[Senate Hearing 113-899]
[From the U.S. Government Publishing Office]




                                                        S. Hrg. 113-899
 
                    INCOME SECURITY AND THE ELDERLY:
                          SECURING GAINS MADE
                         IN THE WAR ON POVERTY

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

                                HEARING

                               BEFORE THE

                       SPECIAL COMMITTEE ON AGING

                          UNITED STATES SENATE

                    ONE HUNDRED THIRTEENTH CONGRESS


                             SECOND SESSION

                               __________

                             WASHINGTON, DC

                               __________

                             MARCH 5, 2014

                               __________

                           Serial No. 113-19

         Printed for the use of the Special Committee on Aging
         
         
         
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        Available via the World Wide Web: http://www.govinfo.gov
        
        
        
                              ______
 
              U.S. GOVERNMENT PUBLISHING OFFICE 
46-911PDF              WASHINGTON : 2023     
 
        
        
                       SPECIAL COMMITTEE ON AGING

                     BILL NELSON, Florida, Chairman

RON WYDEN, Oregon                    SUSAN M. COLLINS, Maine
ROBERT P. CASEY, JR., Pennsylvania   BOB CORKER, Tennessee
CLAIRE McCASKILL, Missouri           ORRIN G. HATCH, Utah
SHELDON WHITEHOUSE, Rhode Island     MARK KIRK, Illinois
KIRSTEN E. GILLIBRAND, New York      DEAN HELLER, Nevada
JOE MANCHIN III West Virginia        JEFF FLAKE, Arizona
RICHARD BLUMENTHAL, Connecticut      KELLY AYOTTE, New Hampshire
TAMMY BALDWIN, Wisconsin             TIM SCOTT, South Carolina
JOE DONNELLY, Indiana                TED CRUZ, Texas
ELIZABETH WARREN, Massachusetts
                              ----------                              
                  Kim Lipsky, Majority Staff Director
               Priscilla Hanley, Minority Staff Director
               
                         C  O  N  T  E  N  T  S

                              ----------                              

                                                                   Page

Opening Statement of Senator Bill Nelson, Chairman...............     1
Opening Statement of Senator Susan M. Collins, Ranking Member....     3

                           PANEL OF WITNESSES

Tricia Neuman, Sc.D, Senior Vice President, The Henry J. Kaiser 
  Family Foundation..............................................     5
Barbara Bovbjerg, Managing Director, Education Workforce and 
  Income Security, U.S. Government Accountability Office.........     6
Joan Entmacher, Vice President and Director of Family Economic 
  Security, National Women's Law Center..........................     8
Dixie Shaw, Director of Hunger and Relief Services, Catholic 
  Charities Maine................................................     9

                                APPENDIX
                      Prepared Witness Statements

Tricia Neuman, Sc.D, Senior Vice President, The Henry J. Kaiser 
  Family Foundation..............................................    29
Barbara Bovbjerg, Managing Director, Education Workforce and 
  Income Security, U.S. Government Accountability Office.........    44
Joan Entmacher, Vice President and Director of Family Economic 
  Security, National Women's Law Center..........................    58
Dixie Shaw, Director of Hunger and Relief Services, Catholic 
  Charities Maine................................................    72

                       Statements for the Record

Meals on Wheels Association of America...........................    87
National Senior Citizens Law Center..............................    93


                    INCOME SECURITY AND THE ELDERLY:

                          SECURING GAINS MADE

                         IN THE WAR ON POVERTY

                              ----------                              


                        WEDNESDAY, MARCH 5, 2014

                                       U.S. Senate,
                                Special Committee on Aging,
                                                    Washington, DC.
    The Committee met, pursuant to notice, at 1:30 p.m., Room 
562, Dirksen Senate Office Building, Hon. Bill Nelson, Chairman 
of the Committee, presiding.
    Present: Senators Nelson and Collins.

       OPENING STATEMENT OF SENATOR BILL NELSON, CHAIRMAN

    The Chairman. Good afternoon. We are here to discuss 
poverty among the Nation's elderly. This year marks the 50th 
anniversary of the War on Poverty so it makes it an opportune 
time to discuss and consider both the gains that we have made 
and the challenges that remain.
    When we think of the poor, the elderly are not usually the 
first group that comes to mind. In a popular image, retirees 
are free of worries about either their health or finances. They 
dote on their grandchildren, pursue hobbies and interests, and 
take vacations and play lots of golf. They can do these things 
because they finally have the time and the money to do it, and, 
for some Americans, that is what retirement looks like, but in 
our country there are growing disparities between the rich and 
the poor. In Miami, earners in the upper percentile have 15 
times more income than those toward the bottom, and given such 
disparities, it is not surprising that for some elderly 
Americans retirement is not necessarily that golden.
    These are our senior citizens, and if they happen to be 
single, try to meet daily expenses on an income that is little 
more than $10,000 a year.
    These are our senior citizens who live below the official 
poverty line--conservatively, close to four million seniors--
and they are not the only elderly who struggle financially.
    The poverty threshold for an elderly couple is a little 
over $14,000, and the median income for senior households is 
about $34,000. These two numbers are close enough that a 
potential financial crisis could loom nearby even for elderly 
households that have some buffer. Some have estimated that 
almost half of elderly Americans face this kind of economic 
insecurity.
    In anticipating that the elderly would need some kind of 
insured income after retiring, President Roosevelt created the 
Social Security Program in 1935, and adjustments made to the 
benefit levels in the 1970s lifted millions of elderly 
Americans above the poverty line, and the introduction of a 
Cost-of-Living Adjustment has been able to keep them there.
    We talked about four million elderly Americans live below 
the poverty threshold. Without Social Security, that number 
would be around nineteen million. To me, what seems striking is 
without Social Security close to half of all elderly Americans 
would live out their final years in poverty.
    Let's take a moment to recognize all the good that Social 
Security does, but let's also not pretend that the system does 
not necessarily work perfectly, especially for the poor.
    First, we have a Social Security benefit called the Special 
Minimum Benefit that is designed for long-term, low-wage 
earners. It is supposed to give them a boost in retirement, but 
as it stands now, because of how it is indexed for inflation, 
it will not be used to help raise the benefits of a single poor 
senior after the year 2016, and then there is Supplemental 
Security income, SSI. The asset limits and other thresholds 
have not been updated for decades.
    Neither of these programs are lifting seniors out of 
poverty.
    In addition to Social Security, Medicare provides an 
important safety net for our elderly. Medicare has made health 
insurance for those 65 and over universal and provides a buffer 
against catastrophic medical bills and expensive prescriptions, 
but while Medicare protects against catastrophe, the budgets of 
elderly households remain vulnerable to the out-of-pocket 
medical expenses.
    All of our senior citizens who contributed to our economy 
across lifetimes of work deserve their golden years. Each 
should be free of the worry about how to meet the expenses for 
their most basic needs--food, housing, medicine, medical care.
    This is a wonderful country that has made the War on 
Poverty one of the battles that it saw as a moral imperative, 
and we can be proud of the victories in reducing poverty 
amongst our Nation's elderly. When President Johnson declared 
that war on poverty 50 years ago, roughly, one of every three 
seniors was considered poor. Now that figure is down to one in 
ten, and so we must do more to ensure that those gains are not 
lost.
    I hope that from our witnesses today we can learn how we 
should be able to move forward to protect our most vulnerable 
citizens.
    I want to thank everyone, especially Senator Collins. We 
originally thought that we had a series of votes starting at 
2:00. That has now been pushed off to a little later. We will 
not be under the time pressure that we originally thought, but 
thank you all for accommodating this so that we could start 
earlier than the intended time.
    Senator Collins.

