primary health and aging recently looked into the effect of the recession of older americans including social security, health care, and employment. this is an hour and a half. >> good morning. i'm senator bernie sanders from vermont, and i think we are going to be joined by some of my colleagues in a bit, but i do

want to thank all of you for being here, and especially our panelists were. this country, as i think we all know, is in the midst of the worst economic downturn since the great depression. 16% of our people are unemployed or underemployed. median family income has declined by over $3,000 in the last decade, and almost all of the new income has gone to the people what the very top, top 1%. in the midst of all of this, it is enormously important that we ask a question that has not been asked enough in my opinion, and that is what does this recession mean for older americans? how are they fair in in in a mixed of this terrible

recession? what is the employment situation for people in their 60s and? most working americans expect to be working throughout their entire lives? how many workers in their sixties have lost their jobs, have seen a decline in their income and importantly, how many older american workers who have lost their jobs are never, ever going to get another job? what does that mean to the economy, what does it mean to the standard of living of the worker both economically and psychologically if you anticipated working until the retirement age of 65 and now you are 61 and you are never going to get another job in your life and that is one of the issues that we are going to be talking about today. another very important question i don't think has been asked enough that needs answers today is how do you survive economically in these tough

times if, say you get $12,000 in social security and it is all of your income or virtually all of your income and you don't receive for the last 12 years what does that mean to you? ha furthermore, and this is an enormously important issue there is a lot of discussion, does the current formulation for social security adequately reflect the purchasing habits of senior citizens? i can tell you in vermont i hear over and over again from senior citizens i don't quite understand what how there has been no inflation when my prescription drug costs are soaring, and we don't get eighth cola. is the current formulation regarding cola adequate and that becomes important because i think tomorrow or in the near future we are going to be hearing about what the seniors

will be receiving. is the current formulation adequate or do we need a new formulation that better reflects the purchasing needs of seniors? according to information we will be receiving today, and this is really a rather stunning, the bottom 20 per cent of senior citizens in the country live on incomes of less than $12,080 a year. let me repeat that. the bottom 20% of seniors in this country, millions of people live on income of less than $12,080 a year. in fact the average income for a senior in the bottom 20 per cent is about $7,500, and i hope that our distinguished panelists will explain to me and the american people how any person in this country, let alone a senior with specific needs often regarding health care who can survive in

the year 2011 on $7,500 a year. now importantly, and let's be very frank about this as many americans know there is a major effort on the part in some in congress especially in a the republican-led house of representatives to make major cuts in social security, medicare, medicaid, the liheap assistance program and nutrition program. now if these cuts were to take place, what impact would they have on seniors will be? my office learned yesterday that the ranking member would not be here this morning and i am disappointed by that and i hope that perhaps he or some other republicans will in fact come to this hearing this morning to talk about these important issues because i will tell you, it is very easy to get up on the floor of the senate and announce how to are in favor of cutting

social security, cutting medicare, cutting medicaid, cutting the heating assistance but it may be a little bit harder to learn what the impact will mean a real human beings and what kind of suffering will take place but how many people perhaps will dhaka as a result of the cuts. so this is an important hearing and i hope that we can -- i look very much forward to hearing the testimony from the gao and our other distinguished panelists. with that, let me introduce senator franken for opening remarks. thank you, senator franken. >> thank you mr. chairman for holding this extremely important hearing. i have no opening remarks of a fair and to say as we get to feed reauthorization, the older americans act, my staff and minnesota there's a number of roundtable discussions and i

myself have participated in that and have done a field hearing when i was with the special committee on aging and i've done just a whole bunch of events at senior centers and have had this discussion and i think that everything senator sanders spoke to is very important and i did have an opening statement. what do you know. i just would love to hear the testimony today. i do think that cutting social security, social security has had nothing to do with our deficit. if anything we have been taking from the social security surplus and accusing it, not lock box and yet. i look forward to the testimony today what and to the discussion of what we can do to end this

recession or this economic slowdown to make sure that seniors live a dignified what life and have a dignified retirement and also the seniors were those who are approaching one the seniorhood as i am we would hear from some of the testimony where folks are out of work to and can't get jobs for a record amount of time now and what recourse they have commesso i want to thank the witnesses said and the witness in the second panel. >> thank you. thank you for all the new dump for seniors. we are going to begin with bob

bovbjerg the managing director for education work force and income security issues in the u.s. government accountability office. previously she was the director for the retirement income security and in that capacity managed studies on social security and pension policy and management. before joining the gao she led the city wide analysis unit of the district of columbia budget office and we thank you very much for being with us this morning. >> thank you, mr. chairman. senator franken, think you for inviting us here to discuss the effect of the recent recession on older adults. while the recession officially ended in june, 2009, the economy has experienced a weak recovery with unemployment still above 9%. older adults, particularly those close to or in retirement may not have the same opportunity as younger adults to recover from the recession and still a sure they would have sufficient

savings for retirement. my testimony to the would present the work for the subcommittee on older americans wellbeing. our report which is being released today presents data from the various federal sources concerning the financial status of older adults. i'm accompanied by michael collins our assistant director for this project. things were not especially great for older adults in 2007 before the recession. we previously reported that older americans were heavily reliant on social security benefits with about one-fifth of the beneficiaries of a 65 receding more than 80% of their income from the source. this reflects relatively small amounts of retirement savings for many older people. almost half of american workers have no defined benefit or defined contribution pension to supplement social security even those who do have the pension would still not have enough to live comfortably in the retirement. in 2007 before the great recession began, the median

level of the financial assets for households approaching or entering retirement was only around $72,000. this may sound like a lot of money but it has to last a retiree for decades using basic rules of thumb for the withdrawal, this amount would provide for about a 5% replacement rate for those at median incomes. even with social security, this isn't enough to support a middle class standard of living. older americans were not especially flash prior to the recession and things have not gotten better. other employment rights of the bald from 3% to 7% so workers age 55 and older. these rates are not as high as for other age groups likely because older workers have seniority and are less likely to lose their jobs than their younger colleagues. still, once an older worker does lose their job they are less likely than a younger worker of a similar skill to find another. indeed the median duration of unemployment for the workers rose sharply between 2007 and

