pensions and recent losses to 
individual retirement accounts resulting from the recession will likely 
lead to mounting economic vulnerability among the growing generation of 
older Americans. In light of this stark reality, solutions that 
increase the availability of affordable, accessible and fair housing 
for older adults must be pursued. To this end, NCRC recommends the 
following:
---------------------------------------------------------------------------
    \18\ Federal Interagency Forum on Aging-Related Statistics (2011) 
``Older Americans 2010: Key Indicators of Well-Being.'' (Federal 
Interagency Forum on Aging-Related Statistics: Washington, DC)

     Restore Housing Counseling Funding in the fiscal year 2012 
Budget. Supported by HUD, housing counseling services help individuals 
navigate a complicated market on topics ranging from mortgage 
delinquency and default resolution to accessing safe reverse mortgages. 
Housing counseling has proved a critical resource during the 
foreclosure crisis and must be maintained. The $88 million devoted to 
these services must be restored in the fiscal year 2012 budget.
     Protect Affordable Housing for Older Americans. Seniors' 
access to affordable housing units is at risk in ongoing debt 
negotiations. Housing programs operated by HUD and other Federal 
agencies are further threatened in the event of sequestration should 
the Joint Committee on Deficit Reduction fail to meet its established 
goals. Affordable housing programs should be funded at no less than 
fiscal year 2010 levels to ensure an appropriate stock of affordable 
housing is available for today and for future generations of older 
adults.
     Expedite Database Development on Foreclosure Trends and 
HMDA Enhancements. One charge of the newly developed Consumer Financial 
Protection Bureau (CFPB) and HUD involves the development of a database 
allowing the public to track foreclosure trends by census tract. 
Database development should be accelerated to better understand the 
affects of foreclosure in census tracts with concentrations of older 
adults in the aftermath of the Great Recession. In addition, the CFPB 
is responsible for enhancing the Home Mortgage Disclosure Act (HMDA) to 
include the age of the borrower as well as more information on loan 
terms and conditions. The CFPB should expeditiously propose changes to 
HMDA so that researchers, agencies, stakeholders and the general public 
can track whether older Americans continue to receive loans with 
onerous terms and conditions.
     Establish ``elderliness'' or ``older Americans'' a 
Protected Class of the Fair Housing Act (Title VIII). To date, no 
Federal protections against discrimination on the basis of age exist in 
the fair housing or fair lending arena. Federal acknowledgement of 
older adults as a protected class will strengthen the ability of local 
advocates and service providers to protect seniors from financial 
abuses tied to housing.
     Reconvene a Bi-Partisan Commission to Explore Senior 
Housing Trends. In 2002, the Commission on Affordable Housing and 
Health Facility Needs for Seniors in the 21st Century released a 
summative analysis on the Nation's growing aging population and the 
lack of affordable housing, A Quiet Crisis in America. The affect of 
the Great Recession on housing for older adults has likely worsened 
this quiet crisis. We recommend establishing a bi-partisan commission 
to re-examine senior housing trends to both increase the visibility of 
this crisis and to devise cost-effective solutions for the long-term. 
This bi-partisan commission should assess how cost burdens for older 
renters and homeowners can be most effectively addressed with either 
demand-side interventions (more Section 8 vouchers) and/or supply side 
interventions (increasing the supply of affordable renter housing, for 
example through construction of Section 202 units).
    The policy recommendations shared above represent critical steps 
forward for the short-term. In partnership with national allies and 
community partners--in both the private and public sectors--NCRC will 
develop a comprehensive national agenda to promote affordable, 
accessible and fair housing for older adults today and into the future.
    America in the 21st century must show that it is committed to 
preserving the quality of life of those citizens who have fought our 
wars, built our economy and paved the way for future generations of 
Americans to enjoy this great country. One measure of a great country 
is in how it protects and insures the safety, security and quality of 
life of those who have sacrificed their lives to do the same for the 
rest of their fellow citizens. Our seniors should be referred, 
respected and cherished.
    In closing, I thank you for the opportunity to provide written 
testimony and look forward to working with you to build economic 
security and opportunity for our Nation's elders.

