BILL ANALYSIS
AJR 6
Page 1
Date of Hearing: March 31, 2009
ASSEMBLY COMMITTEE ON AGING AND LONG-TERM CARE
Bonnie Lowenthal, Chair
AJR 6 (Beall) - As Introduced: February 18, 2009
SUBJECT : Elder Economic Security Standard Index.
SUMMARY : Memorializes the President and Congress to ensure the
economic security for all elders. Specifically, this bill :
1)Makes numerous declarations, including:
a) The population of people 65 years of age and older is
expected to more than double from the year 2000 to the year
2030, both nationally and in California;
b) There are 75 million baby boomers and the oldest members
of this generation will reach 65 years of age in less than
five years;
c) By 2030, when all baby boomers have retired, retirees
will have at least $45 billion less in retirement income
than they need to cover basic living and health expenses.
Coupled with the current financial crisis that has erased
tens of billions more from their retirement accounts, it is
in the best interest of the nation, state, and our economy
to ensure that California's elders have enough income to
meet their basic needs and maintain their independence in
the community;
d) The United States Department of Health and Human
Services uses the Federal Poverty Guidelines as a benchmark
to determine eligibility for public assistance programs.
In 2008, the Federal Poverty Guidelines were $10,400 for a
one-person household and $14,000 for a two-person
household. In 2007, the official poverty rate for the
total US population was 12.5 percent;
e) The Federal Poverty Guidelines are an inadequate and
antiquated measurement tool that uses a nearly 50-year-old
methodology. The methodology is based solely on one
expense: food and inaccurately assumes that households
today still spend one-third of their income on food when in
fact the United States Department of Agriculture reports
AJR 6
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that the number is actually 10 percent of household income;
f) Despite the significant shortcomings in the underlying
data and methodology, the Federal Poverty Guidelines
continue to be used to determine eligibility for 82
different state and federal programs, and are used by state
and federal policymakers as a benchmark to determine
funding allocations to local communities and to justify
cuts to public benefits;
g) Many of California's elders often do not receive any
public assistance because their incomes are just above the
official Federal Poverty Guidelines, and are therefore
forced to make untenable choices among basic needs; and,
h) A recent study conducted by the University of
California, Los Angeles in collaboration with the Insight
Center for Community Economic Development found that 47
percent (1.76 million) of California's older adults do not
have enough income to adequately cover their most basic
needs, including food, shelter, medicine, and
transportation. The study also documents that
approximately 40 percent (1.46 million) of California's
older adults have incomes above the official Federal
Poverty Thresholds but below what they actually need to
make ends meet in today's economy.
2)States that a more sophisticated and updated calculation of
poverty would provide a more accurate picture of the true
economic needs of elders and their families and that the Elder
Economic Security Standard Index (Elder Index) provides such a
measure.
3)Specifies that the Elder Index serves as the guiding tool for
broad-based planning, evaluation, research, advocacy, and
outreach at the national, state, and local levels, and that a
more accurate calculation of the poverty rate among elders
will result in a more targeted distribution of federal funding
to states to support elders, more effective programs, and
strategic planning.
4)Memorializes the President and the Congress of the United
States to help ensure economic security for all elders and
that they do all of the following:
AJR 6
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a) Ensure that federal policies and programs enable all
elders and their families to meet their basic needs;
b) Use the nationally recognized Elder Index to modernize
all federal poverty measures and guidelines impacting
elders, and by doing so, develop a more accurate measure of
economic need among elders in the United States;
c) Use the Elder Index to recalculate the number and
demographic profile of elders whose basic needs are not
being met; and,
d) Use the Elder Index to evaluate the impact of public
supports and any current or new federal initiatives to help
elders age in place.
5)Requires the Chief Clerk of the Assembly to transmit copies of
the resolution to the President and Vice President of the
United States, the Speaker of the House of Representatives,
the Majority Leader of the Senate, and to each Senator and
Representative from California in Congress.
FISCAL EFFECT : Unknown.
COMMENTS :
California currently has more than 3 million people over the age
of 65, and the number is expected to double to more than 6.5
million by 2020. Recent research from the University of
California, Los Angeles and the Insight Center for Community
Economic Development has shown that 495,000 older Californians
living alone in 2007 could not make ends meet - lacking
sufficient income to pay for even a minimum level of housing,
food, health care, transportation and other basic expenses.
Proponents argue that policymakers struggle to create effective
policies to promote economic security and eradicate poverty
because they do not have an accurate picture of what it really
takes to make ends meet in today's economy. Policymakers
typically measure poverty and determine benefits eligibility by
using the Federal Poverty Line (FPL), a 1963 measure based
solely on the cost of a bare-bones food diet. Although the FPL
is updated annually using the Consumer Price Index, the 2008 FPL
is the same dollar amount ($10,400 for an individual living
alone) whether one lives in a high cost market like urban Los
Angeles, or a low cost region like rural Arkansas.
AJR 6
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In response to the shortcomings of the FPL, The Insight Center
for Community Economic Development led the effort to create the
California Elder Index which sets a new benchmark of income
adequacy for older adults. According to proponents, it provides
the true cost of meeting basic needs and maintaining
independence in the community. The Elder Index methodology uses
national and state data sources, including the U.S. Census
Bureau and the U.S. Department of Housing and Urban Development,
and reveals that in California, the FPL covers less than half of
the basic costs experienced by older adults.
While California's most expensive counties to live in tend to be
urban and coastal, older adults in rural counties face
significant challenges as well. For example, Imperial County
has the highest percentage of single older adults with incomes
below the Elder Index benchmark (67.1 percent). San Francisco
County has the next highest percentage with 61.3 percent of
older adults living alone with incomes below the Elder Index.
The Family Caregiver Alliance (FCA) contends that poverty among
older adults is a problem, not only for those adults struggling
to survive, but for the family members and friends who care for
them. As an organization dedicated to supporting families and
friends who care for older adults and adults with disabilities,
FCA is eager for effective policies that promote economic
security among older adults and their caregivers, yet in order
for policymakers to create such policies, they must have a
realistic picture and an accurate accounting of poverty among
older adults in the state.
According to the author, as policymakers grapple with our
State's budget, it is essential that we be able to accurately
evaluate the effectiveness of existing programs and identify the
most needy populations. The Elder Index is much more robust
than the current tool, FPL.
Prior Legislation:
SJR 15 (Alarc?n) (Resolution Chapter 31, 2004) requested the
President and Congress to begin a process to better calculate
the Federal Poverty Guidelines and to use existing models to
calculate poverty including geographic costs of living.
AB 2521 (Portantino) of 2008 declared that the FPL is known to
be outdated, covering less than half of the basic costs
AJR 6
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experienced by older adults. AB 2521 was held in the Assembly
Committee on Housing and Community Development.
REGISTERED SUPPORT / OPPOSITION :
Support
Insight Center for Community and Economic Development - Sponsor
The Women's Foundation of California - Sponsor
California Senior Legislature (CSL) - Co-Sponsor
Catholic Charities of California - Co-Sponsor
National Association of Social Workers California Chapter -
Co-Sponsor
California Association of Area Agencies on Aging (C4A)
California Welfare Directors Association (CWDA)
Family Caregiver Alliance (FCA)
Jewish Family Services of Los Angeles
Opposition
None on file.
Analysis Prepared by : Allison Ruff / AGING & L.T.C. / (916)
319-3990