                     STATEMENT OF SENATOR 
                SUSAN M. COLLINS, RANKING MEMBER

    Senator Collins. Thank you very much, Mr. Chairman. I want 
to thank you for convening this very important hearing.
    One of our Nation's greatest accomplishments has been the 
dramatic reduction in the poverty rate among our elderly. Fifty 
years ago, one in three American seniors lived in poverty, a 
rate higher than that of any other age group. Today, that rate 
has been reduced to one in ten, similar to that of working-age 
adults. Nevertheless, despite this achievement, poverty remains 
a troubling reality for millions of older Americans who 
struggle to meet the basic necessities of life.
    Our hearing today will focus in part on the causes and 
consequences of senior poverty and will give our Committee the 
opportunity to build on our prior work on the critical issue of 
retirement security.
    Much of the success that we have seen in reducing senior 
poverty during the past half-century is attributable to Social 
Security. It has made the difference between poverty and a 
reasonable standard of living for countless senior citizens.
    The importance of this program to low-income retirees 
cannot be overstated. They receive 85 percent of their income 
from Social Security alone. Nationally, one in four retired 
Americans has no source of income beyond Social Security. In my 
State of Maine, the number is one in three, and four in ten 
rely on that vital program for 90 percent of their retirement 
income.
    By contrast, retirees in the top income quartile receive 
just seventeen percent of their income from Social Security.
    After spending four decades in the workforce, our Nation's 
seniors should be confident that they will have the resources 
to meet their needs in retirement without fearing that they 
will run out of money or end up impoverished. Yet, retirees who 
rely exclusively on Social Security have a very narrow margin 
and must watch every penny.
    Bear in mind that Social Security's average benefit amounts 
to less than $16,000 a year, just a few thousand dollars more 
than the official poverty rate. Millions of retirees do not 
even receive that amount. It is hard to imagine stretching 
those dollars far enough to pay the bills.
    Certainly, putting money away to cover unexpected 
emergencies or out-of-pocket medical expenses is out of the 
question for many seniors. In fact, according to data provided 
to me by the University of Maine's Center on Aging, one in ten 
older adults in Maine skip meals or modify their diet because 
of financial concerns; nearly one in four worry about their 
household food budget.
    Adequate savings can reduce poverty among our seniors 
during what should be their golden years, but I have heard 
countless stories from retirees whose savings did not go as far 
as they had anticipated.
    As we have learned in our prior hearing on retirement 
security, elder poverty also increases Medicare and Medicaid 
expenditures, and strains our safety net. Giving those not yet 
at retirement age more opportunities to save and to save more 
may help to reduce poverty among our Nation's seniors while 
also easing the burden on entitlement programs which are 
already projected to be unsustainable.
    I believe that making it easier for small businesses to 
provide access to retirement plans for their workers could make 
a significant difference in their retirement security, and that 
is why, along with our Chairman, Senator Nelson, I authored 
with him the Retirement Security Act of 2014. Our bill would 
encourage small employers to offer retirement plans, provide 
incentives for employees to save more and ensure that low and 
middle-income taxpayers are able to claim tax benefits for 
retirement savings that are already authorized in law.
    As we learned in our prior hearing, the likelihood that a 
retiree will face poverty rises with age, and it is three times 
higher for the unmarried elderly than for married seniors. 
Today's hearing provides us with the opportunity to learn more 
about how these and other factors contribute to the risk of 
poverty among our seniors and what can be done to reduce that 
risk.
    Facing poverty is harsh anywhere at any age, but I find it 
especially heartbreaking when it is accompanied by isolation 
and loneliness as it so often is in rural America.
    For that reason, I am particularly pleased to welcome one 
of our witnesses today, Dixie Shaw, the Director of Hunger and 
Relief Services for Catholic Charities in Maine, whose office 
is in my home town of Caribou, Maine. Dixie is truly 
extraordinary. She runs two food banks, supplying 25 food 
pantries that serve over 24,000 people. That is nearly one-
third of the entire population of Aroostook County in Northern 
Maine.
    Dixie is a force of nature, as you will see today, and her 
work gives her a perspective that I know will be of great value 
to us.
    Thank you, Mr. Chairman, for holding this hearing. I look 
forward to hearing not only from Dixie but from all of our 
witnesses.
    The Chairman. First, we are going to hear from Dr. Tricia 
Neuman. She will introduce a video about two elderly Americans 
coping with the realities of poverty. Dr. Neuman is Senior Vice 
President of the Kaiser Family Foundation and a Director of the 
Foundation's Program on Medicare Policy and the Project on 
Medicare's Future.
    Then we will hear from Ms. Barbara Bovbjerg. Ms. Bovbjerg 
is the Managing Director of Education Workforce and Income 
Security at the Government Accountability Office, GAO, and 
then, Ms. Joan Entmacher. Ms. Entmacher is the Vice President 
of Family Economic Security at the National Women's Law Center, 
and then we will hear from the famous Ms. Dixie Shaw. Ms. Shaw 
is Director of Hunger and Relief Services for Catholic 
Charities in Caribou, Maine.
    Thank you all for participating. Your formal testimony has 
been entered in the record. We would like for you to share with 
us for about five minutes.
    Dr. Neuman.

               STATEMENT OF TRICIA NEUMAN, SC.D.,

                SENIOR VICE PRESIDENT, THE HENRY

                  J. KAISER FAMILY FOUNDATION

    Dr. Neuman. Thank you, Chairman Nelson, and thank you, 
Senator Collins. It is an honor to be here to testify at the 
Senate Special Committee on Aging on economic security for 
older Americans and soon to present highlights from a video 
that the Kaiser Family Foundation is releasing today, called 
Old and Poor: America's Forgotten.
    Since the War on Poverty was launched 50 years ago, the 
poverty rate among seniors has declined, with much of the drop 
occurring in the decade immediately following the introduction 
of Medicare. This is obviously significant progress.
    Nonetheless, as you have both pointed out, millions of 
seniors today are living in poverty, and millions more are 
hovering above the poverty line. Based on the official poverty 
measure, nearly one in ten seniors, or nine percent, are living 
in poverty, and about one in three are living on incomes just 
below twice the poverty level, so this is a big issue for 
seniors in our country.
    The poverty rate among seniors rises from nine to fifteen 
percent when the Supplemental Poverty Measure is used mainly 
because the Supplemental Poverty Measure takes into account 
out-of-pocket health expenses, which are a major concern for 
seniors and disproportionately affect seniors. As we grow 
older, we have more health problems, and that, of course, means 
more health costs and out-of-pocket spending.
    Poverty rates for seniors are especially high in certain 
parts of the country. About one in five seniors in California, 
Hawaii, Louisiana, Nevada, Georgia and New York are living in 
poverty based on the Supplemental Poverty Measure, and here in 
the District of Columbia more than one in four, or twenty-six 
percent, of all seniors are living below the poverty level.
    Poverty strikes some groups harder than others. Older women 
are more likely than older men to be living in poverty, and 
black and Hispanic seniors experience poverty at more than 
double the rate of white seniors.
    For nearly 50 years, Medicare has helped to shield seniors 
from crushing financial expenses, but even with Medicare and 
with supplemental insurance, out-of-pocket costs are a concern, 
particularly for those with low incomes.
    Many people with low incomes get supplemental assistance 
from Medicaid, the Medicare Savings Programs and the Part D 
Low-Income Subsidy Program. Without these programs, they would 
face great difficulty affording their Medicare premiums and 
cost-sharing and would be at risk of going without needed care, 
and, without these programs, more would be living in poverty, 
particularly based on that Supplemental Poverty Measure.
    However, not all low-income seniors are covered by these 
programs or protected against these costs, and if they are not 
already living in poverty, they are at great risk of doing so. 
Our analysis shows that one-third of all seniors with incomes 
below 150 percent of the poverty level receive no assistance 
from Medicaid or the Medicare Savings Programs or the Part D 
Low-Income Subsidy Program.
    It is always a challenge to predict the future, but if out-
of-pocket costs rise faster than income, as it has in the past, 
then more seniors will be at risk of economic insecurity in the 
future.
    Likewise, if efforts to reduce the growth in Medicare and 
Medicaid spending shift additional costs onto seniors, without 
providing safeguards to protect those with low incomes, then 
much of the progress that has been made over the past 50 years 
could unravel in the future.
    Mr. Chairman, Senator Collins, I am so pleased now to share 
with you a short segment from our video, Old and Poor: 
America's Forgotten. The video looks beneath some of the 
statistics we have talked about this afternoon and focuses 
directly on the experiences of seniors who are living in 
poverty in both urban and in rural areas, and the challenges 
they face in making ends meet.
    Thank you.
    [Video played.]
    The Chairman. Thank you, Dr. Neuman.
    Ms. Bovbjerg.

