October 23, 2014

Seniors Will Still Get More--Under Any Budget Plan

Volume I, Number 2
June 16, 1995

If the current push to balance the budget falters, it will be because defenders of the status quo succeed in misrepresenting it as a mean-spirited assault on seniors.

Let's set the record straight. Neither the Republicans nor the Democrats propose spending less on seniors. In fact, the most striking feature of all budget plans before Congress--including the Senate and the House Republican plans--is that they provide for an ever-rising share of federal outlays to go to the elderly.

What the Elderly Get

In fiscal year 1995, the Treasury will pay out an average of $15,456 in entitlement benefits to each American 65 and over, primarily in Social Security, Medicare, Medicaid, and federal pensions. Excluding interest, all other spending (averaged over all Americans) will come to $2,942 per capitau--less than one-fifth as much.

And after the supposedly draconian cuts Congress proposes? Under the Senate budget plan, benefits per elderly American are slated to grow by $2,076 in inflation-adjusted dollars from now to 2002--up by 13 percent. Under the House plan, with its deeper "cuts" in Medicare, real benefits would grow by $1,596--up by 10 percent. Meanwhile, per capita federal spending on every other function of government--from national defense to the national parks--will drop in real terms.

No Revolution

Common wisdom has it that the current budget debate portends a revolution in the size and shape of government. Really? The most enduring budget trend of the past three decades has been the rising dominance of senior benefits--from 17 percent of noninterest outlays in 1965 to 40 percent in 1995. Not only would this share continue to grow under both the House and the Senate budgets--to 48 and 47 percent by 2002--it would rise even further than under current law.

Yes, the Republican plans slow the growth in elderly benefitsuas, to a lesser extent, would the President's. It is Orwellian, however, for critics to claim that a 10 percent real growth in benefits over the next seven years amounts to a reversal in America's long-standing commitment to provide a safety net for seniors.

Senior Benefits versus Other Federal Outlays: Benefits per Elderly Person and Other Outlays per U.S. Capita, in Constant (Inflation-Adjusted) 1995 Dollars

 

FY 1995

CBO Baseline: FY 2002 Senate Budget: FY 2002 House Budget: FY 2002
Senior Benefits $15,456 $19,293 $17,532 $17,051
$ Change: 1995-2002   $3,838 $2,076 $1,596
% Change: 1995-2002   25% 13% 10%
Other Federal Outlays $2,942 $3,043 $2,459 $2,484
$ Change: 1995-2002   $102 $-483 $-457
% Change: 1995-2002   3% -16% -16%
memo: senior benefits as % of noninterest outlays 40% 45% 48% 47%
Note: Senior benefits are entitlement benefits going to persons age 65 and over; projections are based on the 1990 elderly shares of Social Security, Medicare, Medicaid, and other benefit programs as tabulated in the 1993 Green Book. Other outlays exclude net interest.

FACING FACTS AUTHORS: Neil Howe and Richard Jackson CONCORD COALITION EXECUTIVE DIRECTOR: Martha Phillips