Academic journal article Generations

The Aging Network in Today's Economy

Academic journal article Generations

The Aging Network in Today's Economy

Article excerpt

Even before the 'meltdown/federal,' state, and local budgetary pressures were interacting with growing numbers of older people to strain the capacity of Older Americans Act agencies and programs to deliver needed services to elders-especially home- and community-based care.

The network of providers of aging services, along with other human-services providers, is facing unprecedented challenges in meeting the needs of a growing older population. The work has been made more difficult in recent months by the worst financial crisis since the Great Depression. This crisis has resulted in states instituting budget reductions of a magnitude we could not even have contemplated less than a year ago in order to close the structural budget gap and realize recurring savings. Coupled with the financial crisis faced by states is the individual economic crisis now experienced by older adults, from mortgage foreclosures to significant devaluation of pension plans, coupled with rising costs for healthcare, food, and energy.

At the same time, aging network providers, including the area agencies on aging, have also reported increased costs for fuel, food, energy, insurance, and administration. Needs are indeed growing based on population growth and the economic losses faced by older workers and retirees. Past investments in home-delivered meals and community-based homemaker and personal-care services are being outpaced by demand, and local budgets that provide matching funds or some form of cost sharing with the states are stressed. Additionally, philanthropies have been negatively affected by losses in the financial sector, reducing the fundraising that supplements dwindling grants and public funds, and forcing révaluation of funding priorities. For example, when Lehman Brothers and Bear Stearns went under, the New York City Meals on Wheels program lost tens of thousands of dollars in employee donations.

The enormous pressures faced by the aging network are not new and in fact have been developing as a result of thirty years of flat funding of the Older Americans Act. In 1980, when there were 35.6 million Americans age 60 and older, the Older Americans Act received $993 million in funding ($2.5 billion in 2007 dollars, after adjusting for inflation). By 2000, the over-60 population had grown to 49 million, and funding for the act had increased to $1.5 billion. In 2007, with 53 million Americans age 60 and older, the entire Older Americans Act was $1.85 billion. Additionally, the number of

older Americans age 85 and older has more than doubled (an increase of 141 percent, from 2.2 million in 1980 to 4.9 million in 2007, and the age-75-plus group increased by 69 percent over that same time period (U.S. Census, 2000, 2007; Congressional Research Service Report to Congress, 2004, 2008). Thus, even before the current economic downturn, the Older Americans Act was required to serve a much larger population with considerably fewer dollars, after adjusting for inflation. In comparison, the Medicaid budget has increased from $22 billion in 1980 ($90 billion in 2007 dollars, adjusted for inflation) to $333 billion in 2007 (Centers for Medicare and Medicaid Services [CMS], 2008). As an entitlement program, Medicaid has grown with national increases in spending on healthcare, long-term care, and prescription drugs, while comparable needs in the nonmedical arena have not kept pace with increases in either population or costs.

In better economic times, state budgets have supplemented flat federal funding for services to older Americans by providing additional funding in such areas as home-delivered and congregate meals, transportation, and in-home service programs. However, state budgets are experiencing a precipitous decline in revenue from business and personal income tax and sales tax, with revenues expected to plummet further based on reports of escalating job losses. As an example, New York, a state that has benefitted from revenues derived from surcharges on Wall Street and income taxes on the bonuses of financial executives, this year faced an almost $18 billion budget deficit, the largest in history. …

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