            STATEMENT OF BARBARA BOVBJERG, MANAGING

            DIRECTOR, EDUCATION WORKFORCE AND INCOME

        SECURITY, U.S. GOVERNMENT ACCOUNTABILITY OFFICE

    Ms. Bovbjerg. It is hard to follow a video like that. I am 
going to talk about numbers, and I do not have a video. I am 
sorry, but, Mr. Chairman and Senator Collins, thank you so much 
for inviting us here today.
    I was planning to talk about other financial 
vulnerabilities among the Nation's seniors, outside of health 
care.
    As you say, since the advent of Social Security, poverty 
rates for older Americans have declined dramatically, but some 
of the benefit provisions that were developed at that time--it 
was a different time. It was a time when family structures, 
work patterns and pensions were very different than they are 
today.
    My testimony will examine the effects of these changes on 
retirement security in the U.S., and it is the subject of a 
report that we recently prepared for this Committee. I will 
address the trends in marriage, work and pension benefits, the 
impact of such trends on retirement income and the implications 
for certain elderly Americans. I will draw not only from our 
recent report, but in deference to the broadness of the topic 
today, I will draw from some of our other previous work.
    I will speak first about the trends.
    In the last 50 years, the composition of the American 
household changed dramatically. The proportion of unmarried 
individuals has increased steadily as couples have chosen to 
marry at ever later ages and the divorce rate has risen. This 
is important because Social Security is not only available to 
workers but also to spouses and survivors.
    The decline in marriage and the concomitant rise in single 
parenthood have been more pronounced among low-income, less 
educated individuals and some minorities, and, at the same 
time, married women have become increasingly likely to work and 
are now roughly as likely to be in the labor force as unmarried 
women.
    Social Security was created at a time when married women 
were expected not to work and, instead, to claim benefits as 
the spouse of a worker.
    As marriage and workforce patterns changed, so too did the 
retirement system in the U.S. Over the last two decades, 
employers have increasingly shifted away from traditional 
defined-benefit pensions to defined-contribution plans, such as 
401(k)s, shifting risk to individual workers and making it more 
likely they will receive lump-sum benefits rather than 
annuities for their lifetime in retirement.
    These trends have affected retirement incomes, especially 
for women and minorities. Fewer women today receive Social 
Security spousal and survivor benefits than in the past. Most 
qualify for benefits on their own work records. This trend is 
more pronounced for blacks, but, for many elderly, the shift is 
likely to be positive, reflecting their higher earnings and 
their greater capacity to save for retirement, but, unmarried 
elderly women, with low levels of lifetime earnings, a group 
that is disproportionately black, are expected to have lower 
Social Security retirement benefits than any other demographic 
group.
    These trends have also affected household savings. 
Households with defined-contribution plans have a greater 
responsibility to save for retirement and to manage these 
savings to assure a sufficient income for the rest of their 
lives. Our work suggests that many households approaching 
retirement will still have very limited, or even no, retirement 
savings.
    Married households are more likely to have such savings, 
but the majority of single-headed households have none. Single 
parents, in particular, tend to have fewer resources available 
to save for retirement during their working years, and, with DC 
plans becoming the norm for most who have a pension, and with 
significant numbers not having such benefits, Americans will 
find they must rely increasingly in Social Security as their 
primary or perhaps only source of retirement income.
    Let me turn now to the most vulnerable retirees.
    The trends I just described have the potential to affect 
many Americans, but it is likely they will have the most 
negative impact on those already vulnerable. Despite Social 
Security's role in reducing poverty among seniors, poverty 
remains high among unmarried women, women over age 80 and non-
whites. Moreover, those near retirement, who experience 
economic shocks such as losing a job or becoming a widow or 
widower, are also vulnerable to income insufficiency in 
retirement.
    These groups may seek to rely on the public sector for 
greater assistance as, for example, occurred during the recent 
recession.
    Yet, our work has identified weaknesses in assistance 
programs for the elderly. The Older Americans Act, for example, 
finances programs that provide transportation, caregiving and 
nutrition assistance, among other things, to help older adults 
retain independence but is not always targeted to those with 
greatest need. It is not clear that such programs are always 
available to adults who need them, and we do not have the data 
to know that those in most need are being reached.
    In conclusion, as our society and economy continue to 
evolve, supports for the elderly may need to evolve with them, 
particularly as the Boomer generation swells the numbers of new 
and near retirees. Addressing the changing needs of the elderly 
will be crucial to assuring that we sustain the reductions in 
poverty that Social Security has made possible.
    That concludes my testimony. I am happy to answer any 
questions you have.
    The Chairman. Thank you, Ms. Bovbjerg.
    Ms. Entmacher.

