AARP: Economic Recovery Package To Provide Further Relief For Older Americans

Source: AARP Press Center | 2009-01-22

January 22, 2009

Contact: Alejandra Owens, AARP, 202-434-2560, asowens@aarp.org

WASHINGTON— AARP CEO Bill Novelli sent a letter to House leaders today commending the efforts to create a strong economic recovery package. AARP continues to be encouraged by the ongoing efforts in the House as a focus on relief efforts that directly address the most immediate and day-to-day needs of individuals across the nation.

AARP hopes to see the inclusion of further provisions added to the recovery bill that would allow for a payment to older individuals that would provide further economic relief. Older Americans in particular continue to face difficult decisions between paying for day-to-day necessities such as food, medicine or utility payments.

Excerpts from Novelli’s letter to Congressional leaders follow:

“We are very pleased that the legislation includes funding for Medicaid, health information technology, health care effectiveness research, nurse and primary care training, and affordable health insurance via Medicaid and subsidized COBRA for those who lost health coverage along with jobs.

“In addition, we agree that it is critical to extend and increase unemployment benefits; augment Food Stamps and other nutrition supports; provide substantial funding for infrastructure projects that expand mobility options, give priority to repair of existing roads and bridges, and create new and sustainable “green” jobs; and provide greater funding to the Social Security Administration at a time of significant caseload increases.

“However, we are very concerned that millions of retired and disabled individuals – many of whom were initially left out of stimulus relief last year- will be ineligible for either a Make Work Pay credit or an additional SSI payment. At least 26 million individuals age 65 and older no longer work, but would otherwise be income eligible to receive a Make Work Pay credit. Equity calls for providing these individuals with some level of assistance, especially given that many of them have suffered significant economic harm during the past year and may be in dire straits financially. An additional payment using the Social Security disbursement system would greatly aid these individuals and would treat them on par with workers who are struggling in this economy and eligible for a Make Work Pay credit.
“AARP is encouraged by your efforts to address the current economic crisis. We urge you to pass legislation as soon as possible to promote an economic recovery and to provide assistance to people of all ages hardest hit by current economic conditions.”


A full copy of Novelli’s letter follows:

The Honorable Charles B. Rangel Chairman Ways and Means 2322-A Rayburn House Washington, DC 20515

The Honorable Dave Camp  Ranking Member 341 Cannon Building Washington, DC 20015

The Honorable Henry Waxman Chairman Of U.S. House Committee on Energy and Commerce 2109 Rayburn Building Washington, DC 20515

The Honorable Joe Barton Ranking Member 2204 Rayburn House Office Washington, DC 20515

Representatives Rangel, Camp, Waxman and Barton:
On behalf of AARP’s 40 million members, we write to commend you and your committees for developing a wide-ranging legislative recovery package, the scope of which reflects the gravity of this economic crisis. We have requested many of the proposals you have included in your legislative summaries, and strongly supports their swift enactment. We are very pleased that the legislation includes funding for Medicaid, health information technology, health care effectiveness research, nurse and primary care training, and affordable health insurance via Medicaid and subsidized COBRA for those who lost health coverage along with jobs.
In addition, we agree that it is critical to extend and increase unemployment benefits; augment Food Stamps and other nutrition supports; provide substantial funding for infrastructure projects that expand mobility options, give priority to repair of existing roads and bridges, and create new and sustainable “green” jobs; and provide greater funding to the Social Security Administration at a time of significant caseload increases.
As this process moves forward, however, we urge that a few additional measures be included to strengthen your legislation. We are concerned that many retirees and the disabled who are no longer working are ineligible for a Make Work Pay credit, and we urge that a Social Security payment be made available to them. We also urge that you require states to not cut benefits in order to receive additional Medicaid funding and that you provide homeowners facing foreclosure the option of preventing the loss of their homes through judicial modification of their mortgages in bankruptcy.
Social Security Payment for Retirees and the Disabled
AARP supports efforts to provide a credit against payroll taxes for workers as a means of providing tax relief during these difficult economic times. Almost half of AARP’s members work, and would benefit from this proposal. In addition, we also support your proposal to provide an additional Supplemental Security Income payment to the neediest older and disabled individuals.
However, we are very concerned that millions of retired and disabled individuals – many of whom were initially left out of stimulus relief last year—will be ineligible for either a Make Work Pay credit or an additional SSI payment. At least 26 million individuals age 65 years and older no longer work, but would otherwise be income eligible to receive a Make Work Pay credit. Equity calls for providing these individuals with some level of assistance, especially given that many of them have suffered significant economic harm during the past year and may be in dire straits financially. Therefore, these individuals are likely to spend additional funds immediately. An additional payment using the Social Security disbursement system would greatly aid these individuals and would treat them on par with workers who are struggling in this economy and eligible for a Make Work Pay credit.
Medicaid and Health