2010, more than trouble for the workers 65 and older and increasing from 11 weeks to 31 weeks for the worker's age 55 to 64. during this period, even among those employed, the proportion of the older part time workers who indicated they would prefer full-time work nearly doubled. the recession also left older adults with difficult choices regarding retirement savings. neither stocks nor realistic have recovered from the low point during the recession and continued low interest rates mean that savings provide little if any interest income after inflation. in these circumstances those approaching retirement find the man not be able to retire at all until such time the markets recover. those already in retirement and managing their own assets face reduced circumstances without time to adjust by saving more. indeed in the aarp survey 50% of older people who reported having difficulty meeting ends meet

delayed getting medical or dental care for safe taking medication entirely. those with defined benefit plans are protected from the market swings but increasingly older adults are managing their own savings by a 401k plan and are thus vulnerable to the market volatility. in the only bright spot, and adults age 65 and older were somewhat protected during this period likely thanks to social security. although household income fell for adults aged 55 to 64, and those 65 and older experience an increase in household income and similarly while the poverty rate increase for those 65 to 54 the decrease for those 65 and older all the changes when the medical costs are factored in. it seems social security is an important protection as it is intended to be to those eligible for those benefits. in conclusion, the great recession had a profound impact on older adults. many have lost employment and

wealth and have little time relative to their younger counterparts to make the difference before they retire. and some will not retire voluntarily but may even lose their job from a lay off or from fiscal disability. fortunately, social security has largely protected of the retirees from poverty but it is intended to be foundation will benefit and not the sole source of income. americans increased vulnerability to the fluctuations and complexities of the financial markets for their retirement security means that they're increasingly on protected from a retirement and reduced circumstances. helping projected a rapidly growing population of older people offers a special challenge as we seek economic recovery for all americans and that concludes my statement. i hope there were written statement will be submitted for the record and i will await your questions. >> thank you. now we will hear from senator kec who wanted to make an opening statement. >> thank you come senator sanders. i want to thank you for

convening this hearing on this important topic and i won't be here for all of the testimony but i am especially grateful. i represent a state that has um, depending on what the latest number is probably the third highest number of individuals over the age of 65, so we have a i know what least one, over 1.9 million over the age 65 and of course big numbers just below 65, and i think that with this hearing does is remind us not only of the gravity of the impact of the recession, but it also reminds us how urgent the work is that we are doing right now to put in place job creation strategies. we are finally at a point where actually debating and voting on a series of job creation and ideas in this report that the gao has done and other testimony from the witnesses should give added urgency to the work that we are doing because we have to do everything we can to prevent

even further damage to people's lives in their communities. so it's been terrific time for a lot of families and probably even more so although workers and their families, so we are grateful for the scholarship and the work that goes into this report in a grateful for the testimony of our witnesses. thank you very much. >> thank you, cementer casey. let me begin ms. bovbjerg with a few questions. you mentioned in your report that workers 65 years of age and older salles the length of unemployment triple, and he mentioned that workers 55 to 64 solve the unemployment almost triple. you also mentioned that one-third of workers 65 or older

are and low-wage jobs. in human terms, what does it mean if somebody is 60 fifer 66 today for 62 and lose their jobs in your judgment and i know there are obviously exceptions, but on many of those workers over again and what happens to their lifestyle if they are not -- if that income is not coming into their family. >> we have previously reported on the situation for the older workers that they are less likely to lose their jobs than younger workers, but once they do it is very hard for them to get another. they may have skill issues with shifting to another job, health issues. they also frankly have employ your issues. employers will always look to hire older workers. so it is very difficult for

older people once unemployed to go back and get a job, but if they are lucky enough to be at least age 62, they can claim social security benefits. unfortunately to claim benefits at age 62 you're going to get 25% less on a monthly basis than if you wait for the full retirement age of what is it, now 66. but it's still available to you, and we have seen increased claiming as a consequence of the recession. >> so very specifically, what you are saying is that many more seniors are now taking social security at 62 at 25% fewer benefits than a waiting until 66? >> that's correct. >> could you elaborate on the finding about the important role of social security and medicare

and older americans act programs have on protecting the financial stability of the nation's senior squawks you talk about not declining when they reach social security and also what would happen if social security programs were cut? what happens is the eligibility age for medicare goes from 65 to 67, what would your best guess be to the implications of that? >> what we talk about social security because social security is there to assure the a baseline income for older people and has done its job. it's reduced poverty rates for older people fairly steadily since its inception. clearly if people don't have social security to go to you would see a different pattern and the poverty level at age 65 and over. but something you have to worry about in the social security and

you be included to this earlier with the cost of living increases is older women in social security have higher poverty rates than the average that we reported for every one of 65 and so a concern in anything that might have been with the cola is what would happen with of those older women who in their eighties may find themselves in poverty. now i cannot comment on the increase in the age for medicare. that is completely outside of my area of expertise, but i can say that of the things that you hear from older people and the information we have on the medical cost suggest those made quite a difference to what they perceive they are able to spend on other things to their disposable income. okay. senator franken? >> thank you again, mr. chairman, for calling this hearing. ms. bovbjerg, as i mentioned in

my opening statement, the older americans act is coming up for reauthorization, and it really provides a number of services that allow seniors to remain independent in a way that actually saves federal government money because these folks and up being able to stay in their homes instead of much more expensive nursing home care and some of the services that are provided are home delivered meals or meals and congregant settings, job-training which will live here -- ed hear from the next panel, transportation, caregivers etc. based on the findings of the gao study would you say the need for these types of programs will increase or decrease in the

coming years as our aging population reaches an all-time high? >> the need will increase simply because the demographics of nothing else. the baby boomers are entering their retirement years and as they get older there will be an increased demand for these services. we did do some work for the senate special committee on aging on this topic on the older americans act, and discovered that the states and communities that are providing these services are just overwhelmed, and will only get worse. the concern that we had is there isn't much sharing of, you know, ways to address the surfaces, there isn't a lot of targeting of services, so while many people may be receiving services probably the people who need it the most are not always getting those kind of services and we think that there is a federal role to help these communities,

what just based on the demographics, there will be greatly increasing demand. >> and given that we are talking about the effect of the recession on older americans, and given that you are seeing higher unemployment as you are across all sectors and with seniors once jobs are lost, the expansion of the time that it takes to get another job, so with the long run and play it and the lower wages as we are saying and to create the savings there is an increase in the reliance on social security, is there not why? and i think it's important, really especially important at this time to maintain social

security benefits not only at their level but to use the cola to increase them; would you agree with that? >> senator, for at least ten years the gao has been very concerned about social security because of the future, the financial instability of the program, but the importance of it to the american people, and it is clearly something that is a decision for congress and we cannot make any recommendations, but it is something that needs to be thought through very, very carefully precisely because of your point that people are relying and becoming more so on social security. >> the title of today's hearing is where to go from here. given your research, what would your advice to older americans who have been particularly hard hit by the recession's what are the strategies that they can play now to build their retirement savings?

