Which brings us to the heart of the whole debate about aging America and what it means. Should the United States focus its policy dollars on the elderly, a group that will be growing in size and political influence as the Boomers age, or should it focus its resources on the children, where the growth of poverty has been most substantial over the last few decades?
The answer, of course, is ”yes.” It cannot afford to ignore either area, because both are crucial to the nation`s future.
These questions cut across a lot more territory than their brevity implies. You can`t address poverty among children without also addressing medical coverage for the 36 million elderly people in the U.S. who don`t have it. Housing, nutrition, education at all levels-they are all destined to be part of the debate. Should a society really separate the needs of its elderly from the needs of its newly born?
This division has already led to some consequences, such as the congressional stumbling last year over the issue of catastrophic care. Almost everyone was for the idea when it was proposed in Congress a few years ago, because they recognized that given the solid-gold demands of modern medicine, elderly Americans could face financial ruin and misery if they should become victims of catastrophic illness.
So, they said, why not create a government program to cover those costs?
The problem was funding. Even the milder economic projections suggested a multibillion-dollar effort. The money couldn`t come from the general fund because it was already strapped by deficits. In its collective wisdom, Congress decided the group most likely to use the benefit should pay for it-the elderly. The alternative was to add the cost to the deficit, loading it on future generations of debt payers.
President Ronald Reagan signed the bill into law, and it wasn`t until months later that the message to aging America actually hit home-they were going to have to pay for their own program in the form of a surtax, with the wealthiest of the retirees paying the most.
To describe matters as hitting the fan is understatement.
Even Chicago Rep. Dan Rostenkowski, master of compromise and powerhouse on the Hill that he is, found himself pursued down the street by senior citizens who wanted to bop him on the head because of the surcharge. Again in its wisdom, Congress shuddered and, in response to the complaints of a very vocal minority, folded its cards. It was an ugly development, and it left a bad taste all around.
Yet catastrophic care carries a relatively small price tag compared to some of the programs that are likely to develop as the society ages. The price for a long-term care program, for example, another aging-agenda item, is likely to be huge. Who will pay for that? And national health insurance? And nutrition and education programs for children? And housing programs, as the elderly play a larger and larger role in the population?
Lamm says the United States has already added ”so much unfunded liability” to the future of its children that something called ”generational equity” has emerged to translate concerns about long-term debt for future generations into political action today.
The pessimists say the United States is headed for nothing less than
”generational warfare” because of the demands a large population in retirement will put on a younger, smaller generation in the workplace. Even issues that may seem to have been resolved-Social Security funding, for example-are likely to be viewed in a new light.
In a seminar entitled ”Children at Risk: Who Will Support Our Aging Society?” at the University of Denver in 1988, when the issue of generational equity was bubbling, one participant was A. Haeworth Robertson. The former chief actuary of the Social Security Administration and the author of the 1981 book, ”The Coming Revolution in Social Security,” he was invited as president of the Retirement Policy Institute.
At the seminar, he noted that about 16 percent of the nation`s payroll currently goes to Social Security (half paid by workers, half by employers)
and that this level of funding is locked into law for the indefinite future. But what will Social Security have to pay out once the Boomers reach retirement, expanding the number of demands on the system?
This is where we get into the issue of selective statistics, projections and the tendency to pick the numbers that fit best into your preconceived notion. Using the most favorable set of numbers endorsed by Congress and the Social Security Administration, he said that the cost of Social Security will eventually rise to 23 percent of payroll. Not so bad. See, everything will be fine.
However, that can only happen if the society has more children than it has had over the past decade and only if the increase in productivity in the workplace is higher in the future than in the past.
At least one of those projections-more children-is probably doomed. Women are marrying later in life and playing a bigger and bigger role in the workplace, and that trend has a tremendous impact on birthrate. Many of those who have babies at all have them later in life, and they limit the number to one child. As for productivity increases, the very thought of it is the holy grail sought by every true crusader of industry.
If you chart the same course using the Social Security Administration`s more pessimistic set of numbers, ”which I personally believe are the more realistic assumptions,” Robertson said, total costs will climb to between 38 and 40 percent of payroll.
”Assume the so-called pessimistic projections prevail and then ask yourself if we will collect enough to make good on our promises. If I were only interested in myself, I would just care about what happens in the next 25 years because I probably won`t be around more than that long,” Robertson said.
”We should collect about 96 percent of what we need to make good on our promises. . . . So I`m more or less home free. But you Baby Boomers are going to be reaching age 65 starting in the year 2011. The way things are structured now, we`ll collect only about 57 percent of what we need to pay benefits during the 25-year period after 2011.”
Why?
Fewer children and longer lifespans are the simple answers. There`s a little bit of old-fashioned greed involved too, along with the tendency to postpone solving difficult problems.
In the terminology of the Bush era, it`s basically the pie thing. Understand? The pie gets smaller, but people still want a big slice.
What does that mean?
”We will need more people working longer to produce a bigger pie so we can all cut as big a slice as we want,” Robertson said.
”If we keep letting people retire in their early 60s, the pie won`t change in size, but the number of people wanting pieces of the pie will continue to grow. It`s that simple. The only real problem emerges if we refuse to change-and here I not only mean our Social Security system but most of our other institutions as well.”