          STATEMENT OF JOAN ENTMACHER, VICE PRESIDENT

           AND DIRECTOR OF FAMILY ECONOMIC SECURITY,

                  NATIONAL WOMEN'S LAW CENTER

    Ms. Entmacher. Thank you. Thank you, Mr. Chairman, and 
thank you, Senator Collins, for holding this hearing and for 
detailing in your own statements how important it is that we 
realize that elderly poverty is still a problem.
    I will not go over those statistics. I will simply point 
out that at the back of my testimony there are tables that show 
how much worse poverty is for women and people of color, and 
also, state by state, the percentage of seniors in poverty and 
also living below 200 percent of the poverty line and 
struggling to deal with retirement security.
    I will just add one statistic to the many that you have 
heard, and that is that the number of seniors living in deep 
poverty, below 50 percent of the poverty line, or $5,500 a year 
for a single individual, increased by 25 percent between 2011 
and 2012, so we have a serious problem, and by some measures, 
it is getting worse.
    I am going to focus on public and private programs that 
provide help to seniors. We know that Social Security, Medicare 
and Medicaid have dramatically improved the well-being of the 
elderly in this country, but elderly poverty is still with us 
because, for some, the help falls short of their needs, or they 
are not eligible at all and they are falling through the 
cracks. I am going to focus on particular programs and how they 
could be improved to further reduce poverty.
    First, Social Security. As you said, it is impossible to 
overstate the importance of Social Security as an income 
support program. Without it, half of women 65 and older and 
four in ten men would be living in poverty, and it is 
improvements in those benefits, as you said, Mr. Chairman, that 
account for its extraordinary success in lifting people out of 
poverty.
    Some elders are not eligible for Social Security benefits 
or receive benefits that are too low to lift them out of 
poverty, like the women we saw in that video. This is a 
particular risk for women whose lifetime earnings are generally 
lower than men's. About 40 percent of female retirees receive 
worker benefits that would not provide a poverty-level income 
compared to less than 20 percent of men.
    Increasing Social Security benefits, which are already 
virtually universal, fully portable, provide benefits that you 
cannot outlive, are adjusted for inflation and cover family 
members is a key strategy for reducing elderly poverty.
    My written testimony identifies a number of specific ways 
to improve those benefits, including improving the Special 
Minimum Benefit, recognizing caregiving in the benefit formula, 
reforming the benefit for surviving widows and widowers so that 
it is more adequate and equitable for changing families, having 
a COLA that recognizes the true cost of health care for elderly 
individuals and possibly modestly raising benefits across the 
board with a flat amount that would provide a better boost to 
low-income people.
    Supplement Security Income is the anti-poverty program for 
low-income elders and people with disabilities, and it does do 
something to reduce poverty. It lifted over 300,000 people out 
of poverty last year and about 450,000 out of deep poverty. 
When the number of elders in deep poverty increases by 10 times 
as much as the SSI rolls, we know that this safety net is 
failing.
    Part of the problem is that it has been virtually untouched 
since it was adopted 40 years ago. The income disregards people 
can get only $20 a month of the Social Security benefits they 
have earned before their SSI benefits are reduced dollar for 
dollar. If that had kept pace with inflation, it would be worth 
$110 a month today, and that would enable people to afford two 
weeks' worth of food instead of 2.5 days and increase their 
retirement security.
    They are only allowed to have $2,000 in available assets as 
an individual, $3,000 as a couple, and that includes anything 
they have managed to save in a retirement account. Those 
amounts have not been updated in 30 years, and program rules 
are harsh and make the program penalize adults who get help 
from an adult child in the form of food or groceries.
    Lastly, the Older Americans Act, which was mentioned, was 
hit by the sequester and the cuts last year, and a survey of 
agencies that provide help to the aging indicated that 85 
percent of them had to cut back on services, including Meals on 
Wheels, transportation and then home support services.
    I would say, first, do no harm. Do not let Social Security 
be cut or costs of health care be shifted to elderly 
beneficiaries. More than that, increase Social Security 
benefits, modernize SSI and restore some of the funding for 
these vital domestic programs.
    Thank you.
    The Chairman. Thank you, Ms. Entmacher.
    Ms. Shaw.