NCOA--A Blueprint for Increasing the Economic Security of Older Adults: 
               Reauthorization of the Older Americans Act
               13 million seniors on the edge of poverty
    The recent recession had a devastating impact on millions of older 
Americans. Lost jobs, savings, and income have pushed millions to the 
brink of poverty--with little time to rebound.
    Today, over 13 million older Americans are economically insecure, 
living on only $22,000 or less each year. Too often, this means 
choosing between paying for food, housing, utilities, or medicine.
    The Older Americans Act (OAA) is the primary vehicle for delivering 
social, nutrition, and home and community-based services to seniors and 
their caregivers. It authorizes a wide array of services through a 
national network of 56 State units on aging, 629 area agencies on 
aging, and nearly 20,000 service providers. Although most OAA services 
are available to all older adults, providers are required to target 
those in greatest social and economic need.
    The OAA is due for reauthorization in 2011. This reauthorization 
presents a timely opportunity to address elder economic security 
concerns and make lasting, strategic changes to ensure that all older 
adults are able to access the resources they need to be economically 
secure.
    With funding from the Atlantic Philanthropies, the National Council 
on Aging (NCOA) has developed a set of recommendations to strengthen 
the OAA to ensure that the aging network is operating squarely within a 
framework of economic security. The blueprint advances many innovative 
practices and uses of an economic security framework already adopted by 
the network, such as through NCOA's Economic Security Service Centers 
and Wider Opportunities for Women's (WOW) Elder Economic Security 
Initiative.

                 RECOMMENDATIONS TO STRENGTHEN THE OAA

    1. Establish a goal of economic security by explicitly stating 
economic security as an objective of the OAA, defining what economic 
security means for older adults, and allowing State and local agencies 
to use local measures to target older adults most in need, plan 
effectively, and evaluate impact.

     Declare economic security to be a goal of the OAA and 
define what this means for the aging services network and the older 
adults it serves.
     Allow States, area agencies on aging, and other aging 
service providers to use a local measure of economic security in 
planning efforts and provide training and technical assistance to 
enable area agencies and other local aging service providers to use 
such measures to target those most in economic need and assess older 
adults' progress toward achieving economic security.

    2. Better coordinate existing resources at the Federal, State, and 
local levels, including implementing a holistic, person-centered 
approach to economic casework; empowering older adults to improve their 
economic status; and forging new local partnerships with organizations 
such as certified nonprofit debt management, home equity, bankruptcy, 
and foreclosure mitigation providers.

     Authorize the Assistant Secretary for Aging to provide 
training, technical assistance, and funding to support the local 
adoption of person-centered economic casework approaches to provide 
assistance to older adults experiencing economic distress, and fund an 
evaluation to assess the efficacy of this approach in moving older 
adults closer to a goal of economic security.

     Strengthen the aging network's role as a leader and 
convener of community resources to ensure that a full range of partners 
are engaged in the collaborative development, implementation, and 
oversight of economic security efforts. Aging partnerships should place 
additional emphasis on the engagement of trusted, certified leaders in 
the field of financial services.
     Charge the Interagency Coordinating Committee on Aging 
with:

          Creating an inventory of all Federal programs aimed 
        at reducing poverty and increasing the economic security of 
        older adults.
          Analyzing program effectiveness against a goal of 
        economic security that draws on a concrete measure, using a 
        methodology such as WOW's Elder Economic Security Standard 
        Index.
          Recommending and drafting the necessary regulatory 
        and legislative changes to increase economic security of 
        vulnerable and economically disadvantaged older adults.
          Issuing interim and final reports to the 
        Administration and Congress documenting and presenting the 
        results of this work.

