THE BASIC problem faced by the conferees now at work on a child care bill is not enough dollars to help poor families with children in all the ways that the House and Senate separately proposed. In the Senate bill, however, this problem is compounded. A sixth of the money that it would provide without equivocation (as distinct from the money that it would allow to be squeezed if possible out of the appropriations process at the expense of other programs) would go not to families with children but to the elderly.
To fend off Republicans who were thought to have the votes for more, Democrats agreed to include in the bill a liberalization of the Social Security earnings test. This is a limit on how much a supposedly retired recipient can continue to earn without having his benefits docked. Some Republicans led by Sen. William Armstrong would repeal it if they could. The bill instead would merely ease it. Instead of $9,360, a recipient would be allowed to earn $10,560 this year (the amount would continue to be indexed thereafter) without loss of benefits. The loss would also be reduced on the first $5,000 above that point from $1 in benefits for every $3 in earnings to $1 for every $4.
Proponents say it is only fair as well as sensible to let willing people continue to make an economic contribution, support themselves and pay taxes after retirement age; that the earnings test penalizes and discourages such activity; and that it bears hardest on the struggling elderly barely able to make ends meet if they don't work. In fact much of this is a false front for what would be a major federal gift to elderly people who are relatively well-off. Even the modest provisions in the Senate bill would cost an estimated $2 billion over five years -- repeal would cost vastly more -- and less than a fifth of the benefit would go to households with incomes under $15,000; more than half would go to those with incomes more than four times the federal poverty thresholds.
That is not the way to spend the next federal dollar in a tight budget year. But even if it were, in distributional terms this is the worst possible bill against which to charge the expenditure. In part because of their voting power, in part because of need, the elderly have stood at the head of the federal line for years. One of the greatest social accomplishments of the past 25 years has been the increase in their standard of living; today the poverty rate for the elderly is below that for the society as a whole. Regretably, the same support has not been given to needy families with children, who have fallen behind. A fifth of the nation's children are now poor. This is their bill, already under strain, and it would be an enormous injustice if, in behalf of the elderly -- above all the better-off elderly -- a part of it were snatched away.