>> i wish i knew. if you are already retired, and you are reliant on a 401k or with ira or the financial markets, you are probably really reducing your spending on other things. you are probably making a significant change to the standard of living. >> and there are choices made sometimes that are not good choices between the medicine and food. i mean, that's something that we should just recognize is happening, right? >> people are making choices come and that aarp survey suggested that the first thing to go is medical care and medicine, even those over 65 would be eligible for medicare. >> and member of the senior meetings that i told, it's very

common for people to come to social security for one reason or another their savings have been depleted and they require certain medicine and they have to make choices. one of the things -- and i will get into this in the next panel is that the affordable care act is doing -- is closing of a doughnut hole, which i think is a very important thing that we continue to do and i think a repeal of the affordable care racked just in that alone would be disastrous. thank you for your good work. >> thank you, senator. before we bring of the second panel i might just this bovbjerg , the average income of a senior living in the bottom 20% of the quintile is $7,500

somebody come in your judgment, survive in 2011 with health care needs, prescription drug feeds come how do you survive on the $7,500 do you think? >> i think that they are probably tremendously reliant on the programs in the older americans act for example for meals and transportation. they are very reliant on medicare. they are probably getting food assistance to the program. they would be tremendously reliant on support like this. >> would it be fair to say if the house programs were cut it would be devastating for people who are just right now living on the edge? >> would be very difficult for them to adjust. i think that is our point in our work as we look at things happening with younger adults but with older adults they have

really limited ability to adjust >> thank you very much. we will hear from our second panel now. >> thank you. >> [inaudible conversations]

>> we have a great panel here. we have some of the leading experts from the country on senior issues coming and we are going to be delving into what happening economically, financially for seniors and we are very pleased and i want to thank all of you for being with us this morning. we are going to begin with dr. eric kingston. dr. kingston is a professor of social work and research associate in the maxwell schools sense of public policy at syracuse university. is also a co-director of social security works and a founding board member of the national academy of social insurance, so we are very pleased that dr. kingston is with us today. doctor? >> senator, thank you. and senator franken as well and other members of the committee for holding this hearing and for

focusing on human beings in particular, because ultimately these policies are about the lives of americans coming and we lose that too often to think you very much. as you mentioned my name is eric kingston. i am a professor of syracuse university and i also serve as a staff to put to presidential commission on social security including the greenspan commission in 1982. most of my work is on the politics and economics and now co-director of the social security work and the co-chair of the strength and social security campaign which both members present today to summarize main points and enter into the written testimony to the record if i may there's nothing to absolutely nothing that provides the a shorty of protection, the widespread protection of social security.

nothing is going to replace it in the next 50 years, 60 years. as as that chart shows and i will be happy to talk about that in the q&a the symbol most important source of income for the vast majority of older people, for older persons with less than $31,000, i believe roughly. it provides 75% of the aggregate income going into their households. critical it's not going to be replaced. former presidents, former converse were wise to establish the cost of living adjustment, and it is my hope to maintain the cost of living adjustment and it's my hope that in the future members of congress will also be doing the same and try to maintain the standard of the cost of living is just inaccurately reflects the cost of living changes for older people, people with disabilities

and others. the weight of evidence as has been mentioned the weight of evidence concerning the current cost of living adjustment mechanism is that it understates the impact of inflation on older americans. it falls short of assuring that older americans maintain their purchasing power no matter how long they live because it does not, premier li doesn't give a sufficient weight to the impact of health care cost increases on in these populations. the alternative cpi or also called a superlative cpi it is being proposed by some members of the super committee and has has been discussed in the deficit reduction discussions, that alternative simply does not pass the smell test. it would only make the situation that we have today worse. we are not adequately in my

opinion and in the opinion of others adjusting for inflation. today the trained cpi if implemented will further reduce benefits. a woman that retires at age 65 looking to 75 would get a benefit of about $70 less in real dollars ten years later at age 85 about 950 or so dollars less than at age 95 if she lives so long you would be roughly $1,400 less than it would have been if the cpi is put into effect. the consumer price index for the elderly which the older americans act asked to be developed by the bureau of labor statistics cpi for americans over age 62 is a far superior measure of inflation, but it is less than perfect but it certainly is better than what we have in place today.

in terms of the impact of inflation on households and persons with disabilities, the public would be very well served if initially the cpi were put into effect if congress requested further development and pricing. we all have an interest in the accurate cpi. democrats, republicans, all have an interest in that. the problem and is today we do not have an accurate cpi. i think if we get a more accurate cpi it would in fact increase, not increase but adjust benefits. we don't want a national policy that says the longer you live the less purchasing power your social security has. that's what we will have if we implement the cpi katrina cpi, and it is also arguably what we still have today because the current cpi doesn't fully adjust for it. the implications by the way of the trained cpi on the program or even more built deleterious

because it would cut benefits in the beginning before people get benefits coming and would also be cutting their benefits after that. implemented in 2011 or in 2021, the trained cpi would violate promises that members of congress and the president has made that there would be no changes to the social security benefits affecting people 55 and over. it's bad policy, it's also terrible public relations. this is a social security is a promise. it's a promise americans expect their government to keep and if this is true across all political spectrums across the political spectrum it's true for the tea party households and union households. americans are not easily deceived and if congress chooses to implement the cpi ultimately they will understand in terms of the social security over ten years would take $121 billion directly of the pockets of social security beneficiaries.

