Nearly half of the nation’s elderly population is “economically vulnerable” and would be particularly hard hit by even modest changes in the Social Security and Medicare programs being considered to slow the growth of the nation’s long-term debt, according to a new report.

The liberal Economic Policy Institute said that 48 percent of the elderly population earns less than double the supplemental poverty threshold, putting those seniors at financial risk if their income is cut even slightly. Older blacks and Hispanics are especially vulnerable, the report said, as the vast majority of them live on the financial edge.

There is no fixed supplemental poverty line for the entire nation, as the measure shifts depending on the cost of living in various parts of the country. The national average for single adults is $10,652 — but that ranges from $8,313 for an Iowa homeowner with no mortgage to $15,079 for a homeowner paying a mortgage in Hawaii, according to David Cooper, an EPI researcher who co-
authored the report. The government estimates that about 9 percent of the elderly population lives in poverty.

The District of Columbia has the nation’s highest share of financially vulnerable senior citizens, with nearly three out of five elderly people living on incomes that amount to less than double the supplemental poverty threshold. In Maryland, 48 percent of seniors are vulnerable, and in Virginia, 41.6 percent of seniors have incomes equal to less than half of the supplemental poverty line.

“After working hard their entire lives, millions of our elderly are struggling to pay for basic needs like food, medicine and housing, even with Social Security and Medicare,” said Elise Gould, an EPI economist and co-author of the report. “As such, policymakers should consider the dire consequences proposals to restructure these programs would have on our parents and grandparents, shifting more costs unto them when many are already barely making ends meet.”

President Obama is among the policymakers who have proposed reducing Social Security’s annual cost-of-living adjustment by tying it to a slower growing inflation measure. As the nation’s population ages, Social Security, Medicaid and Medicare account for an ever-larger share of federal spending. The programs consume more than two out of five dollars spent by the federal government — a proportion that is expected to grow for the foreseeable future.

Meanwhile, the trust fund that supports Social Security is projected to run out of money in 2033. At that point, the retirement program would collect only enough in payroll taxes to pay about 75 percent of benefits. Similarly, the trust fund that holds Medicare surpluses is projected to be exhausted by 2026, meaning that program could afford to pay only reduced benefits if policymakers did nothing to fix its finances.

And if the nation’s entitlement programs are on shaky ground, so are many senior citizens. As a result, proposals to trim the retirement programs have ignited strong opposition from liberal lawmakers and even some Republicans.

Andrew G. Biggs, a resident scholar at the American Enterprise Institute, said the entitlement programs could be overhauled in ways that both save money and protect those who need it most.

“On the one hand, clearly a lot of people depend on Social Security, but we could still spend a lot less on Social Security and eliminate poverty among the elderly because a lot of benefits are going to people well above the poverty line,” Biggs said. “What is bankrupting the country is not protecting poor people in retirement but protecting middle-class and rich people in retirement.”

Although most ideas to trim the programs have come with the promise of shielding the lowest-income retirees from the brunt of the impact, groups such as EPI are emphasizing that any cut is too much for seniors living on the edge. They say many policymakers underestimate the financial strain that many senior citizens are under, particularly from ever-increasing medical costs.

“There is a large share of elderly Americans who are economically vulnerable. A single economic shock could push them precariously close to or into outright material depravation,” the report concluded. “. . . If anything, the findings in this paper suggest a need for strengthening social protections for the elderly, not cutting the vital yet bare-bones protections they currently have.”

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