So the idea of retirement at 62 might melt away. The idea that everyone is entitled to Social Security might come under fire too. The popular way of phrasing this is to suggest that Donald Trump or Malcolm Forbes will have no need to await their government checks, so why should they and a whole host of other wealthy, comfortable people get them at all? Shorthand for this is
”means testing.”
Although the Social Security fund currently has a big surplus, that money is becoming more and more attractive to budget balancers who see it as one potential answer to the deficit problem. It is already used in a federal accounting trick that makes the deficit look smaller than it really is. If Social Security is returned to a pay-as-you-go system, the weight is likely to land heavily on the shoulders of future workers, who won`t like this burden very much. Does this scenario hold the potential for that threatening split in the society between old and young?
Some groups say yes. Others refuse to accept warfare between the generations as a likelihood. Instead of cranking and complaining about the future, they are hard at work trying to change it. Small things are important in this contest, such as preparing to cope with the new numbers.
Bruce Freed directs the Washington-based Americans for Generational Equity, and change is his business.
”I think there has been a growing realization that you have to approach this situation positively in terms of how we prepare the society to be able to make the change it needs for a much more highly productive work force,” he says.
”If we are going to succeed, there are going to have to be productivity levels we haven`t seen in the past. We`re talking about generating revenues from a smaller work force.
”But then you are also going to have to take a look at how you expand that work force by having major changes in retirement policy, people working older, perhaps working longer, maybe not at full-time jobs. But they will be working at ages they traditionally have not been, working and contributing revenues.”
The way things work now, funding current government needs through debt, simply won`t work in the future.
”How do you set spending priorities and how do we allocate public and private resources to be sure we are going to be able to invest in the future and meet the needs of the next generations and future generations?” Freed asks.
”Because up to now, we have been meeting current consumption and we have been paying for that through debt, borrowing on the future. That places great constraints on the ability of future generations to meet their immediate needs and then be able to deal with the needs of the future.”
Is there an up side to the coming change?
Absolutely. Lots of them. All it takes is a look at any of the magazines for the aging to see that senior citizenship has changed. If the old image of aging was Gramps in his rocker on the porch remembering D-Day and Grandma puttering in the kitchen over a perpetual cookie assignment, many of those same characters are now into tennis, golf, exercise machines and good times.
There is also much to be said for experience. And one thing the Baby Boomers will bring to the future is plenty of experience. In the workplace, they will be ”value-added” employees, dependable and productive.
The chance to have a healthy old age is also a tremendous development, one that certainly outweighs concerns about politics. But it`s going to take long-term planning, individually and on the part of the government, to make certain the potential comes to life.
Even the smaller size of the future work force is full of potential. If the surplus of available workers was one reason that no one had to find the solution for urban poverty and dismal education, a tremendous opportunity now awaits black teenagers, long the major victims of the highest unemployment rates.
”The few remaining pockets of unemployment will disappear,” says Fabian Linden of the Conference Board, who argues the society is worrying too much about a future that is full of promise. ”Full employment will be the new norm. . . . It will be harder for companies to transfer employees, since both spouses are likely to need jobs. These couples may now feel confident that their job prospects are good even if they turn down a promotion.”
Linden also sees a bright side to the aging of the Boomers. The strain will be no greater, Linden argues, than the strain the Boomers caused on the public structure when all 75 million of them marched off to school a couple of decades ago.
Maybe the brightest potential of all rests within the organizations that are anticipating change and trying to define and cope with it in ways that bring people together rather than drive them apart. Lamm is not alone in future-gazing.
Janet S. Otwell, for example, is director of the Illionis Department of Aging. Concerned about the strains that are ahead, she and her staff have created an organization called ”Ninety for the `90s.”
It is a big networking program aimed at drawing together leaders from business and labor, education, communications, health and religion. What she has been saying about the group cuts right to the heart of the questions the nation faces.
The aging network itself is simply not big enough to handle the challenge. That is why it is reaching out to the other channels of power to look for some accurate descriptions of what the future will bring and for some potential solutions to long-term problems.
”Ninety for the `90s” will be issuing its report and recommendations this spring.
Perhaps the most pleasant bureaucrat of them all, Otwell is a traveling library of information on aging, and within a week after a meeting with a reporter, she turned over a stack of articles, pamphlets and books addressing the subject.
One of the most interesting pamphlets was drafted by the Gerontological Society of America, admittedly a special-interest group. It is titled ”The Common Stake: The Interdependence of Generations.”
The wisdom of this little booklet is that after noting that aging America reflects the diversity of the nation and should not be viewed as one group with a single set of interests, it describes two directions policy makers can take.
They can line up across a political no-man`s zone to scrape and battle in a divisive, ugly spat for federal dollars, or they can recognize that the very definition of society implies strong connections among all ages and categories.
Former Social Security Commissioner Robert Ball reached eloquence in describing this relationship in his commencement address at the University of Maryland in 1985:
”We owe much of what we are to the past. We all stand on the shoulders of generations that came before. They built the schools and established the ideals of an educated society. They wrote the books, developed the scientific ways of thinking, passed on ethical and spiritual values, discovered our country, developed it, won its freedom, held it together, cleared its forests . . . .
”Because we owe so much to the past, we all have the obligation to try to pass on a world to the next generation that is a little better than the one we inherited, so that those who come after, standing on our shoulders, can see a little further and do a little better in their turn.”
