III. ENTITLEMENTS AND THE ELDERLY

Table of Contents/Entitlement Report/Introduction/Foreward/I/II/III/IV/V/VI

Chart 3-1. Although only one in eight Americans is aged sixty-five or older, the elderly receive three-fifths of all federal entitlements. Benefits for the elderly in 1960 and for children in 1960-1985 are tabulated from a variety of sources, and include some author estimates. Benefits for the elderly in 1965-1995 and for children in 1990 and 1995 are based on CBO tabulations in the 1993 Green Book (except that they add author estimates for veterans' health care). Benefits to working-age individuals are calculated as a residual for programs in which estimates for the elderly and children are available. "Age of beneficiary unknown" includes programs (e.g., farm aid) for which no estimates of benefits by age were possible.

Source: "Federal Benefits for the Aged," published in Special Analyses to the United States Budget (OMB; volumes for FY 1972-79) and in Statistical Abstract of the United States (Census; volumes for 1979-1987); "Trends in Federal Spending for Programs Targeted on Children" and "Trends in Federal Spending for Programs Targeted on the Elderly" (Minority Staff Reports of the House Budget Committee; December 1988 and January 1989); Robert Clark and John Menefee, "Federal Expenditures for the Elderly, The Gerontologist (April 1981); and 1993 Green Book (Committee on Ways and Means, U.S. House of Representatives; July 1993), Appendix M.

Chart 3-2. Federal benefits to the elderly have grown dramatically over the past three decades... See chart 3-1 for sources and definitions.

Chart 3-3. ...and in per capita dollars now dwarf benefits going to other age groups.

See chart 3-1 for sources and definitions. Per capita dollars are calculated using population data in Statistics of the United States: Colonial Times to 1970 (Census; 1975), Table A.29-42, and Statistical Abstract of the United States (Census; various years). Constant dollars are calculated with the fiscal year PCE deflator.

Chart 3-4. Even including nonbenefit outlays, per capita federal spending on the elderly towers 11-to-1 over per capita spending on children.

Counting entitlement outlays alone, the ratio of per capita federal spending on the elderly to per capita federal spending on children was 14-to-1 in FY 1990. Adding in nonentitlement outlays that are specifically targeted at the elderly and children somewhat lowers that ratio to 11-to-1. For children, these non entitlement outlays include federal support for elementary, secondary, and vocational education; immunization and preventative health services; youth training and employment services; foster care and adoption assistance; and Head Start. For the elderly, nonentitlement outlays include outlays for the National Institute on Aging, Older Americans Act employment, and senior volunteer programs. Source: For entitlement benefits, see chart 3-1; for nonentitlement benefits, see FY 1992 Budget of the United States Government (OMB; 1991); for population data, see chart 3-3.

Chart 3-5. Far from being a floor of protection for the poor, Social Security writes the biggest checks to affluent Americans.

Average benefit payments are based on unpublished CBO analysis of Current Population Survey (Census) and Statistics of Income (IRS) income data. (See chart 1-10 for fuller description.) Source: Neil Howe, How to Control the Cost of Federal Entitlements (National Taxpayers Union Foundation; 1991).

Chart 3-6. Our lavish federal pension systems...

Source: Unpublished data from the Survey of Income and Program Participation (supplied by the Bureau of the Census).

Chart 3-7. ...also pay the most to beneficiaries who have the most: witness federal military pensions...

See charts 1-10 and 3-5 for source and description of data.

Chart 3-8. ...or federal civil service pensions.

See charts 1-10 and 3-5 for source and description of data.

Chart 3-9. Altogether, in fact, the typical affluent household receives as much in federal benefits as the typical low-income household.

See charts 1-10 and 3-5 for source and description of data. Means-tested benefits are AFDC, SSI, and Food Stamps. Average benefit payments are averages for all households (rather than only beneficiary households, as in charts 3-5, 3-7, and 3-8).

Chart 3-10. Federal health-care spending on the elderly: an explosion that plays a central role in our national cost crisis...

Based on HCFA tabulations of personal health-care expenditures by age and source of funds. Per capita totals include all federal, state, and local benefits. Constant dollars are calculated with the GNP deflator. Source: Charles R. Fischer, "Differences by Age Groups in Health Care Spending," Health Care Financing Review (Spring 1980); Daniel Waldo et al., "Demographic Characteristics and Health Care Use and Expenditures by the Aged in the United States: 1977-1984, "Health Care Financing Review (Fall 1984); and Daniel Waldo et. al., "Health Expenditures by Age Group: 1977 and 1987, " Health Care Financing Review (Summer 1989).

Chart 3-11. ...and helps make America the most exorbitant health-care spender in the world.

National currencies are converted to U.S. dollars using purchasing power parities. Estimate for U.S. national health-care spending in 1993 is a CBO estimate. Source: George Schieber et al., "Health Spending, Delivery, and Outcomes in OECD Countries," Health Affairs (Summer 1993); and Projections of National Health Expenditures: 1993 Update (CBO; October 1993).

Chart 3-12. A troubling distinction among industrial nations: in no other country do public benefit policies so favor the old.

Social welfare spending includes public outlays for pensions, health, unemployment, family benefits, and education. Source: Aging Populations: The Social Policy Implications (OECD; 1988).

Table of Contents/Entitlement Report/Introduction/Foreward/I/II/III/IV/V/VI