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This study was prepared by the staff of the Human Resources and Community Development Division of the Congressional Budget Office under the supervision of Nancy M. Gordon, Assistant Director for Human Resources and Community Development. Questions regarding the analysis may be addressed to Marilyn Moon.
 
 

This study examines the cumulative effects on the elderly of changes in income security programs, both those enacted for 1982 and those proposed for 1983 in the Administration's 1983 budget. Program changes examined here include those in Supplemental Security Income (SSI), food stamps, and subsidized housing. The cumulative effects are illustrated by simulating the impact of these program changes on example households for January 1983. In addition, the impact of changes in Medicaid and Medicare are discussed separately.

The major findings of this study are:

• The combined effects of the proposed cuts in food stamps and Supplemental Security Income (SSI) would lower income plus food stamp benefits to the example households by less than 9 percent as compared with current law and by less than 10 percent as compared with prior law (before the changes enacted for 1982).
  
  
• The cumulative effects of these proposed changes would have a greater impact on newly eligible beneficiaries than on those currently participating in the programs.
  
  
• Increases in tenant rent payments for the public housing and Section 8 housing programs would vary considerably compared to current law--rising as much as 20 percent for newly assisted households and, in some cases, requiring no increase in rent payments for current tenants.
  
  
• Although the exact amounts of Medicaid reductions for the elderly are difficult to assess, proposed changes in Medicaid would have a greater effect on low-income elderly than the Medicare reductions, since Medicaid would normally absorb higher out-of-pocket costs resulting from the proposed Medicare changes.

The cumulative effects of the proposed changes vary considerably depending upon the characteristics of the example households. Thus SSI reductions modeled here would only affect newly eligible beneficiaries who have some other income. Also, housing assistance changes would be implemented more rapidly for newly assisted tenants.

The study has, however, three major limitations that should be considered when assessing these results. First, these are example households, chosen to illustrate particular aspects of program changes; they may not be representative of all elderly households. Second, by assuming that the example households participate in all available programs, the findings may overstate the reductions faced by low-income households in general. Finally, not all changes in the programs have been modeled. In most cases, the omitted changes would have small effects, but when taken together the omissions lead to an understatement of benefit reductions.

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