According to census data on voter participation levels from 1964 to 1984, rates of voting increase steadily with age until age 65 (chart 5-3). In the November 1984 election, one-third (33.9 million) of those who reported voting were 55 years or older. Of all age groups, voters age 55 to 64 and 65 to 74 had the highest participation rates (72 percent). Voting participation for those 75 and over (61 percent) is slightly below that of the population aged 35 to 44 (64 percent in 1984).

The same relationships between older and younger voters held in the November 1982 midterm election, although in non-Presidential elections, levels of voting are lower for all age groups. In that election, persons 65 to 74 voted at about the same rate as persons 55 to 64 (65 and 64 percent, respectively). Fifty-two percent of persons 75 and over voted in 1982, slightly lower than in the 1980 general election but still comparable to the 25 and older populations as a whole. The typical decline in voting in midterm elections is more precipitous among young voters than among older voters. A higher proportion of 1982 voters than 1980 voters (37 percent versus 33 percent) were 55 years of age or older.

In both elections, among the elderly, white men were the most likely to vote, followed by white women, then black men and black women. Among the elderly who were registered to vote in 1980 but did not, 40 percent attributed the cause to illness. About 20 percent of all registered voters did not vote in 1980 because of lack of interest or lack of preference for either candidate, but the elderly mentioned these reasons only about half as often as other age groups. (This information is not available for elections after 1980.)

Chapter 6

FEDERAL OUTLAYS BENEFITING THE ELDERLY

Since 1960, the share of the Federal budget spent on programs serving the elderly has nearly doubled. In 1960, less than 15 percent of the Federal budget was spent on the elderly. In fiscal year 1986, programs benefiting the elderly accounted for 26 percent of the Federal budget, down from 28 percent in fiscal year 1984.

The long-term increase in share of the budget spent on the elderly has occurred primarily because of legislated improvements in income protection, health insurance, and services which were enacted in the late 1960's and early 1970's in an effort to reduce high levels of poverty among the elderly. At the same time, the focus of spending on aging programs has shifted. Retirement income has declined as a percent of Federal spending. Today, two-thirds of the budget for the elderly is spent on retirement income as compared to 90 percent in 1960. Health care spending, in contrast, has become an increasingly significant element of Federal spending. Spending on health programs for the elderly has increased from 6 percent in 1960 to an estimated 29 percent of Federal outlays for the elderly in 1986 (chart 6-1 and table 6-1).

SOURCE: Executive Office of the President, Office of
Management and Budget

TABLE 6-1.-FEDERAL OUTLAYS BENEFITING THE ELDERLY 1-Continued

1 Much of the data used to compile this table are based on unsubstantiated estimates and preliminary program and demographic information. Most estimates are for recipients aged 65 and over, include the effects of proposed legislation such as COLA freeze, and include rough estimates of the effect of Gramm-Rudman-Hollings on fiscal year 1986 outlays. Some Federal programs (e.g., consumer activities, USDA extension services, national park services) have been excluded due to lack of data.

2 Fiscal year 1984 outlays reflect an 11-month benefit period.

3 HUD defines "elderly" beneficiaries as households with head of household 62 and over.

* Financing changed from loan guarantees to direct loans results in one time fiscal year 1985 outlay increase in Public Housing.

5 Reflects net disbursements for new direct loaris.

6 Includes nutrition assistance to Puerto Rico.

7 Based on 30 percent of total program obligations.

8 Drop in unemployment rates and associated reduction in outlays causes the decrease between fiscal years 1983-85.

• Total Federal outlays includes items categorized as off-budget before fiscal year 1985.

Source: Office of Management and Budget, February 1986.

Only excessive increases in the cost of health care threaten to further expand Federal spending on the elderly. Forecasts of the costs of pension and health care programs over the next 50 years indicate that the share of the budget devoted to pension spending

will decline somewhat and remain below current levels in the future. On the other hand, without some change in the method of financing, the share of the budget devoted to health care spending will continue to rise and may eventually surpass the cost of pensions.