    3. Evaluate and replicate economic casework strategies by funding a 
national demonstration.

     Authorize the Assistant Secretary, in cooperation with 
related Federal agency partners administering relevant Federal programs 
(Department of Labor, Housing & Urban Development, Health & Human 
Services, Social Security Administration, Department of Agriculture, 
Neighbor-Works, Treasury, Consumer Financial Protection Bureau, Federal 
Reserve, CNS) to make a grant to or enter into a contract with a 
qualified, experienced entity to establish a National Economic Security 
Center Demonstration, which shall:

          Maintain and update web-based decision support and 
        assessment tools and integrated, person-centered systems 
        designed to inform and assist older individuals experiencing 
        economic distress.
          Utilize cost-effective strategies to find older 
        individuals with greatest economic need.
          Create and support efforts for Aging and Disability 
        Resource Centers, Area Agencies on Aging, Senior Community 
        Service Employment Programs, and other public and private State 
        and community-based organizations, including faith-based 
        organizations and coalitions, to serve as economic security 
        centers.
          Develop and maintain an information clearinghouse on 
        best practices and cost-effective methods for providing person-
        centered economic casework.
          Provide, in collaboration with related Federal agency 
        partners administering the Federal programs, training and 
        technical assistance to local aging network providers on 
        effective economic casework strategies.
          Evaluate the systems change required to implement the 
        approach and return on investment.

                              TIME TO ACT

    Achieving economic security is essential to aging in place with 
dignity. With the baby boom generation now entering retirement, the 
time to solve this problem is now. The aging services and programs 
authorized under the OAA should be designed, supported, delivered, and 
evaluated in relation to the goal of economic security. Accomplishing 
this necessitates that economic security be appropriately defined and 
realistically measured. NCOA is committed to playing a leadership role 
as we collectively move these critical provisions forward.
   National Council on Aging (NCOA)*--Economic Security (Fact Sheet)
    Retirement is not ``golden'' for all older adults. Nearly one-third 
of Americans aged 60+ is economically insecure--living at or below 200 
percent of the Federal poverty level ($21,660 per year for a single 
person). These older adults struggle each day with rising housing and 
health care bills, inadequate nutrition, lack access to transportation, 
diminished savings, and job loss. For older adults who are above the 
poverty level, one major adverse life event can change today's 
realities into tomorrow's troubles.
---------------------------------------------------------------------------
    * The National Council on Aging is a nonprofit service and advocacy 
organization head-
quartered in Washington, DC. NCOA is a national voice for older 
Americans--especially those who are vulnerable and disadvantaged--and 
the community organizations that serve them. It brings together 
nonprofit organizations and businesses, and government to develop 
creative solutions that improve the lives of all older adults. NCOA 
works with thousands of organizations across the country to help 
seniors find jobs and benefits, improve health, live independently and 
remain active in their communities. For more information, please visit 
www.NCOA.org.
---------------------------------------------------------------------------
                            POVERTY MEASURES

     Seventy-seven percent of adults aged 65+ depend on Social 
Security for all or some of their monthly income, and almost 20 percent 
live at less than 150 percent of Federal poverty level (FPL), $16,245 
annually for a single person.
     The FPL does not account for the rising cost of living 
seniors experience as they age, which can include illness, loss of a 
spouse, or care for a disabled spouse, adult dependent child, or 
grandchildren.
     More accurate measures--including Wider Opportunities for 
Women's Elder Economic Security Index and the Institute on Assets and 
Social Policy's Senior Financial Stability Index--show millions of 
older adults struggling to meet their monthly expenses, even though 
they're not considered ``poor'' because they live above FPL of $10,400 
for a single elder.

                          INCOME & EMPLOYMENT

     Many seniors rely on fixed incomes, receiving on average 
$1,357 in Social Security benefits, $650 in Supplemental Security 
Income, and/or $297 in public assistance each month.
     Women fare worse than men, with 38 percent economically 
disadvantaged compared to 23 percent of men.

          White women aged 65+ comprise 50 percent of those 
        living below poverty.
          50 percent of African-American women aged 65+ have 
        incomes at or below 200 percent of FPL.