          STATEMENT OF DIXIE SHAW, DIRECTOR OF HUNGER 
         AND RELIEF SERVICES, CATHOLIC CHARITIES MAINE

    Ms. Shaw. Chairman Nelson, Senator Collins, on behalf of 
the older people we serve, their families and their 
communities, I thank each of you for the opportunity to be here 
today.
    My name is Dixie Shaw, and I am a native of Aroostook 
County, Maine. I currently work for a non-profit and provide 
services to many folks in our county, including but not limited 
to the elderly. Our food bank services 24,196 people through 
our 25-food pantry network in 2013.
    In my written testimony, I have highlighted our work 
through Catholic Charities Maine, and I have also mentioned 
some other work done by other agencies.
    I do not want to take this time to be spent on the work we 
do, or the other agencies. I want this time to be focused on 
the people in need. Therefore, I will talk about the three top 
problems I see on a daily basis from my perspective--heating 
needs, food and security, and transportation. Although there 
are other needs as well, we are limited on time, and I will 
keep it to those three.
    Heating oil costs are impossible for almost all of us in 
cold, rural areas to keep up with. Heating costs are a 
necessity, and it is ongoing for many months, and it is even 
more costly than one can even anticipate when the unexpected 
and totally new phenomenon of a polar vortex settles in for the 
winter. I do not know about you, but I did not see that coming.
    The stories of the elderly, cold, shivering and being 
discovered in the nick of time are too numerous to tell. They 
are trying all kinds of creative ways to survive, from 
unhooking dryer vents, lighting candles inside clay pots and to 
plugging in expensive and unsafe electric heaters. Last year, 
our local Red Cross had a record-breaking year of house fires 
due to people trying to keep warm in unsafe ways.
    Heating oil prices affect the quality of life for all rural 
Mainers. It is our only option for many.
    Alternative methods like wood and wood pellets are far too 
labor-intensive for most of the aging population. However, some 
do try to deal with these options and do have some terrible 
accidents.
    Food and security for the elderly is multifaceted. They 
oftentimes have special dietary needs. They sacrifice food and 
medicine for other costs they cannot control, such as heat, 
electricity and housing costs.
    They also need to get to the food which, in rural areas, 
can be quite a distance, but if you are unable to drive and 
have difficulty with mobility, even the next block can be a 
challenge. There are many stories of looking in an elderly 
person's refrigerator and there is no food in it.
    They usually do not complain, and they oftentimes will not 
tell of their plight. Many are alone as younger families have 
gone off to more populated lands of opportunity.
    The CSFP packs that we receive are vital and much 
appreciated and needed by our seniors who qualify. I wish there 
were more.
    Public transportation for the elderly in rural locations is 
vital to their independence and ability to access food and 
medical appointments. It is also important to allow them 
opportunities to socialize, especially those who live in their 
own homes. It is not just a matter of having transportation but 
reliable, dependable and timely transportation.
    Our county is approximately 671 square miles. It can be a 
long way to get a service or need for many if they do not have 
the ability to drive or have family members that live near. Who 
and how do they even access services?
    Many seniors have health conditions that require they 
return home for medications. One of our co-worker's grandmother 
is diabetic, and the current public transportation is not 
timely, and she oftentimes waits to be picked up after 
appointments for extended periods of time.
    This creates stress and panic in the elderly and disabled. 
We have seen it.
    I have oftentimes, after seeing someone wait an extended 
period of time for the bus, just given them a ride home.
    There are other issues, other than heating needs, food and 
security, and transportation that the elderly face, such as 
isolation, the inability to adapt or keep up with technology, 
pride and not wanting help--are some that come to mind.
    The Chairman. Thank you, Ms. Shaw.
    Senator Collins.
    Senator Collins. Thank you very much, Mr. Chairman.
    Ms. Shaw, it is hard for me to call you that rather than 
Dixie. One of the reasons that I am so pleased that you could 
join us today is you have the front-line experience of actually 
meeting the needs of our seniors in rural Maine.
    You have talked about the impact of high heating bills.
    You have talked about the difficulties with transportation.
    Can you tell us some of the barriers that you faced as you 
have tried to meet the food needs of our poor seniors?
    Ms. Shaw. Yes. Some of the barriers are, obviously, the 
distance that is involved to get to--that is why we serve 25 
food pantries and we want to get into 25 communities, so we can 
be as close to people as possible.
    There are great distances involved to get to some of the 
major towns, so the transportation, again, is an issue, and the 
distance that we are trying to cover and, also, the lack of 
resources in a rural area that we have, and we in Aroostook 
County work closely with other agencies to try to provide as 
much of a safety net as we can. I said we work with Aroostook 
County Action Program and Aroostook Area Agency on Aging, and 
we reach out and grab hands and try to lock fingers to make as 
much--you know, to do as much good as we can, to catch as many 
things as we can.
    Senator Collins. What do you think is the greatest unmet 
need of low-income elderly that you serve?
    Ms. Shaw. I am talking from a food banking perspective, but 
the greatest need--the CSFP packs-and you know what I mean by 
the CSFP----
    Senator Collins. Why don't you explain because I am not 
sure everyone here does?
    Ms. Shaw. The CSFP food packs are approximately $50 worth 
of food items that are distributed each month, and they are 
part of USDA.
    Actually, we do not have the contract. It is with the 
Aroostook Area Agency on Aging, and right now we have like 480 
of those food packs that come into Aroostook County each month 
for seniors who qualify, over 62, and I have seen firsthand 
distributing those to people and what it means to them. Some of 
them--they line up in our parking lot at 9:00 in the morning, 
clear back up the street. They come in taxicabs. They come with 
neighbors. They come together. Some have people designated to 
pick them up, so the CSFP food packs are vital, and we just 
found out--it has been up and down.
    We just found out--first, we found out we are getting a 
reduction in those packs for next year, but just before I left 
I was informed by Jason Hall of the Emergency Assistance Food 
Program in Augusta that those have been increased, and our 
county is going to get five more packs, and that is a big deal, 
and they have nutritious food in them and things.
    The other thing is farm shares, another opportunity that 
the seniors like, but one of the challenges to fresh vegetables 
is prepping it. Oftentimes, it is difficult.
    We have a farm that we are now growing our own locally 
grown vegetables. We are working with a little microprocessor 
in Van Buren that is able to slice and dice them, which is 
perfect because they then go to the seniors in a little 
prepacked package and they do not have a great big giant 
rutabaga they have to try to chop up.
    Senator Collins. Well, having visited your food pantry and 
your store where you sell used furniture and other things to 
buy food for the pantry, I know that you do more with less than 
anyone I have ever seen in my life, and you are enormously 
creative.
    I am interested in your judgment on some of the programs 
that are funded by the Federal Government through the Older 
Americans Act, such as Meals on Wheels, senior centers, those 
kinds of programs that have become ingrained in many 
communities. How would you judge the effectiveness of those 
programs in rural areas as opposed to larger communities?
    Ms. Shaw. I do not work with Meals on Wheels. It is not one 
of the programs that we do.
    I am certainly aware of it, and I will tell you that Meals 
on Wheels in a rural area is one of the most cost-effective 
means of dealing with many of the issues that the elderly face, 
including--like I have said, it is not just a meal. It is not 
just a hot meal that they are delivering. It is a warm smile.
    In my report, I indicated a few issues where the workers 
who came by to deliver the meals stumbled onto some really 
serious issues that seniors were dealing with.
    Meals on Wheels is a meal, and it was daily, and it has had 
to be reduced back to once a week, and it was a hot meal, and 
it has had to be reduced to a frozen meal.
    I met with a friend of mine just the night before I came 
down here, who works for DHHS in Maine, and she told me of a 
person that she was aware of that had the Meals on Wheels 
frozen meals stacked up in her refrigerator, and she asked, 
what is this?
    They do not oftentimes know how to even prepare them. They 
have forgotten how to run the microwave, or they are afraid of 
the oven. There are different things, so the cold meals are 
not--they are not able to eat them oftentimes, but that is just 
one piece of that.
    The other piece is the fact that somebody is coming by 
every day to check on the elderly person and see if they are 
okay.
    If you had a caretaker, if it were your parents, you could 
go to work and know that if you checked on them in the morning 
and they were okay, somebody was coming in at lunch time, so it 
allowed the freedom of the caregivers to be able to continue to 
work.
    Oftentimes, caregivers are--we all have to work, and we all 
have aging parents, so that is a benefit, so there is more to 
those Meals on Wheels programs than just that hot meal.
    Senator Collins. That is an excellent point. I, too, have 
heard of many cases where the person delivering the meal will 
discover someone is ill or needs assistance, and that might 
have gone undiscovered and led to real harm.
    I think your point is really well taken. If a senior has 
lost the ability to cook for himself or herself, that frozen 
meal does not have nearly the value of the hot meal. It does 
have the advantage, however, of already being prepared, which 
speaks to the earlier issue that you raised, too.
    Ms. Bovbjerg, far too many American seniors have real 
reason to fear that they are going to outlive their savings.