they will understand that the government has let them down so it's very important that you are casting white today on this issue and it's very appreciated that you've put this panel together and we are delighted to assist in any way possible. >> our second witness is gail ruggles, a vermont resident who lives in a very rural part of northeastern vermont and she's going to be talking about some of the struggles that she has had over the years which i think reflect the struggles of million people her age have had an also, she's going to talk about the benefits in the that older americans act program has had in the turning her life around. so, ms. ruggles, thanks very much for being with us. >> thank you.

thank you for inviting me to testify. it's an important issue to be too. my name is gail ruggles and by 61-years-old. i am currently the administrative assistant for the media technology which is a growing research and development firm in the northeast vermont. for the first time in many years i beginning to feel economically self-sufficient. three years ago, not so pretty. my life was definitely a different story. i never planned to be broke. i never planned to be out of work. i've been in place since i was 16-years-old and lower level jobs. when i turned 50 on was divorced, raising assistance a seventh grader on my own and i decided i would like to be a better role model for them and to do something better with my own life to rely met with a financial a representative of the state college and went back to school. it took me awhile ago but i graduated with a bachelor's degree in liberal studies. i was 56-years-old and i was ready to get back into the working world full time. but something weird happened in those five years. somewhere along the line people

start looking at me and seeing this thing called at your age. it has a dirty feeling like i was used up, like i was a has been. i was still me. i was worried going back to school hadn't been such a good idea to believe is deeper in debt because even the like to participate in the work study i maxed out my student loans to help pay my student bills. i searched papers for jobs when i saw something i consider answering i started to think yeah but who would want me at my age? i lost sleep and turn the thermostat down when we were cold. we eight cheaper food. i told the kids -- i gained weight from poor eating. i knew i looked bad. that made me feel bad. the worst thing was i felt like i was a failure in my kids' lives. within six months of graduating and was working five part-time jobs. i did substitute teaching whenever i was called, i picked up books and sold them on the internet and i had all the parts

for a friend on ebay, i did free-lance writing and working in the tax season. i didn't know what else i could do. the slump in the economy hurt me like so many others. my car was on its left leg, i was getting behind on my mortgage and for and understanding the tribes of related for closure. it with the springtime and the electric company could should be off for late payment. once i went to the local food pantry and a leedy from my talent was checking off names and i was so mortified i took my bag of groceries, got in my car and cried all the way home and never went back. at this time i was 59 and a half-years-old and i read and reread my social security earnings statement like it was a holy grail. all i wanted to do was make it to 62, pick up that chunk of social security and combine it with all of my five other jobs and maybe make ends meet. i was afraid of what would happen to me if i couldn't support -- what would happen to my kids if i couldn't support

them. all i wanted to do was get them through school and i didn't care what happened. i needed help but i didn't have any idea where to get it. the turning point came in january 2009. i went to eight thrift store to get a winter coat and i told the group of registered i was looking for work. i made a joke about being someone at my age. she said how old are you? she handed me a brochure for the assistance and training development. the program sounded too vague good to be true but i called anyway. i've got to tell you i don't like public aid offices or having to defend my life failures in exchange for handouts but the people of the vermont associates were different. they really cared. they wanted me to make a better life for myself. they took the time to explain to me the duality of the senior community service employment program. they placed senior workers in paid training positions in the 501c3 organizations.

personally i dhaka was brilliant. community people helping each other. i was assigned to train at the office of the hospital at the nonprofit group. this was a 20-year-old organization run entirely by volunteers. i set up their files, but their finances in order. i started to catalog their library holdings and over the next few months the start to call me the secretary. i looked around and i thought i am pretty good at this. i told the vermont as a seat supervisor i would like to learn to write grants to help fund the library. it was kind of weird but we worked together to make it happen and i took a grand workshop in boston. it was the key addition to my resume. as a part of this program the vermont associates hold monthly training and employment meetings and the specialists come to teach us to reinvent our resume for today's employers a new skill. they taught us interviewing skills and how to create a portfolio. at one meeting we were asked to make a list of skills we have

and i found i can do a lot of things from selling on the button to cleaning of a septic tank. i had a lot of skills that could be used in a real job situations in early november i was helping a friend you with a tax issue that he had soon incurred and i met him once a week where he worked. his boss let us use his office while he was out to lunch. i saw stacks of mail and files and folders and peter everywhere and i thought this guy could use me. my training and was confident i knew how to take care of an office and after all i had been doing it for eight months. so i gathered my courage and asked for an interview with the odor. he didn't know he needed extra help but he wasn't convinced he needed to hire a new staff employees. i had a in ploy your incentive program that stands for on-the-job experience. it turns out a combination of skills lagat during my training and the incentives to give early and my job. of course it was up to me to keep it but that was december of

2009, it is october, 2011. i got a raise in jim ury, have insurance benefits, have a vacation time and i am investing in a 401k. being a participant in the firm of associates gave me things welfare programs never could. gave the occupational skills and special training to octane real lasting employment. it gave me confidence in liabilities. ultimately gave me the ability to becomes economically self-sufficient. i'm not even thinking about collecting social security at 62 because i don't have to read and actually building a stronger retirement. vermont helped me turn my life around. it's a program that works. thank you. >> thank you very much. our third witness is dr. ied hartmann president of the washington-based institute for the women's washington research which she founded in 1987. dr. hartmann is also a research professor of the george washington university and we thank her very much for being with us today. dr. hartmann? >> good morning mr. chairman. it's a pleasure to be here. >> talk a little closer into the

microphone, please. >> okay. good morning mr. chairman. it's a pleasure to be here and i think you for the opportunity to testify. in addition, as you sit to the president and the institute of policy research i'm a labor economist with a ph.d. from yale university. i want to share with you the findings from some recent research and i would like to acknowledge the support of the ford foundation, the rockefeller foundation and the pc foundation supporting our work. to put it briefly, our studies show seniors have been hit hard by this recession. their income from assets and tensions have fallen and they are trying to make up for that by working more. fortunately social security is there for them and it's making of a larger share of their income. at the same time that other sources of income have declined. among all the age groups only the elderly have not seen an increase in poverty during the recession, and its aftermath and this income stability is almost certainly the result of the university of the of the social