We are very pleased that the legislation would give states a temporary increase in Medicaid matching funds. States desperately need this money to help the growing number of Americans who cannot afford health care on their own at a time when revenues are plummeting and health care inflation continues to spiral out of control. We are pleased that it requires states to not cut Medicaid eligibility standards, methodologies, or procedures; includes additional funding for territories; and extends the moratorium on harmful Medicaid regulations.

However, given the proposed Maintenance of Effort definition, we have grave concerns that the bill would not prevent cuts in so-called “optional” benefits that are essential for many older Americans. This is important because 90 percent of Medicaid long-term care and virtually all home and community-based services (HCBS) that keep people at home and out of nursing homes are “optional” benefits that states can cut at will We strongly urge that states be required to maintain benefits as well as eligibility in order to prevent cuts in these vital services. We also support an increase in matching rates for HCBS, which would help individuals now on waiting lists get the services they need, create jobs, encourage states to expand access to HCBS, and preserve gains states have made in this area.

In addition, we strongly support provisions allowing states to cover unemployed individuals and their families in Medicaid with a 100% federal match, and extending subsidized COBRA to those who have lost health insurance along with their jobs. Allowing people 55 and older to keep subsidized COBRA is particularly important, as this is the fastest growing group among the uninsured because they are generally unable to find affordable coverage on their own.
Housing Assistance
The stimulus bill should allow for judicial modification of home loans – allowing bankruptcy judges to modify home loans for primary mortgage debt, as they can already do for any other form of securitized debt, including investment properties, vacation homes, and yachts. In addition, the stimulus should include a foreclosure deferral period for struggling borrowers who continue to make a good-faith effort to pay their mortgage, allowing them time to either work with their lender or servicer to modify the terms of their existing mortgage or refinance with a new, more affordable loan (including loans under the Hope for Homeowners program).

A recent AARP Public Policy Institute study found that, in the last six months of 2007, nearly 700,000 homeowners age 50 or older were either delinquent in their mortgage payments or in foreclosure, representing 28 percent of all delinquencies and foreclosures of primary mortgages during that period. The study found a high correlation – roughly twice the national rate – between older homeowners with little or no equity in a home and likelihood of foreclosure. In 2006, some 2.3 million households headed by persons age 50 or older had less than 20 percent equity in their homes. Since then, housing prices have fallen a further 20 percent and are expected to fall at least 10 percent next year. Greater numbers of older homeowners will face possible default or foreclosure in the coming year.

AARP is encouraged by your efforts to address the current economic crisis. We urge you to pass legislation as soon as possible to promote an economic recovery and to provide assistance to people of all ages hardest hit by current economic conditions. If you have any further questions, feel free to call me, or please have your staff contact Elaine Ryan at 202-434-3789.
Sincerely,
William D. Novelli
Chief Executive Officer

AARP is a nonprofit, nonpartisan membership organization that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 34.5 million readers; AARP Bulletin, the go-to news source for AARP's 40 million members and Americans 50+; AARP Segunda Juventud, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP.org. AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.