A. FEDERAL SPENDING FOR THE ELDERLY

MOST FEDERAL SPENDING FOR THE ELDERLY IS FOR SOCIAL SECURITY AND MEDICARE

In fiscal year 1986, an estimated $269.5 billion of Federal spending was of direct benefit to older Americans. Of every dollar spent on the elderly through the Federal budget in that year, 54 percent went to Social Security and 27 percent went to Medicare and Medicaid.

Social Security and all but a portion of Medicare are financed through dedicated taxes collected expressly and exclusively for the purposes of paying retirement and health benefits. In the last two decades alone, increases in social insurance benefits have helped to cut the poverty rate among the elderly in half-from 28.5 percent in 1966 to 12.6 percent in 1985. Today, social insurance benefits are credited with preventing 86 percent of the poverty that would exist if Social Security were not available, according to estimates of the Office of Management and Budget. Without transfer payments, OMB says, 55 percent of the elderly would be poor today.

1U.S. Congress. House. Committee on Ways and Means. Subcommittee on Oversight. Testimony of Hon. David A. Stockman. Director, Office of Management and Budget. Hearing. 98th Congress, 1st Sess. Nov. 3, 1983, Washington, U.S. Gov't. Print Off., 1983.

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The Federal Government also provides pensions and compensation in exchange for services provided to the Government. It provides disability compensation and pension benefits to veterans of military service and to its own former employees and their survivors 65 years or over. About 12 cents of every Federal dollar spent on the elderly in fiscal year 1986 went to support these programs. A third area of Federal involvement with the elderly is in providing means-tested benefits to elderly poor who are unable, despite the existence of a universal social insurance system, to meet basic subsistence needs. About 4 cents of every dollar spent on the elderly in fiscal year 1986 is expected to be used to provide Supplemental Security Income (SSI) benefits, housing, food stamps, energy assistance, and social services to low-income individuals.

The fourth area of Federal spending on the elderly includes programs of general benefit to the elderly such as social, nutrition, and employment services provided through the Older Americans Act, research conducted through the National Institute on Aging, and volunteer services through ACTION agency. Less than 1 percent of the elderly's share of the Federal budget is spent on these programs.

B. COSTS TO INDIVIDUALS AND FAMILIES INCREASED FEDERAL SPENDING FOR HEALTH CARE HAS NOT REDUCED HEALTH COSTS TO OLDER AMERICANS

While the enactment of Medicare triggered the most rapid growth in Federal spending for the elderly, it has not effectively reduced the burden of health care costs for the elderly and their families. From a program spending $7 billion in 1970, Medicare has grown to a program with $70.2 billion in Federal outlays in 1986. Over the last 12 years, Medicare outlays have increased at an average rate of 18 percent, more than twice the rate of inflation and one-third faster than the growth in national personal health care expenditures. Even with savings measures enacted in the 1980's, it is still projected to grow at least twice the rate of inflation through the end of the decade.

Despite this growth in annual spending, Medicare payments increasingly fail to keep pace with rising health costs. Health care expenditures not paid by Medicare have been rising steadily as a percent of elderly income. By 1984, health spending not paid by Medicare equaled 15 percent of the average per capita income of a person 65 years or older. The elderly pay one-fourth of their total health care bills out-of-pocket.

Medicaid was enacted to provide matching funds to the States to finance health insurance for the poor, including supplemental insurance for the elderly poor covered under Medicaid. Medicaid has also grown rapidly with Federal and State outlays rising from $4.9 billion in 1970 to $37.5 billion in 1985. Federal Medicaid payments going to the elderly amounted to $14.1 billion in 1986, more than three and a half times the amount spent on the elderly only a decade earlier. The portion of total Medicaid spending attributed to the elderly has remained about the same over the last decade, 37 percent in 1974 to 38 percent in 1986.