     Even after decades of outreach efforts, large percentages 
of low-income seniors who are eligible for important public benefits 
are not receiving them. (National Center for Benefits Outreach and 
Enrollment) In fact, only 1.7 percent of seniors received public 
benefits in 2009. (American Community Survey, 9/28/10)
     In 2009, 27.l million Americans aged 55+ were employed, 
and 1.9 million were actively seeking work. In May 2010, 60 percent of 
unemployed older workers had been out of work for 6 months or longer, 
and 43 percent had been without a job for more than a year. (CNN, 7/2/
10)
     Weekly earnings vary by age and gender. In the 55-64 age 
group, men have the highest weekly earnings at $953, while women earn 
$730. Median weekly earnings for men aged 65+ are $686 and $534 for 
women. (Bureau of Labor Statistics, 7/20/10)

                             DEBT & SAVINGS

     One-third of senior households has no money left over each 
month or is in debt . after meeting essential expenses. (Institute on 
Assets and Social Policy, 2009)
     More than half of all the senior households do not have 
sufficient financial resources to meet median projected expenses based 
on their current financial net worth, projected Social Security, and 
pension income.
     Ninety-six percent of Americans aged 65-69 with incomes 
below the poverty threshold possess retirement savings of less than 
$10,000. (Institute on Assets and Social Policy, 2009)
     More than half of people aged 50+ who carry debt spend 
most of their monthly income paying it down.
     In 2008, the average credit card debt among adults aged 
65+ was $10,235. Commonly cited reasons for debt were to pay necessary 
living expenses and medical costs.
     Fourteen percent of adults aged 65+ face retirement with 
negative net worth, contributing to a rise in bankruptcies that has 
grown at the fastest pace ever. (Aging and Bankruptcy, U.S. Courts)

                           HEALTH & NUTRITION

     Seventeen percent of U.S. households with an elderly 
member were categorized as food insecure in 2008. These households were 
uncertain of having, or were unable to acquire, enough food to meet the 
needs of all members due to insufficient money or other resources. 
(U.S. Department of Agriculture, 2008)
     More than one-third of African-American and Latino seniors 
pay out-of-pocket health expenses that consume 15 percent or more of 
their income.

                                HOUSING

     Americans aged 50+ represent 28 percent of all 
delinquencies and foreclosures in the current crisis. (AARP)
     Three out of five senior households of color use more than 
30 percent of their income to pay housing costs, the U.S. Department of 
Housing & Urban Development's definition for unaffordable housing.
     Forty-four percent of African-American and thirty-seven 
percent of Latino seniors either rent or have no home equity.

                              NCOA'S ROLE

    NCOA offers several programs that provide hope for economically 
insecure older adults.
Economic Security Initiative
    We offer programs in 12 communities to help economically 
disadvantaged older adults cut through red tape and create a plan to 
build their own economic stability. Trained staff provide one-on-one 
assistance to help seniors find job training; help with health care, 
housing, and nutrition programs; and financial planning.
National Center for Benefits Outreach and Enrollment
    The center helps organizations enroll seniors with limited means 
and younger adults with disabilities in a wide range of benefits 
programs. NCOA's online screening tool BenefitsCheckUp.org has helped 
more than 2.6 million people discover eligibility for more than $9 
billion in annual benefits.
Senior Community Service Employment Program (SCSEP)
    SCSEP offers valuable on-the-job training and job placement that 
helps older workers, particularly those who are low-income or 
disadvantaged, build job skills and confidence. NCOA currently operates 
27 SCSEP projects in 11 States. SCSEP is funded by a grant from the 
U.S. Department of Labor.

                     ONE AWAY--STORIES OF STRUGGLE

                                GEORGIA

    I worked 15 yrs. for AIG. Put my 401k in their stock. Lost it all. 
With gas prices & food going up I had to take a job at my age (73) to 
pay for my medicines alone. I cannot buy or go out because of a lack of 
money. No gardening, etc. Just have the necessities even though I had 
good jobs, (a college education also) since I was 16 yrs. old. Had to 
raise my 3 children my self so couldn't save until the last one 
finished college. Now I am living on Social Security only.--Theadora, 
Johns Creek, GA (July 6, 2011)

    I had a house, but lost it to the bank, like millions of others. 
Now, I live on $802/month. I budget everything, even food. If an 
emergency arises, am I prepared? Hell no! I never expected to live like 
this and I'm scared.--Cynthia, Ellijay, GA (May 2, 2011)

