The Politics of an Aging Population

The Census Bureau has just issued a new report on the rapid aging of the U.S. population. There’s a lot of good data and graphs in it, but I want to focus on just one implication right now: the political impact of an aging society.

First let’s look at the data. According to Census, 27.1 percent of the population is currently under age 20, 59.9 percent is between 20 and 64, and 13.0 percent is 65 or older. By 2020, the under-65 share will fall by 3.1 percent and the 65 and over share will rise to 16.1 percent of the population. In raw numbers, the number of those 65 or over will rise by 14.5 million persons.

Now let’s look at a second new Census report on voting in the 2008 election. It shows that voting is highly correlated with age: the older one is the more likely that person votes, as shown in the following table.

The Census Bureau estimates that the odds that someone voted were twice as high for someone aged 45 to 64 as for someone 18 to 24, and more than three times as high for someone 65 or older.

In short, what we see is that over the next ten years the percentage of the population that benefits from Social Security and Medicare is going to rise significantly and that this group of the population votes in higher percentages than those that pay for these programs. And those that will, over their lifetimes, bear the heaviest burden of paying for entitlement programs–the young–vote at the lowest rate of any age group.

I bring this up because so many right-wingers seem to think it will be a simple matter to slash or even abolish major entitlement programs into order to restore fiscal stability. Rep. Paul Ryan, for example, would essentially abolish Medicare by turning it into a voucher program and reducing spending for these vouchers substantially below the per capita cost of Medicare, as well as indexing increases in the voucher to well below the historical rate of medical price inflation. He just assumes that somehow or other the market will adjust to prevent a massive reduction in the quality of medical care for the elderly.

I don’t want to debate whether slashing entitlements is a good idea or the merits of Rep. Ryan’s plan. I just want to know where supporters of such policies think the votes are going to come from? It’s hard enough already to cut programs like Medicare when the percentage of the population benefiting from them is lower than it will be in coming years. And as we know, the self-proclaimed party of fiscal responsibility increased Medicare spending by trillions of dollars in 2003 without paying for a penny of it, and more recently opposed any cuts in Medicare to pay for health care reform. Even Senate hopeful Rand Paul, darling of the tea party crowd and self-described libertarian, favors a big increase in payments to doctors who treat Medicare patients.

In short, there is virtually no chance that Congress is ever going to very substantially cut elderly entitlements and none whatsoever that it is going to abolish Medicare as Rep. Ryan proposes. While as a simple matter of math spending for Medicare will have to be restrained since it is rising faster than GDP, the sort of radical cuts or quasi-privatization that right-wingers favor is politically impossible now and will become even more politically impossible when a higher percentage of voters are on Medicare.

If this is the case, then there are really only two options: slash non-entitlement spending on things like national defense or raise taxes. The option of doing nothing and just pushing the costs off onto our children, grandchildren and great grandchildren by running deficits and raising the debt/GDP ratio–which is what we are doing now–will at some point no longer be an option. Financial markets will see to that, as they are now doing in Europe. And every day we wait to deal with our own fiscal problems the political difficulty increases because the voting power of those that will suffer from cuts in Medicare is rising and the magnitude of the necessary cuts is getting bigger by the day.

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