security and it's important protective features such as the lifetime guarantee and its cost of living adjustments. as a result of the recession more and more americans of all ages are worried about having the funds for retirement and few were feel fear saving enough for the retirement. many are borrowing from the fund or withdrawing money from savings to deal with the slow recovery from the recession. i am skidding through my testimony and i will be summarizing it. the severe loss in assets as a result of the recession should increase policy makers' concerns those who are 45 to 59-years-old or beginning to enter retirement now will continue to do so the next 20 years will need social security benefits even more than the current generation of retirees. these older workers are also experiencing a disproportionate share of long-term unemployment and therefore programs that create jobs such as the american jobs act or especially important to them. and as we have just heard from the poignant testimony of

mrs. ruggles, the assistance with the job training and finding employment is also critically important houses continued long term employment insurance benefits. i would like to illustrate some of the major points of our research. first, older americans are relying more on social security. first in the full testimony with all the figures, the figures to .5 show that women's income from all sources is lower than men's income and women therefore rely on social security more than men do. this is figure six in the testimony and shows that for all women 65 and older the share of rely on social security 40% or more of their income has grown four percentage points since 1999 to 50%. in other words half of all women 65 and over are getting 80% or more of their income from social security. the increase has been even greater in the recession and recovery period since 1999 the

share of men 65 and older who are relying on social security for 80% or more of their income has grown by six percentage points from 29% to 35%. so that is one-third of, more than one-third of men who are now relying on social security for more than 80% of their income. the purple from 1999 to 2000 - course included the recessions that 2001 recession and the gao test of fire mentioned that at the start of the second recession older people were not in a great position in terms of their assets because most americans never really recovered from the 2001 recession before this much bigger recession hit in 2007. so, we have another graf in the testimony that shows that the older old rely more on the social security than the number old and also that the minorities rely on social security for larger shares of their income than do whites.

second, i would like to point out in the next graph something that the gao also mentioned that social security has been remblalso see that the age group characterized for them to poverty went up for those 60 to 64, that's the blue line from their poverty increased during the recession, and especially for those 55 to 59. the red line. their poverty rate steadily increased during the four years of the recession and recovery, and this reflects the fact they are still largely in the labour force and the labour force is simply not providing the jobs. again, the rising poverty rates reflect the difficulties that older workers are having on the labour market and it shows how important it is to create jobs and provide job training for this age group. third, i want to share planning from a survey that we did of 2700 americans in the next chart and just looking at how people believe they will or will not

have adequate savings to maintain their standard of living in retirement. we ask them to compare their view of that now to what they held before the recession and the drops in the confidence that the savings will be enough to maintain their standard of living are amusing for example women ages 45 to 59 the blue line showing a severe drop 52% before the recession felt their savings would be adequate now only 25% do. once again women have less confidence than men and a greater drop in confidence as a result of this recession. once again, this age group is an age group that has had severe risk and therefore i think i would just conclude with the notion that these programs such as described able to take it vantage of are extremely important to continue to read if

we are going to prevent poverty from increasing as this generation retires we have to do something now to strengthen their employment opportunities and ability to save and build for the retirement. thank you very much. >> thank you very much, dr. hartmann. our final witness is dr. sandra najaf and senior vice president for economic security of the national council on aging where she oversees programs geared towards improving the economic well-being of the 5 million vulnerable older americans -- older adults by 2020. prior to joining nxcoa she served as the president of the richmond children's foundation. dr. nathan, thanks for being with us. >> thank you, chairman sanders. my fellow witnesses and gas, on behalf of the national council on aging i greatly appreciate the opportunity to testify today ncoa is a nonprofit service advocacy organization headquartered here in

washington, d.c.. ncoa's mission is to improve the health and economic security of millions of older adults, especially those who are vulnerable and disadvantaged. ncoa is a national voice for older americans in the community organization that serves them and working with nonprofits, businesses and government ncoa develop creative solutions to help seniors find jobs and benefits come improve their health, live independently and remain active in their community throughout my career i've examined the issue that we are discussing here today from a public, private and nonprofit perspective. but my expertise is not the focus of my remarks. today i am an ambassador on behalf of the millions of older adults who struggle every day just to pay for food, for

medicine, utilities and a place to live. my remarks will give a voice to the one and three over 13 million older adults in this country who are living on the edge, just one health incident, bourn car repair, one must rent payment, one roof leak or laid-off away from poverty. people like frank from st. john's vermont who shares im one paycheck away from foreclosure and bankruptcy. struggling to make ends meet, i went back to college at the age of 59. i graduated at the age of 61 and continue training in my career field learning valuable skills but can't seem to get ahead simply because i am so strapped with debt. from warsaw kentucky, and a

72-year-old female getting by on $650 a month in social security to realign living in a senior citizen subsidized apartment complex in rural kentucky. i need my medical benefits and food stamps so that i can make ends meet every month. i am someone's mother and grandmother. struggling to make ends meet, many low and moderate older adults are either rethinking her retirement plans and extending work or returning to the work force often their only option. as marcus and eugene puts it, mauney 83-year-old mother is so pressed economically she has had to go back to work in a part-time job. with little cash many older adults in this country today are balancing their budgets on

credit, forgoing the necessary medical care and letting the bills mount. the past year ncoa launched a national video advocacy program called one of way which gives voice to younger adults struggling financially. working with over 14 states and local organizations including many strong partners in states like vermont, kentucky, iowa, maryland, north carolina and pennsylvania, one of way captors stories of seniors to raise awareness and an advocate for policy change. the one away campaign shine the spotlight on the fact that the golden years are not sold them for many of the adults. despite their struggles, they regularly suffer in silence and the courageous few who do reach out for help often find a system that is ill-equipped to respond to their needs.