    We had a hearing in which the nonpartisan Center for 
Retirement Research at Boston College estimated that there is a 
$6.6 trillion gap between the savings that American households 
need to maintain their standard of living and what they 
actually have. We have heard other statistics about how little 
Americans are saving for their retirement.
    Now there are a lot of reasons for that. If you are a very 
low-income worker, it is very hard to save enough for 
retirement. The change from defined-benefit plans to defined-
contribution plans has certainly contributed to that as well.
    There is an issue that I am particularly interested in, and 
that is I think there is a lack of awareness among seniors that 
if they work just one additional year a retiree can increase 
his or her annual retirement by nine percent and by fifty-six 
percent by working five additional years.
    What do you think--and Dr. Neuman, I am going to ask you to 
comment on this as well.
    What do you think that we should be doing to make sure that 
seniors understand that if they do not take--if they are 
healthy and able to work, if they do not take retirement Social 
Security at 62, their retirement benefits are going to be so 
much higher if they wait until 65, 66 or even 70, assuming they 
have the capacity and good health to work?
    Ms. Bovbjerg. Some seniors know this and have to retire at 
62 anyway. They have to claim early.
    Certainly, we saw this in the wake of the recent recession, 
where seniors' unemployment rates tripled. They were not as 
high as for younger people, but nonetheless, if you lose your 
job, you are not going to get a job, so some people did need to 
claim benefits as early as they could, and Social Security came 
to the rescue, to be honest.
    I do not think people understand very well that if they can 
wait to claim that it is financially advantageous for them to 
do so unless they know that they are sick and that they think 
they will not live until their 80s, which is the life 
expectancy for men and women at age 65.
    I complained actually before this Committee before that 
Social Security, I think, has a real opportunity to help people 
understand this, and we have not felt that they have taken this 
opportunity. They need to start it earlier than at age 62 when 
someone comes in to one of their field offices.
    We think that they certainly need to talk with people in 
the field offices, but we are very concerned that people do not 
have access to the information that they need from Social 
Security through the annual benefit statement and that in 2011 
Social Security stopped sending that to every working America 
over the age of 22, I think, or, 24.
    They stopped doing it. They now only send it to you when 
you reach 60, I believe. They could have dropped down lower.
    You can order it online, but it is very difficult to do 
that. I still have not figured out how to do that. Fortunately, 
I am old enough that now I am getting them.
    I think that Social Security is a center of contact with 
the public that could really help in this area, and people need 
that information.
    Senator Collins. I completely agree with you.
    Dr. Neuman, do you have anything to add?
    Dr. Neuman. I really do not. I completely agree, too.
    I think Social Security--I think people do not think about 
retirement issues until they get very close to that moment, 
when they are about to retire.
    I think Social Security and other organizations could do a 
lot to make people more aware of the costs of early retirement, 
to the extent people can, as you said, if they are able to work 
and are healthy enough to do that, but that requires a major 
commitment in public education.
    Senator Collins. Ms. Entmacher?
    Ms. Entmacher. Yes, actually.
    Senator Collins. If you could turn your mic on also.
    Ms. Entmacher. The National Women's Law Center has been 
working with the National Academy of Social Insurance, trying 
to do public education precisely around this issue.
    I think the Social Security Administration in some ways is 
sending some counterproductive messages with their ``Go online. 
Sign up. It is easy. Takes only 15 minutes.''
    I mean, do not get me wrong. It is wonderful that there are 
things you can do online with Social Security. It is great to 
facilitate the application process, but really, what they 
should be saying is ``Thinking of retirement? Wait. Have you 
thought about this? ``Are you married? Are you planning for 
both of your lives? Did you know that if you are the higher 
earner and you claim early your surviving spouse will have a 
reduce benefit, too? ``Stop. Look at all this material." Think 
about it, and ``then when you are ready, go online. Takes only 
15 minutes.''
    I think, again, to repeat, it is not an option that 
everyone is able to take advantage of, but people should have 
the information about the reductions that are coming.
    I would say--and this goes to the policymaking role of the 
Senate--that the cuts are only getting deeper. We have only 
gone partway in phasing in the increase in the retirement age, 
which is effectively an across-the-board benefit cut, and it is 
going to keep on cutting into Social Security benefits for 
future retirees who have not saved enough.
    I think this is something that this Committee could look 
at.
    If I may, I would also like to follow up on Ms. Shaw's 
testimony where she said that they were expecting some cutbacks 
and then discovered they would get five more food packs. That 
was probably the result of the budget deal----
    Senator Collins. It was.
    Ms. Entmacher. [continuing]. Which provided relief from 
sequestration.
    Senator Collins. Right.
    Ms. Entmacher. Well, that is great for fiscal year 2014, 
which we are in now, but we are looking ahead to the budget for 
2015, and there is not much relief from sequestration, and, by 
2016, domestic discretionary spending, even without the 
sequester, will be at a 60-year low.
    I think these are policy issues that we really have to 
grapple with.
    Senator Collins. Well, just one final comment that I will 
make is sequestration does not discriminate between absolutely 
vital programs, such as several of the ones we have been 
discussing today, and programs that are duplicative, outlived 
their usefulness or are ineffective, and just taking a meat-axe 
approach does not make sense.
    We did finally pass a budget and a funding bill for this 
year that did some relief, and I do think that was one reason 
you are seeing a slight increase though I know Aroostook County 
could use far more than just five more of those food packs.
    Thank you, Mr. Chairman. You have been very generous with 
your time.
    The Chairman. Well, you have been very generous with your 
insight and thank you for your very, very penetrating 
questions.
    If we accomplished only one thing from this hearing, we 
could shout it from the house tops that on the good side the 
number of elderly poor has decreased from roughly one in three 
to one in ten as a result of Social Security, Medicare and so 
forth, but--and it is a big but, in capital letters--if those 
in poverty are combined with those living near poverty for the 
elderly poor, the estimates range up to it is 48 percent of 
that population.
    To me, that is inexcusable.
    How about this one? About a quarter of married couples and 
about half of single people depend on Social Security for 90 
percent of their income.
    What we have is a situation that is getting a little out of 
hand.
    Now we have had sequestration, and we have had all of that, 
but--I am reading from the Los Angeles Times: House Budget 
Committee Chairman Paul Ryan is taking aim at the Nation's 
poverty programs, unveiling an ambitious report Monday that 
will underpin other budget priorities in this election year.
    When he released the report, he said his observations are 
that Medicaid is a disincentive for work, and furthermore, that 
he spoke of Medicaid needed to be turned into a block grant 
program.
    Now what that means is you take all of the Medicaid money 
that is a Federal-state program, basically. In my state it is 
about 55 percent Federal, 45 percent state.
    You take all of that Federal money, and you give it to the 
state. You do not have any requirements on eligibility. It is 
all up to the states.
    Yet, that kind of testimony is directly in conflict with 
what we have heard here.
    Let me ask you, Dr. Neuman. On your video, you had this 
gentleman in West Virginia, $50,000 in medical debt. Only until 
then was he eligible for Medicare.
    Now West Virginia has expanded its Medicaid program. Well, 
that is great. Maybe they have some enlightened folks there.
    About half the states have refused to expand the Medicaid 
program that was part of the ACA that the Supreme Court said 
you cannot force it on the states, so half of the states--some 
of those are retreating now.
    In my particular state, it is over a million people 
additional that would be covered by Medicaid if you expanded 
it, paid 100 percent by the Federal Government, 90 percent by 
the Federal Government, only 10 percent by the state government 
three years hence.
    In my state, Floridians who are moving on up in years, 
before eligibility for Medicare, between 50 and 64, a quarter 
of a million people would be eligible in that age bracket, 50 
to 64, for expanded health care coverage through expanded 
Medicaid.
    It sounds like I am giving a speech, which I normally do 
not do when it gets around to questions, rarely, but it is 
worthwhile underscoring some of these things to try to 
highlight the testimony that you all have made.
    Let me ask you; anybody want to add anything more about the 
place of Medicaid and what it has done on the War on Poverty, 
particularly for those moving on up in years but are just shy 
of the age for Medicare?
    Dr. Neuman. Medicaid has been a phenomenally important 
safety net program for low-income people, but up until the 
Affordable Care Act many low-income people were not eligible 
for Medicaid and did not have health insurance.
    In the case of Mr. Carter in West Virginia, before he was 
65, prior to the Affordable Care Act, he might not have been 
eligible for any kind of Medicaid program, and, with the 
Affordable Care Act, had he been younger, he would have been 
protected against the crushing costs of health care that he 
obviously faced.
    The Affordable Care Act is designed to allow people in 
their 50s and early 60s, who would otherwise be at great risk 
of not being able to find affordable health insurance, if they 
could find it at all, get coverage either under Medicaid, if 