                                  IOWA

    Healthcare costs have crippled my parents, and since my mother 
passed away a few months ago, without her social security check each 
month, the struggle is that much harder for my father.--Pamela, Des 
Moines, IA (October 5, 2011)

    For myself and many of my friends it means having to choose whether 
to buy groceries for the family or the medicines we require for 
diabetes, high blood pressure, heart disease, chronic pain, etc. that 
we endure. My wife and I have even considered whether we may need to 
sell our home. We didn't live high, but we had money for the 
necessities of life. Now it mostly goes for food and medicine, and very 
little else.--David, Boone, IA (September 10, 2011)

                                KENTUCKY

    Both my mother and my in-laws are living on fixed incomes from 
social security. They often have to let go of necessities like medicine 
and struggle to pay their light bills and rent and other necessary 
bills. They always run out of money before the end of the month because 
what they get isn't enough for their basic needs. I often have to let 
go of some of my own bills and take money that I need for my own family 
(three daughters) to help them so they can have their medicine and pay 
their rent and electric bills. This is wrong! These people have paid in 
money for decades and now they don't have enough to meet their basic 
needs.--Rebecca, Barbourville, KY (October 2, 2011)

    I am a 72-yr-old female getting only $650.00 a month in Social 
Security. I'm living in a senior citizens subsidized apartment complex 
in rural Kentucky. I need my medical benefits and food stamps to make 
ends each month. Thank you for I'm someone's mother and grandmother.--
Verdella, Warsaw, KY (May 26, 2011)

                                MARYLAND

    Choosing heat or food in the winter. Choosing medicine or air 
conditioning in the summer. My mother is over 65 and these are the 
decisions she has to sometimes face. While we help as much as we can 
she sometimes is too ashamed to admit she is unable to fend for 
herself--so, I guess you can add embarrassment and loss of self-esteem 
to the list as well.--Monica, Millersville, MD (August 20, 2011)

    My grandmother struggles monthly to pay for medicine, utilities, 
food, and rent. sometimes she curtails her food budget in order to pay 
for her rent and prescription medication. Our utility company's rates 
have basically skyrocketed and she has called me in tears, on more than 
one occasion, asking for financial help; which I gladly will do because 
she is my grandmother and it pains me to see her in such distress.--
Heather, Halethorpe, MD (April 8, 2011)

                               NEW MEXICO

    I am 77 and still working as I cannot afford to retire. The cost of 
medical insurance is overwhelming. Medicare just does not get the job 
done--it beats a zero, but only. With my husband having three major 
surgeries this year, we are exhausted and going down. I have paid 
Social Security taxes and Medicare all of my life. This is the worst I 
could have expected.--Sally, El Prado, NM (July 16, 2011)

    I am 8 months away from a paltry SS check. I am also a 99er whose 
benefits have been exhausted. I go to a food pantry for food. A thrift 
store that sells items for 40 cents a lb. I am living off my savings 
that should be for retirement.--Pat, Albuquerque, NM (July 10, 2011)

                             NORTH CAROLINA

    My grandma suffers from COPD and Heart Disease. Every month she 
struggles to pay her bills, and every month she is forced to make 
payment arrangements just to keep her power on. She has had the power 
turned off on her more than once and has spent more than one night cold 
and in the dark. She has to make daily decisions between paying her 
bills and paying for her medication. She is always one of the 
following: (a) hungry, (b) cold, or (c) in pain (without her meds). 
Enough is enough. Take care of our elderly, they paved the way for 
us!--Jenna, Durham, NC (July 6, 2011)

    For me it looks like returning to work, not in the capacity I held 
before retirement (Head Admin. of a Rehab facility), but driving a bus 
for $10 an hour with no benefits. The new thing is for employers to 
hire on a ``temporary'' basis so they do not have to pay sick time, 
vacation time, lunch relief or unemployment benefits. I am now 74 years 
old and it looks like I will have to work until I die. If I become 
incapacitated, I do not know what will happen to me. I cry very easily 
now!--Penne, Asheville, NC (May 31, 2011)