of course family caregivers play an essential role in helping adults, but the needs of older adults are facing today are often too complex for families and friends to have the expertise to assist them. with the retirement of over 78 million beavers ahead of us, ncoa believes depending reauthorization of the older americans act provides a key opportunity to initiate important changes. we have three specific recommendations for the older americans act this morning and i will highlight them very briefly. first, the older american free authorization must improve the coordination of existing resources and in power older adults to access and navigate the range of public and private support the are critical to increasing their economic security with a growth of the older population and other

economic struggles the aging men were organization across the country are experiencing escalated demand for the core services should she become such as job training, health with applying benefits and subsidized meals. we feel strongly that the older americans act reauthorization should remove barriers and strengthen opportunities for the network to better coordinate existing federal, state, local and private resources through a comprehensive approach to elder economic security. second, the older americans act reauthorization showed define economic security and its explicitly stated as an objective of the older americans act. it should evaluate and replicate comprehensive person senator approaches to economic casework and assistance. although the economic security

has long been an applied goal of the older americans act, the recent economic downturn and its negative impact on the housing, employment and financial markets have made it an even more pressing matter for older adults. the aging network must define and adopt a measurable goals as a benchmark. the term economic security should mean access to assets, incoming and community-based support necessary to provide for basic needs. at a minimum, the measure must be geographically based, taken into account light of circumstances and ensure that an individual can afford housing, health, nutrition, transportation, basic household needs, financial-services, and if necessary, long-term care. these recommendations are based on the elder economic security

standard index or older index created by the opportunities for women and the gerontology institute. our first recommendation is that the older americans act reauthorization must modernize, expand and protect training and employment assistance for the mature workers including the senior community service employment program and the previous witness talked about the importance of the program, and we feel during strongly that it should be coming you know, it should be expanded to meet the needs of the aging work force. finally, we cannot forget to strengthen the foundational old social security, medicare and medicaid plays and ensuring the economic security. we have a specific recommenhave included in our white papers and i would be happy to elaborate on

those. .. can ask you a number of questions and get into some depth on these issues. one area i want to focus on is in fact the social security coal la, and i want to start with

dr. kingson on that. doctor, when i'm back in vermont, many seniors come up to me, or they telephone our office and they say, we don't understand how the government concludes there has been no inflation in the last two years, that we're not getting any coe los angeles we haven't gotten any cola in the last two years, when we are paying more for healthcare costs, we're paying more for prescription drugs, more money is coming out of our pockets. are those seniors in vermont and around the country wrong or are their perceptions correct, and if you are a senior in america today, you are paying mow out of pocket than you used to? >> those perceptions are correct. the cola was not given, as you know, senator, in the last two years as a matter of law. it wasn't a decision by the president or congress. it was a function of a spike in

the cost of living around 2008 when the oil crisis spiked. it resulted in a very large cola. the 5.8%. and since then prices went down. they did not -- a cola was not given, and for many seniors that's very problematic, and the reality of people on the ground is, yes, prices are increasing. they know their healthcare costs are going up, out of pocket cost increasing, fuel costs have gone up, so, correct, yes. >> now, as you mentioned in your testimony, some folks here in congress, who are saying, in fact, that the current formulation of colas is too generallous. >> yes. >> so generous it overstates what seniors should be getting, and that we have to move in a new direction to a so-called

chained cpi, which, as you indicated in your testimony, would mean significantly lower cola's for seniors in years to come. can you comment on that? >> yes. evidently some members of congress, some members of the press, seem to believe that giving seniors two colas -- two years of no colas is giving them too much, and they see a need for reducing cost of living adjustments through this technical change. i can go into the tech nick cat aspects is, but the bottom line is there's a fancy measure that would put in which would change the way we measure the consumer price index. nobody can say, i believe, with a straight face, that's being done to really improve the accuracy of the cola for seniors and people with disabilities. at it being done to cut social

security. pure and simple. $121 billion would come out of the pockets of seniors. another 24 billion out of the pockets of veterans, because veterans benefits are attached. another 9 bill out of others, and also increase general revenue slightly but it would place the burden mostly on middle income and lower income by the changes that would take place in the tax. >> let me just go right down the line from miss ruggles, to dr. hartmann and dr. nathan. what do you think the reduction in social security benefits would mean to seniors in this country. monday ruggles? >> the seniors i deal with, and especially the ones i talk to at vermont training associates, they are all terrified. plain and simple. terrified to expect to live on the dollars and cents that was

in their earning statement, which unfortunately we no longer get. but their standard of living as they were working adults, and all of them -- i was at these meetings with, they were working adults. they weren't bums. they were hard-working people that wanted to keep working. they knew they cooperate survive on social security. neither can i. >> dr. hartmann. >> in the survey we took, we asked our retirees and near retirees of the four challenges they would face. one would be not having enough savings, going to a nursing home, not being able to pay for health care. but the single thing they were the most afraid of was the possibility that social security benefits would be cut. i think that's in our full report which i can send you. i think that it is, as you can see from the poverty data and from the data on how many people rely on it for such a large part

of their income, it's simply their anger, and cutting that anger would be devastating. >> i concur with the other panelists. '7% of older adults, 65 and older, rely on social security. and so cuts to social security benefits would just be devastating. their out of pocket medical costs are increasing. and as it is now, seniors are just in dire straits. so, the impact would be tremendously devastating. >> thanks. >> senator franken. >> thank you, mr. chairman. this question is for pretty much anyone on the panel. because of the affordable care act, seniors who purchased brand name drugs now this year are receiving 50% discount on those drugs.

this is for saving seniors 3 359 million in drug costs this year. since mad medicine is such a how much expense for seniors, this provision in the affordable care act is critical to seniors' economic security, and as the affordable care act continues to be implemented by 2020. it will be virtually be eliminated. what do you think the effect on seniors would be if healthcare reform were repealed and serieses hat to go back to paying the full cost of their prescription drugs? >> in the donor home. >> problematic. very problematic. because it would be an increase -- it's interesting. even the 23% that was mentioned of seniors who are 20% are in reasonable situations, many of them as they aim -- age are not,

and so that closing of the doughnut hole would in fact pull money out of their pockets -- >> the closing -- >> the unclosing, sorry. and i can't resist this, senator franken. you have a marvelous chapter in your book on social security that everyone should have to read. it is really assigned to the students and it's insightful and very correct. >> do you assign them to buy the book? >> no, i hand it out. >> we'll talk later. >> i'd just like to follow up on this in terms of, mr. kingson, as we saw on the chart there, or

maybe a chart in one of the testimonies -- i apologize. i had to leave. i had an energy committee going on at the same time. as you get older, you get more and more reliant on social security. is that because your savings run out, you -- if you have income, because you were working earlier in your retirement, that goes away as you get older, your medical costs tend to go up. so, this change in the cola to a chained cola, would be -- would sort of exacerbate that problem, and am i correct -- there we see the chart again. it seems to me that the cola becomes more and more significant as you get older, and as you rely more and more upon your social security.

