When the 20th century dawned there were fewer than 5 million older Americans. A husband and wife could expect that one of them would probably die before their last child left home. The average life expectancy was 47 years. Now all that has changed. Our once- small number of older Americans has exploded to 34 million. A husband and wife at age 60 today can fully expect to spend their next 17 years together.
By the year 2035, although the general population will have grown by only 35 percent, the number of persons over 65 will grow by 119 percent and of persons over 85 by 206 percent. The whole shape of America's population will have altered in ways that will have dramatic impact on politics, the economy and society in general. I believe that this impact, which is already beginning to be felt, will be overwhelmingly positive. So does the administration I serve. The vast majority of America's elderly today are healthy, active, financially secure and proudly independent. The "senior market" plays a key role in consumer spending and saving. One-fifth of the population, Americans over 55 account for nearly 26 percent of all consumer income and 27 percent of all consumer spending. According to Internal Revenue Service figures, 46 percent of all reported savings account interest is earned by people over 65, although they account for only 11 percent of the population.
As a group, older Americans are a vital and positive part of the economy--not a drain on it--and, as savers, spenders and investors, they are also playing an important part in the president's program for economic recovery.
The recent decline in the inflation rate and the prime interest rate is heartening early evidence that the program is working. And in working, it is coming to the aid of millions of older Americans on fixed incomes. Senior citizens have also begun to benefit from a wide array of tax reforms including liberalizations in the capital gains tax, tax exclusions for older Americans selling their homes, and estate tax provisions. Most important, the Economic Recovery Tax Act of 1981 means substantial and permanent relief from inflation and taxation. Besides a series of personal income tax cuts mounting to 25 percent over three years, beginning in 1985 personal tax rates and exemptions will be indexed to keep up with inflation. Old and young Americans alike will no longer be held hostage to "bracket creep."
Cutting spending as well as taxes has been a necessary part of the economic recovery plan. But, while eliminating non-essential federal spending, the Reagan administration has been careful to safeguard services to those poor and elderly who depend on the government. In the fields of health care and human services, for example, federal spending is actually going up, by over 15 percent in 1981 and by about another 10 percent in 1982. In fiscal year 1982, almost 30 percent of the federal budget will go to services and programs aimed at elderly Americans who make up only 11 percent of the population, a favorable ratio of 21/2 to 1.
The administration also supports the continuance and improvement of the Older Americans Act. This act is important both for the human services it provides--a wide variety of home and community-based services to the elderly including home health care, transportation, meals and counseling --and for the independence and human dignity that it affords to countless senior citizens who want to remain in their own homes and communities, and stay out of institutions.
President Reagan has also kept his pledge to defend the integrity of the Social Security system. He has repeatedly made clear that his administration is dedicated to preserving the benefits earned by Americans already on Social Security, and he has advocated inter- fund borrowing from the disability insurance and the hospital insurance trust funds to address the system's short-term funding problems. Those problems are serious, and the long-term picture remains challenging. Despite the biggest peacetime tax increase in American history passed in 1977--a tax increase that former president Jimmy Carter said would keep Social Security viable for the rest of the century and beyond--the system has been operating in the red for seven straight years. The public, like President Reagan, realizes that this problem must be addressed. A recent Harris Poll revealed that 54 percent of the public has "hardly any confidence" in the Social Security system as presently constituted. President Reagan is determined to restore the basis for public confidence in the system, and he has invited Senate Majority Leader Howard Baker and Speaker of the House Tip O'Neill to join with him in this vital undertaking by forming a bipartisan task force on Social Security that will not only study the problem, but will also work to form a functioning, bipartisan consensus so that the necessary reforms can be passed into law.
On a more personal level, Ronald Reagan is himself an outstanding example of a person who has not allowed age to become a barrier to public service, and his long legislative battle to have the mandatory age limit waived for one of the most important health posts in the federal government on behalf of his nominee for surgeon general, Dr. C. Everett Koop, is a clear demonstration of the president's commitment to battle discrimination against older Americans.
Breakthroughs in attitudes about age and the aging, the development of the concept of "wellness" (everday living habits and inexpensive preventive measures that can add years of healthy, active life to the senior citizens of today and tomorrow), and the building of a stronger, healthier, more expanding, free economy--all of these trends and administrative initiatives promise a brighter, more rewarding future for older Americans of this and future generations.