                                 OREGON

    If I didn't live in HUD-assisted housing, I would be living on the 
street. I live on $674 a month and some food stamps. How is the economy 
affecting my life as a senior? It sucks!--Bonnie, Eugene, OR ( 
September 15, 2011)

    I am retired from the Federal Govt. with 32 years of service, The 
recent Blue Cross health care increases are now taking 50 percent of my 
retirement check. With the rising cost of food and fuel we have to get 
by without many things like dental and vision care not covered by 
Medicare or Blue Cross. I have Glaucoma and cataracts and limited 
access to the mainstream providers as we live in a rural community. The 
closest providers are 250 miles distance and are just not affordable 
due to the rising fuel costs.--Gerald, Coquille, OR (July 20, 2011)

                              PENNSYLVANIA

    It has become a choice of medical care, medicine, and food. I have 
two very ill parents and if they did not have family they would be 
homeless.--Shakeerah, Penndel, PA (August 31, 2011)

    I am 69 years old, disabled, living alone. I am on S.S. ($825 per 
month) and it stays the same while prices have literally doubled for 
many things. I don't go out, just sit home watching TV and sleeping as 
much as I can. I get food stamps but they don't buy enough for the 
month. I have cut down on meat because I can't afford it. I have had no 
heat since February 5th, and it is very cold. There is nowhere left to 
turn for help. If this is all that's left in life, I don't want to be 
here. Please don't take any more away from people like me.--John, 
Williamsport, PA (May 5, 2011)

                              RHODE ISLAND

    I've been laid off after 15 years of faithful service to a 
nonprofit working with the developmentally disabled. My COBRA exceeds 1 
week of unemployment compensation by $103.70. I'm too old (60) to get a 
job. Too young to retire. Too healthy to go on disability. Too 
experienced (companies hire younger, inexperienced workers because they 
can start them at lower salaries) to get hired and continue to 
contribute to the economy. Even minimally, I can't live on minimum 
wage. Even sharing expenses with a house mate leaves little for frills, 
like going to the movies, or a concert, or the theatre. I'm a senior. 
These are supposed to be my golden years. They are not!--Theresa, 
Cranston, RI (October 12, 2011)

    I struggle to either pay my bill or get the prescriptions I need or 
groceries for food every single month. I have to try to balance my 
budget.--Barry, Providence, RI (October 7, 2011)

                                  UTAH

    When we can't afford to eat if we take care of our health with 
medication, or can't afford the medication if we eat, something is 
definitely wrong.--Colleen, Layton, UT (August 5, 2011)

    KS is an elderly lady that has been an active member in her 
community all her life. She has always taken care of her two disabled 
sons. She is now disabled herself and they are trying to take care of 
her. The three of them live on less than $1,000.00 a month. Without the 
services provided for from these government programs she would die and 
her two sons would be living on the streets.--Linda, Oakley, UT (April 
19, 2011)

                                VERMONT

    For me I had to file chapter 7 and everything I worked for for 55 
years is all gone and now I am renting and still having to work at 72 
years old and I am having trouble with both of my knees and I am just 
keeping my head above water now.--Earl, Grand Isle, VT (October 7, 
2011)

    My husband (74) and I live off SS. We're paying 1,035 dollar a 
month for health insurance, plus $1,000 deductible EACH per year. We 
have to choose between food or medicine each and every day. Golden 
days? One big piece of rust, that's what they are.--Mildred, Leicester, 
VT (May 20, 2011)

                                WYOMING

    Our food, gas, medicine and other necessary items of life, soap, 
clothing, shoes, etc. have all gone up recently. I haven't bought new 
shoes, new clothes or anything else for several years. In fact when I 
need anything new, I search out 2d hand stores and if I can't find what 
I want or need there, I do without--as do a great many of my friends 
and family.--Janet, Newcastle, WY (September 29, 2011)
    My neighbor, who lost her husband last year, is now just scraping 
by on a decreased income. She has been able to stay in her home, but 
doesn't have the money to make needed repairs.--Jennifer, Casper, WY 
(April 18, 2011)

    [Whereupon, at 11:35 a.m., the hearing was adjourned.]

                                   

      
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