>> that's correct, sir. and getting the cola right becomes more important, too. for just those reasons. as people age, those who are able to work, often times leave work and have higher healthcare costs, offer, as you said, and we see transitions by losses of spouses, those who are married, and we also see that the assets of people are not protected against inflation or against fluctuations in interest rates. the one mechanism, the one thing we have that's largely protected against loss of -- against inflation is social security. it's so critical to keep that. and it was so correct for the congress back in 1972 to implement it and say, national policy should be that no matter how long someone lives, the social security benefit maintains its purchasing power. >> because obviously the older

you get, in a way the harder things get in the sense of more medical costs, loss of income, the drawdown of your assets. many people who are now living well into their 90s, or into their 100s, probably didn't expect to live that long. miss ruggles, thank you for being here today and for your story. in your testimony you say that when you went to your appointment at vermont associates, the staff made you feel comfortable. >> they were amazing. they really were. it was a very small office. it was barely furnished. usually when yoga to a public aid office you're told to be there at 11:00, and there's 20 other people there, and five or

six hours late are you might be seen or not. but my appointment was for me only. they were very efficient in what they did, placed me where the knew i would get the skills to match what i would like to do, and it was really good. they were very wonderful. >> they explained at the -- that it wasn't a handout. it was a hand up. and you are aware that scsep is part of the law called the older americans act. >> i am. >> and it's similar programs that give seniors so-called hand up. so, i just can't underscore the importance of the reauthorization of the older americans act, and is there anything that anyone here would like to say about the older americans act in terms of what

we need to do in the reauthorization? >> i have a simple comment, and that is in my observations, an ounce of prevention is worth a pound of cure. if you can make a senior citizen self-sufficient, they're not going to be on the dole. i was a poster child for their 108 program. i really was. i was one away from having mylights being shut off, from losing my house. the fact is, if all those things happened, if i had dropped off the cliff, i would have been totally deppent on the system for food stamps, shelter, whatever. my kids would have with me on my coat tails, i would have been raising another generation of welfare kids. instead i'm showing them wham you can do and i'm proud to say one graduated college and the other one is on his way.

>> mr. chairman, thank you. >> thank you very much. >> let me start with dr. nathan, and we'll head west, i guess. we talked a little bit about colas and cpi but the most basic question, and some of you touch upon it -- is the issue of economic security for seniors and what that means. when i read that on average people in the bottom 20% of are living on $7,500 a year that is almost beyond comprehension. i just don't know how people do that. i want you to say a word about that, how does somebody survive on that kind of minimal income? and second of all, more broad comment -- and i know it varies depending on the location of the country that you're living.

in vermont, minnesota, it's colder. people spend a lot of money on heat. in other parts of the country that may not be so. food prices vary. dr. may than, talk a little bit about the issue of economic security and what is happening to people who are living on seven or eight thousand dollars a year. >> well, senator sanders, chairman sanders, anyone living on $7,000 or less a year, as i stated previously, is living in a state of economic deprivation. no one can provide for their basic needs with less than -- achieve a certain level of economic security on that income. part of the problem is, as i stated earlier, the way that we have such an outmoded measure for poverty. the federal poverty level in 2011 for a single person was a

little over $10,000 a year. and that is extremely low. so, we're talking about income that is $3,000 less than that. so from the standpoint of economic security, it would be impossible for someone to achieve that on that income, and when you look at the geographic, you know, differences, i mean, $7,000 a year in san francisco is -- it's even worse. so, -- >> thank you very much. we're talking about millions of people living on really minimal income. the most vulnerable people in our country who have healthcare needs, can't get around. how do they survive? what are we talking about when we talk about economic security? >> i think as for very low income people, i would hope they have found subsidized elder housing.

what many older people do with low incomes is live with family members. public housing is extremely important at such low incomes. so, any programs that can increase housing assistance for elders are very, very important. about 8% of our seniors are on food stamps. so they are receiving help through food stamps. as you know they may also be receiving help through ssi if their so-security was inadequate. so we do fortunately have programs to assist people, and not all of these assistance programs are shown in the income data. those poverty data is outmoded, but among the poorest elders are those who live alone and who are the longest lived, which is many women. at older ages, most men are actually still married, but at older ages most women are not married. they're not able to remarry. there are fewer men around and they're living alone, and those

are among the most deprived, are older women. >> dr. hartmann, many of the lowest seniors are dependent on programs, whether it's federal housing or food stamps. let me ask you a simple question. what happens if those programs are cut? >> well, obviously, a complete disaster. peopling can try to go to food pantries, rely on charity from friends and neighbors, and people in churches, friendses and neighbors are going to do as much as they can, but most of those groups are actually relying on the federal programs to give assistance. if you drive meals on wheels, you're volunteering your time, but the meal is coming from a federal program. so, i think as much as we would call upon our volunteers to help, if those federal programs disappeared, it would be very, very difficult. >> miss watkins, you live in the northeast kingdom, a rural area in the state of vermont. what is your observation about

seniors in their struggles economically? >> i've seen seniors give away or put down their pets because they can't afford to see them, close off all but their living room and use their oven to heat the house and turn off one utility in favor of the others. they don't use lights. they go to bed when it's dark and get up when it's light. if it's gray outside, too bad. they don't have the money for electricity. i've known a lot of seniors in my area who have gotten together, one will give up their hose and live with another. you just start giving things up. you just peel things away that you've gotten used to all your life. you don't shop for new clothes, get your glasses fixed. you are supposed to take