all the states were doing the expansions, or the exchanges, and 
it would provide enormous relief to people like the gentleman 
in the video because he would no longer have to face this 
medical debt that he is now incurring even as he is on 
Medicare.
    There is also an issue for people who are 65 and older 
raised by the block grant. It does not just affect younger 
people. It would affect, presumably, everybody who relies on 
Medicaid, both younger and older people.
    As you said, a block grant is effective in that it limits 
the risk of government. It is a good budgetary device, but it 
does so in a way that would shift costs to people in the 
program, most likely, and unravel what has been described by 
many people as a safety net for the poorest of the poor in our 
country.
    The Chairman. Interestingly, what does it do for the cost 
of Medicare if you have got a cohort of a population that has 
not been getting health care; now they get 65----
    Dr. Neuman. Right.
    The Chairman. [continuing]. They have not had the 
preventative care, and it compounds all of the problems as they 
get older and older and are now on the health care system of 
Medicare?
    Dr. Neuman. There was an interesting study done several 
years ago, showing the cost to Medicare of the uninsured as 
they aged onto the Medicare program.
    More recently, there was a report by the General Accounting 
Office that looked at the savings to Medicare that would result 
from providing coverage to people prior to their 65th birthday 
because people would get the health care services they needed 
rather than delay getting the coverage for the services they 
needed until they went onto Medicare and then perhaps had 
greater costs and great problems because they went without the 
care that they should have gotten earlier because they could 
not afford it.
    The Chairman. Who would like to comment about chained CPI?
    Chained CPI--let's just call it what it is. It is a cut in 
the COLA for senior citizens.
    Now the testimony we have had here today is senior citizens 
need every little penny that they can get, so what would 
chained CPI do to this group of the elderly poor?
    Ms. Entmacher. Well, I will start the discussion on that.
    It is, as you say, a cut in the Cost-of-Living Adjustment, 
but it is particularly dangerous because it is a cut that gets 
deeper and deeper every single year you get benefits.
    Who gets hit most by the chained CPI? It is people who tend 
to live longer and get Social Security longer; that is women. 
It is people who are very old, who are already at higher risk 
of poverty because of increasing health care costs and 
exhaustion of other assets.
    It is a Social Security cut that is actually targeted to 
have the biggest impact on the oldest and most vulnerable.
    It has been proposed by some on the grounds that it is a 
more accurate way of estimating the cost of living, but that 
certainly is not true for elderly people and people with 
disabilities because the chained CPI, like our current Cost-of-
Living Adjustment, does not treat the elderly any differently 
than other people, but the way they spend their budgets is very 
different.
    The point that Dr. Neuman made about how much higher the 
poverty rate is when you use the supplemental measure that 
takes account of out-of-pocket costs--the poverty rate is 60 
percent higher from nine to fifteen percent when you recognize 
how much the elderly have to spend on their budgets for health 
care, and that is with Medicare. These are people who have 
Medicare but still face enormous out-of-pocket costs.
    Cutting the COLA in this way is really not making the COLA 
more accurate. It is making it less accurate because it gives a 
smaller Cost-of-Living Adjustment to the very old just when 
their health expenses are at their highest.
    I mean, we did some calculations of what the impact would 
be because people say, oh, it is not so much money. Well, it 
starts off very small in the first year. It is 0.3 percentage 
points, but you add that year after year after year.
    I take as an example--and I think Barbara, Ms. Bovbjerg, 
mentioned that single elderly black women have very low Social 
Security benefits. The typical benefit is about $900 a month, 
less than a poverty-level benefit, for the whole year.
    By age 65, the cuts from the chained CPI are 6.5 percent. 
That is about $60 a month, and that may not sound like a lot to 
some people in this room, but as I know Dixie, Ms. Shaw, knows, 
it is a lot of money. It is a little more than a week's worth 
of food every single month that person could afford with that 
$60 a month, so that really, really hurts, and that is at age 
85, and it gets worse.
    This is an idea that I hope Congress moves on from and, in 
fact, if it thinks about the COLA, thinks about what would be a 
more adequate way of adjusting Social Security benefits.
    The Chairman. Just to reinforce your point, in our State of 
Florida, roughly nine percent of the people are considered 
below the poverty line, but when you add what you just said--
out-of-pocket medical costs and geographic differences in 
cost--that number almost doubles as the percent of people 
considered below the poverty line.
    Let me ask you about SSI. Two million people over 65 
receive Supplemental Security Income. What changes do you think 
we ought to be making to the SSI program to boost its effect on 
reducing poverty, anyone?
    Ms. Entmacher. I will take a first crack at this, and it is 
my understanding and hope that a bill to modernize and restore 
SSI will be introduced soon in the Senate comparable to one 
that was introduced in the House.
    It would raise what are called the income disregards in 
SSI. These were provisions of law that were put in, in 1972, so 
that seniors who had earned Social Security benefits, which are 
considered unearned income--I think that is wrong, but that is 
how they are treated by the law--could get a small portion of 
those benefits and augment their SSI benefits and have a little 
more money each month, and that amount was set at $20 back in 
1972, and it has not been adjusted since. Adjusting that for 
inflation would raise it to $110 a month.
    There is an earnings disregard to encourage people, even if 
they are elderly or have a disability, if they are able to do 
some work, which some can, maybe not substantial amounts but 
some. That amount was set at $65 back in 1972. If that were 
adjusted for inflation, it would be worth over $357 a month.
    The asset limits--$2,000 for an individual, $3,000 for a 
couple--mean that you have to be completely destitute to 
qualify for SSI, that you cannot keep a reserve for emergencies 
and that if you have struggled to put away some money, even 
though you have had very low earnings, and have a little 
accumulated in an IRA, you are disqualified from getting income 
support. This makes no sense, so among the reforms would be to 
increase those limits to at least $10,000 for an individual, 
$15,000 for a couple and maybe allow people to separately deal 
with IRAs.
    The last thing are some very complicated and harsh rules 
that, as I said briefly in my statement, mean that you have to 
report if a family member brings you groceries or provides 
shelter, which can lower your cash benefits by one-third.
    I should mention that those cash benefits, even if you get 
the maximum, are not enough to lift a person out of poverty.
    That is a very harsh rule if someone has received help from 
a family member while they are waiting for their SSI 
application be processed.
    I should say that one of the problems with SSI is that it 
is a complex program. It is administered by the Social Security 
Administration, but their funding for administrative functions 
has been reduced in recent years.
    I mean, we have been critical of the messages they give out 
and the advice they give people about delaying retirement, but 
they are strapped for resources.
    We talk about going into regional offices. Many of them are 
being closed.
    Well, SSI is particularly complicated, and they do not have 
the resources to help people apply, to let them know when they 
are eligible, how these rules work, how to avoid harsh 
penalties.
    I think there are changes, and hopefully, a bill will be 
introduced soon.
    That is, you know, a program--I mean, people say, well, 
really, Social Security should just focus on reducing poverty 
and should be less of a retirement security program for the 
middle class but should focus on the poor.
    I think, yes, Social Security can do better for low 
earners, and I have included some recommendations in that 
regard.
    I would encourage people who say we need to do more about 
elderly poverty, so let's cut Social Security benefits for the 
middle class, to start by fixing the program that we have that 
is an anti-poverty program for low-income elders, and that is 
SSI.
    The Chairman. Ms. Shaw, I want you to give us an example. 
You talked about heating and transportation, but you also 
talked about hunger. Give us a personal example that you 
observed in Maine of a senior citizen not getting enough food.
    Ms. Shaw. There are many, and I mentioned some in my 
written report that I submitted to you.
    It is not uncommon for us to go into a home because of our 
thrift stores. People donate things, and we are in and out of a 
lot of homes. Even the poorest of poor want to help us, and 
they will give us something, whether it be a couch or a chair 
or something that they do not have room for, so we are into a 
lot of homes.
    The Chairman. So what are they doing?
    Are they eating less nutritious? Are they eating not 
enough? Are they cutting their meals in half? What?
    Ms. Shaw. They are not eating enough. If you look in their 
refrigerator, you will see a half of a potato, and, if you ask 
about that, they will say, well, I cooked that a couple of days 
ago and I am just trying to make it last; I am out of potatoes, 
and we are in potato country, so that should not be.
    They are so proud. They do not want to ask. You really have 
to have eyes and ears in many of their homes, and that is why I 
say when we go in and see these things we do what we can to try 
to get something there to help, but that is one of the biggest 
challenges to help, and for many of them, it is their sense of 
pride.
    I like programs like, again--and I do not want to beat this 
to death, but the Meals on Wheels program, where they are in 
there seeing things, is so important--to get people, to get 
warm bodies in there, whether it be a homemaker service or any 
of those kinds of services that are in the homes and helping 
people and seeing for themselves because they will not tell and 
