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Vital programs for low-income seniors face harsh reductions in proposed budget cuts

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MahurinEcon_Thumb1_350.jpg

The Obama administration has proposed cutting funding for programs that go directly to senior services in the 2012 proposed budget, meaning many older Americans may lose federal aid to help pay for things like heat, food and public transportation.

An analysis by the National Council on Aging highlights what will hit low-income older Americans the hardest, emphasizing the 45 percent cut to the Senior Community Service Employment Program, a 45-year old program funded by the U.S. Department of Labor to help unemployed people over the age of 55 find part-time jobs for community service organizations. Eligibility is limited to 125 percent of the poverty line (more on that later).

“This jobs program works,” said Sandra Nathan, NSCOA’s senior vice president for economic security at NCOA, in a statement. “SCSEP not only helps mature workers make the transition from unemployment to self-sufficiency, it also helps them develop new skills that the economy needs. There are workers in our jobs program in North Carolina right now who are getting trained to install solar panels – just the kind of ‘green’ jobs that the President mentioned in his State of the Union address.”

The National Council on Aging predicts the cut would translate to 55,000 lost part-time jobs.

A recent report from the policy research group the Urban Institute (PDF) shows that 8.9 percent of Americans over 65 live in poverty — $10,289 for a single individual living alone at or over the age of 65, and $12,968 for a couple with at least one spouse at or over 65. The official federal poverty measure considers only pre-tax cash income, not out-of-pocket medical expenses that many older adults pay. The report found that 13 million out of 38 million Americans over 65 live in families earning less than twice the federal poverty rate.

The U.S. Department of Health and Human Services explains two different ways the government measures poverty in its 2009 Poverty Guidelines (latest available):

The poverty thresholds are the original version of the federal poverty measure. They are updated each year by the Census Bureau. The thresholds are used mainly for statistical purposes — for instance, preparing estimates of the number of Americans in poverty each year. (In other words, all official poverty population figures are calculated using the poverty thresholds, not the guidelines.)

The poverty guidelines … are issued each year in the Federal Register by the Department of Health and Human Services (HHS). The guidelines are a simplification of the poverty thresholds for use for administrative purposes — for instance, determining financial eligibility for certain federal programs. … The poverty guidelines are sometimes loosely referred to as the “federal poverty level” (FPL), but that phrase is ambiguous and should be avoided, especially in situations (e.g., legislative or administrative) where precision is important.

So there you have it: The Census figures that estimate how many Americans are living in poverty are used for statistics, while the simplified figures are used to determine things like financial eligibility.

In 2009, the federal government developed a supplemental poverty measure, which factors in non-cash income from food, housing and energy-support programs and subtracts income and payroll taxes, child care and work-related expenses, child support payments to other households and out-of-pocket medical expenses. This was the measure the Census Bureau used in its 2009 estimates to come up with a 16.1 percent poverty figure (compared to the federal 9 percent) pertaining to Americans over age 65. The Urban Institute indicates in its report that medical spending was a major contributor to the higher poverty rate for people over 65.

The AARP, the loudest defender of senior rights, has been speaking out about the impact of some of the president’s budget proposals.

“AARP is deeply troubled … by the disproportionately large cuts in the Low-Income Home Energy Assistance Program (LIHEAP), which would mean that millions of Americans, particularly older Americans, would have a hard time paying their heating and cooling bills next year,” said AARP Executive Vice President Nancy A. LeaMond in a statement. “With heating costs rising for many this past winter, cutting $2.5 billion from this program is unfair and potentially dangerous, and would mean that millions of households wouldn’t get the help they need to keep their homes warm in the winter months.”

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