New Poverty Window Opens: 55 to 67 [View all]

[Tom Rinaldo]

Last edited Mon Dec 10, 2012, 05:37 PM - Edit history (1)

Social Security and Medicare were instituted to combat the damning scourge of Senior poverty in America. Today most Americans may be living longer, but becoming poor younger. Our economy has changed since the 1960’s and that change has not been kind to the Middle Class, especially to workers over 50. Increasingly they are targeted as a cost cutting opportunity by company managers seeking to fatten their bottom lines. Once people in their 50’s and early 60’s could count on achieving their highest incomes in those years that directly preceded retirement Not any longer, now their larger paychecks make them the prey of corporate knives.

When layoffs happen in that age group, future job prospects are uncertain at best. One thing though is certain, odds are that any employment they might still secure will be at substantially less pay and with fewer, if any benefits. That is the essential backdrop to the current negotiations about the so called fiscal cliff. The wave of new poverty now hitting Americans over 55 is, to a large extent still happening below the radar. Older Americans who had been preparing for their pending retirement have had to revise their plans radically. Many now stay afloat in a manner reminiscent of a middle class lifestyle only by tapping into resources now that were meant to sustain them in later years.

Gone are the days of corporate pensions and gold watches gratefully given for decades of loyal service. Millions of Americans are now limping toward the finish line of their working careers, trying to hold on until programs like Social Security and Medicare finally kick in to give them a life sustaining boost. What is the response out of Washington to the emergence of this new window of Senior poverty? A drive to cut back “entitlement” spending is now gathering momentum. One of the proposals getting most of the buzz, especially in Republican circles, is to raise the eligibility age for Medicare by two years to 67. With their incomes plunging and their personal resources drained, how will many Americans survive being forced to forgo the availability of affordable health care for an additional two years? The answer is some won’t.

How much money will the federal budget save by denying Medicare to Americans until they reach 67. Most say on the order of 15 Billion a year, or 150 Billion over a decade. Let’s put that into perspective. By allowing the Bush Tax cuts to fully expire, as originally intended, simply on incomes ABOVE $250,000 a year, nearly a trillion dollars in new revenue will enter federal coffers over the next decade. But Republicans are balking. Not only would they rather raise that money by closing unidentified tax “loopholes” (likely including charity deductions and tax write offs for health care costs), they want that figure cut back to 800 billion instead, so the rich can pocket the 200 billion dollar difference. The Republicans prefer all Americans be forced to wait two more years to qualify for Medicare so that the wealthiest 2% of Americans won’t need to pay the full Bill Clinton era tax rates on their incomes above $250,000.

Here is another way of viewing our budget choices, credit to this Reuters article:

Exclusive: U.S. sees lifetime cost of F-35 fighter at $1.45 trillion
By Andrea Shalal-Esa
WASHINGTON | Thu Mar 29, 2012 1:28am EDT
http://www.reuters.com/article/2012/03/29/us-lockheed-fighter-idUSBRE82S03L20120329

’The U.S. government now projects that the total cost to develop, buy and operate the Lockheed Martin Corp F-35 Joint Strike Fighter will be $1.45 trillion over the next 50-plus years, according to a Pentagon document obtained by Reuters.

The Pentagon's latest, staggering estimate of the lifetime cost of the F-35 -- its most expensive weapons program -- is up from about $1 trillion a year ago, and includes inflation…

The new cost estimate reflects the Pentagon's proposal to postpone orders for 179 planes for five years, a move that U.S. official say will save $15.1 billion through 2017, and should avert costly retrofits if further problems arise during testing of the new fighter, which is only about 20 percent complete.

The Pentagon still plans to buy 2,443 of the new radar-evading, supersonic warplanes, plus 14 development aircraft, in the coming decades, although Air Force Secretary Michael Donley last week warned that further technical problems or cost increases could eat away at those numbers.”

Note the timely coincidence. The Pentagon expects to save $15.1 Billion through 2017 by postponing orders for 170 of those planes. That’s what Republicans want to cut Medicare by annually.

Life is full of choices. We pay for a military in the belief that it will protect our life and liberty. We pay for health care for essentially the same reason. Our Air Force is already dominant in the world, how many F-35’s do we need when they compete in cost with Medicare?

Our neighbors to the north just faced a similar decision making process and Canada seems to have thought better of buying a fleet of F-35’s given its current price tag:

Federal government cancels F-35 fighter purchase: source
Michael Den Tandt
Published: December 6, 2012, 1:46 pm
http://o.canada.com/2012/12/06/1107-col-dentandt/

“Faced with the imminent release of an audit by accountants KPMG that will push the total projected life-cycle costs of the aircraft above $30 billion, the Harper Conservatives have decided to scrap the controversial sole-source program and go back to the drawing board, a source familiar with the decision said. This occurred after Chief of the Defence Staff Thomas Lawson, while en route overseas, was called back urgently to appear before members of the cabinet, the source said.

The decision was to go before the cabinet planning and priorities committee Friday morning but the outcome is not in doubt, the source said.”

Of course we wouldn’t be facing decisions like this today if the last Bush Administration had done what American Presidents have always done before to pay for the guns of war when major armed conflicts emerge; raise the revenue to pay for them. If Republicans don’t like forcing the wealthy to pay their fair share so that Medicare remains available at age 65 for Americans who need it, there is a ready alternative. Tell them they are just picking up their share of the cost for George W. Bush invading Iraq.