medication seven days week and you take it four, to stretch it out. you decide which is the most important medicine and you don't get the others refilled. i know a woman who needs an inhaler and doesn't have one. she has gone to the hospital twice in three years. it gets worse. >> the point of the hearing is to raise consciousness on those issues because the stories you and others have told are to a significant degree being pushed underneath the rug. you have a lot of seniors in urban areas and rural areas who are desperately, desperately trying to maintain their dignity, and i don't thing we know that as a nation. we haven't heard enough about that, and until we know that it becomes too easy for folks to stand up -- tomorrow we're going to cut social security, and raising the lower -- eligibility level for medicare a few years, what's the problem. cut back on medicaid and the meals on wheels program, we can

tighten that up a little bit. they don't know what the human cost of that is. so thank you very much for your general testimony. dr. kingson. >> i just think you're so right, senator. we don't see people. there's an amnesia that is so problematic today. we don't remember the poorhouse. we don't remember what the world was like before we had social security and medicare. and i'm very -- extremely concerned for the bottom 20% and also concerned we have crisis coming down the road among baby-boom cohorts and people who follow. in many ways that's what we are fighting for, too to make sure we have a retirement system that works for them, and we have people who have lost housing, lost equity, lost pension protection, lost jobs, not seeing their wages increase, moving into retirement, and they don't have a lot of time to make up that, and part of what is happening, i think, being middle

class -- middle class implies a sense of security. a sense that you can deal with the difficult times that might happen but still be basically okay. we're squeezing the middle class, and we're shrinking the middle class, pulling that security away, not only from the very poor who never had it, but from the hard-working people, and even the upper middle class. it's a world that we have to deal with, and it's for that reason i'm just pleased to be here, proud to be here, because i know you're asking the right questions. thank you very much. >> senator franken. >> i'm glad that monday hartmann you brought up the fact that very often it's the churches who are doing the work on meals on wheels or something like that, but a lot of people don't realize that is coming -- that is part of the older americans

act. that is the funding that is coming through. so, it enables the churches chuo do that job, and to do a wonderful job as they do, and many volunteers. so it's really leveraging the older americans act, in many ways is such a good use of funds because it enables seniors to stay in their homes, and not have to go to a nursing home, and -- which is much more expensive to everybody concerned. and not what they want to do. so i thank you for bringing that up. i know that ms. nathan, the national council on aging launched encouraging congress to strengthening the older americans act during this year's reauthorization. how many members of congress have joined the support drive?

>> so far, senator, chairman sanders, and aging committee chairman coll have provided statements of support. >> well, add me, would you, please? >> we're delighted to do that. thank you very much. >> i'm committed to -- this has been a big part of what i've been doing in minnesota in terms of listening sessions and et cetera, and committed to strengthening the older americans act. i plan to introduce legislation called the home care consumer bill rights that would put in place additional protections for seniors who receive home and community-based services. my bill would expand the long-term care ombudsman program for seniors in their homes and guarantee every senior receives home and community-based services if protected by the home-care bill of rights as they

are in minnesota. does that sound good to you? >> sounds wonderful. we're well aware of the works you have don with your constituents and your recommendations to strengthen and improve the older americans act and we deeply appreciate your commitment and support. >> thank you. mr. kingson, i think one of the -- it's been touched on a couple times thus far, but the change in the collapse of the real estate market has had a real effect on seniors, because traditionally seniors have had this sort of nest egg, in a sense, in their home, and push come to shove, they could sell their home. and the housing market today is such that real estate has disappeared and some seniors are

even under water in their more than. so that option is gone. so, we're really talking about the most vulnerable americans now at a very vulnerable age as they get older and older, and as we talk about this chain cpi, how much, you say, that would take a year from someone who is 65 and 20 years later, how much do. >> in the testimony i used an example of a woman who has turned 65 today, and she has worked her life, she was a legal secretary. move forward the time, ten years out, she has the benefit of around $15,000. ten years out she loses about

$600 that year. 20 years, she loses about $1,000 that year. 900 or a thousand, and further out she loses 1400 a year. that's in real dollars adjusted for inflation social security benefits are very modest. the average older -- retiree receives about $14,000 a year in social security. >> and then as you said, as you get older, your assets disappear, and you don't -- you're less likely to be earning, more likely to be using healthcare services that have some out of pocket. so, we are really asking, if we do this, for the most vulnerable americans to be sort of the ones that are absorbing the hits

towards creating a -- reducing our deficit and creating -- >> we would be asking many vulnerable people, including middle class people. and, yes, that we would be doing that -- now they propose a birthday bump, perhaps increasing the benefit by 1%. old simpson proposal included a 5% increase over several years at age 85 or so. it doesn't do the job. the cumulative impact on the woman that i put forward or typical beneficiary, if they live to 95, they're losing $24,000 in real income. >> this is something we're doing at a time when there just is a refusal to ask people who, in our economy, are doing extraordinarily well, better than people -- any people have ever done sort of in the history

of the world, and there's an absolute refusal to -- on the part of some, to ask those people themselves to make any kind of contribution towards this, towards the sustainability of our debt, even while we're really setting up a construct where the most vulnerable people in our country will be asked to give. they'll be asked to contribute to our fiscal sustainability and not those who are wildly, wildly successful, and successful because they lived in this country that has provided their opportunity and provided the infrastructure for them and provided the legal apparatus and all the stuff that those of us who have done well in our society have been fitted from. ...

>> thank you, cementer franken for all the work you are doing for seniors and for your contribution today. let me just conclude, picking up on a point that senator franken made. a number of wonderful people have pointed out that hard to judge a society is how you respond to the needs of the weakest and the most vulnerable

and the population that we are talking about today when people get 70, 80, 90, they are vulnerable. and it seems to me that at a time when the wealthiest people in this country are doing very, very well at a time when our deficit was caused by unpaid laws and tax breaks for folks who didn't need the money, the wall street bailout and so forth, i think we have got to take a very hard look at the morality and the economics of balancing the budget on elderly people and some of the most vulnerable people in our society and that's the point many of you have made this morning and i thank you very much for your testimony. what we are trying to do is raise consciousness on the issue that in this recession many seniors are hurting and we cannot simply balance the bush on their backs. thank you for a much for your

contributions. thank you. >> the subcommittee meeting is adjourned. [inaudible conversations] [inaudible conversations]

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