you really have to see a lot of the real desperate situations.
    The Chairman. How many county commissioners and mayors have 
I had come to see me about their programs of Meals on Wheels, 
of which they pay it from the community development block 
grants, CDBGs, and what have we been doing? CDBGs have been 
going down.
    Let me ask just a final question, and I want to turn back 
to Senator Collins.
    Since GAO is tracking significant decline in marriage 
rates, particularly in minority communities, your study finds 
that more people could fall into poverty because of the 
differential and that they would not be eligible for spouse and 
survivor benefits in Social Security and other marital 
protections in pension plans.
    Can you talk about the disparity there between married and 
unmarried in the elderly poor?
    Ms. Bovbjerg. Well, actually, with 401(k)s, it is not 
disparate at all. Spouses have no say, but we could talk about 
that another time.
    A part of what I think you are asking is whether we should 
have spousal benefits. Even though the percentage of 
beneficiaries who are reliant solely on their spouse's benefit 
is falling precipitously, those are still needed.
    Half of women, for example, have received some type of 
spouse-related benefit, either through the dual entitlement, or 
through their own work record and their spouse's if their 
spouse makes more money, or as a survivor, so it is important. 
They are still needed.
    We do talk in reports that we have done for this Committee, 
both the recent one on marriage but also the one on women in 
retirement, about different things you could do to protect 
single women.
    In particular, the divorce requirements in Social Security 
are that you be married at least ten years before you can have 
a spousal benefits. That cuts out a number of people right 
away. If that were reduced, it could make a difference.
    You could improve benefits for widows. They now are 
reduced. The family benefit, the household benefit, is reduced 
when the spouse dies and, for some, precipitously. For some, it 
is as much as by 50 percent.
    We also suggest some things that you could do more directly 
for single people or for people who are in poverty. We have 
talked about the special minimum benefit. We talked about 
caregiver credits. We have also talked about simply having 
supplemental benefits for low-income single workers, whether 
they are male or female. People are not eligible for spousal 
benefits by somehow adjusting the benefit formula.
    I did want to mention in the context of SSI that it is 
really important to think about these programs together when 
you are making changes, particularly at the low end of these 
benefits, because the way that SSI is structured now, if you 
raise someone's benefit and they were dually entitled, it would 
count against them for SSI, which is probably not what you have 
in mind when you are trying to raise their benefits.
    I think it is really important that these things be 
addressed together and to think at the same time, just a little 
plug for SSA, about the administerability of the changes. SSA 
has had a lot of trouble since 1972 administering SSI. There 
have been a lot of overpayments. They have struggled with some 
of the rules. Any changes to these programs not only need to 
take each other into consideration but also the 
administerability of the benefit change.
    The Chairman. Dr. Neuman?
    Dr. Neuman. Yes, I also wanted to comment on the 
integration of programs that serve the same population.
    You had asked a question earlier about SSI, and we have 
talked about some of the changes that could be made to SSI, for 
example, increasing the asset test. I want to point out the 
connection between SSI and full Medicaid benefits in many 
states so that by improving or raising the asset test under SSI 
the connection would be that more people, more very low-income 
people, who are Medicare, would qualify for full Medicaid 
benefits because the two programs are connected, and it is a 
really good example of showing the interconnectedness of 
programs that people think about as income security versus 
health care, and they are serving the same people, and by 
making a change in SSI, that would make more people eligible 
and would have spillover effects in helping more people with 
very low incomes, but assets just above the level that we 
talked about, also qualify for Medicaid.
    The Chairman. Senator Collins.
    Senator Collins. Thank you, Mr. Chairman.
    I just have two final questions.
    Dr. Neuman, the labor force participation rate for women 
has risen dramatically since Social Security was first passed. 
Do you think that will ultimately translate into a lower 
poverty rate for women?
    We have learned today that women are disproportionately 
affected in their senior years, or, is the biological fact that 
women live longer--does that mean that they are still going to 
be at greater risk for poverty?
    Dr. Neuman. I am not a demographer, so I would defer to a 
demographer on this.
    I do believe, though, that higher incomes through people's 
working lives and different types of jobs will translate, 
should translate, into lower poverty rates for women when they 
are on Medicare as they grow older although income does tend to 
decline with age.
    For that to be true, women would not only need to earn more 
but to have different kinds of jobs. They would need to have 
continuous participation in the workforce, not work part-time 
as many do today, but these changes should have a beneficial 
effect over time.
    Senator Collins. Thank you.
    Yes, Ms. Bovbjerg.
    Ms. Bovbjerg. If I could jump in, women earn less than men. 
This affects their benefits. They also work less.
    When I am talking about earning less, all other things 
being equal, they earn about 81-82 percent of what men earn. 
They are more frequently caregivers, so they will stop work for 
that. They are more frequently working part-time. There are all 
these things that mean that benefits on their own earnings 
records from Social Security will be lower.
    Increasingly, as we are in a 401(k) world, they have to 
worry not only about their own retirement saving, which your 
bill acknowledges is difficult for individuals in managing that 
and figuring out what to do when you retire, how to pull it 
down. They also have to wonder if their spouse is going to 
leave the money in the 401(k) or withdraw it and do something 
else, and they might not even know, or a former spouse.
    There are protections that can be applied, and certainly 
those protections are applied to defined-benefit plans, where 
spousal consent is necessary for withdrawals of spousal and 
survivor benefits, but with a 401(k), it is a much tougher 
world, and that has particularly had a negative impact on 
women.
    Senator Collins. Thank you.
    Ms. Shaw, I am going to ask you my last question.
    We have talked a lot about programs that make a real 
difference for our seniors as far as their standard of living. 
We have talked about Medicare, Social Security, obviously, SSI.
    What we have not talked about, which is particularly 
important in the neck of the woods that you and I come from, 
are the energy assistance approaches, like the Low Income 
Heating Assistance Program and the weatherization program. 
Could you comment on your observations on the role that those 
two programs, the LIHEAP program and weatherization, play in 
rural America where we have older housing stock and, as you 
have pointed out, we have had a very cold winter?
    Ms. Shaw. Catholic Charities does not oversee those 
programs, so I am vaguely familiar. What I have is information 
that I hear and see on the street, if you will.
    What I hear with the LIHEAP funds is it is an incredible 
worry to everybody that hopes that they are going to get 
anything to help with heating assistance in Northern Maine, and 
people sit and listen on every word that is coming out of 
Washington or any place that affects those funds because they 
are vital, absolutely vital, to the well-being of people in 
Northern Maine, who struggle with all of the heating needs.
    I would just hope that those would continue to come and 
that they would come in a timely manner, and one of the other 
things I hear, especially for the elderly, is the process is 
complicated. They did not come from a computer age--the seniors 
that we see, so the process is complicated, and then, again, 
because of the lack of administration funds, it is my 
understanding that there is not a lot of people that are there 
to take the calls, so you can call and call and call and call 
and wait and wait and wait.
    Then oftentimes they come in late, and if the LIHEAP funds 
come in April, you have already frozen to death by the end of 
November. In Maine, it is cold most of the months we have. We 
get a couple that are pretty warm, but like I had said in my 
report, many old people, or elderly people, are using heat 12 
months a year.
    Senator Collins. Exactly.
    Thank you very much. I want to thank all of our witnesses 
for excellent testimony.
    Particularly, I want to thank Ms. Shaw for coming all the 
way from Caribou, Maine to share her experiences with us, and 
thank you for the great work that you do.
    I think it was significant, Dr. Neuman, that in your video 
it was also Catholic Charities that was providing the low-
income housing for one of the two people that you featured.
    Dr. Neuman. I will say, if I can, there is a longer version 
of this video that focuses specifically on--it talks about 
seniors and hunger, and for those who are interested in that 
issue, it really points out that this is a much bigger issue 
than I think people generally understand.
    Senator Collins. Thank you.
    Thank you, Mr. Chairman.
    The Chairman. Thank you, Senator Collins, and thank you to 
the panel. This has been most illuminating. I just hope that 
the testimony of today will reverberate far beyond the walls of 
this Committee hearing room.
    I had always been taught that it is the responsibility of a 
society to take care of its young and its old, and we have 
certainly, thanks to you, shone the spotlight on one of those 
problems today.
    Thank you.
    The meeting is adjourned.
    [Whereupon, at 3:04 p.m., the Committee was adjourned.]



      
      
      
      
      
      
      
      
      
      
      
      
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                      Prepared Witness Statements

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                       Statements for the Record

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