Experiences. Guest the federal government has tried to roll up waste and fraud, but when taxpayer money is involved it is different than a private enterprise. The ability for fraud to creep into Government Programs financed by taxes is much tighter than private enterprises because shareholders have their own money that they invest. There are a certain amount of problems. For instance, medicare, probably in the order of 60 billion per year in a wasteful and fraudulent payments. This is a huge number. It is in part because medicare programs paying a billion claims a year for medical services. The ability to track the claims and figure out which ones are right and wrong is limited at the federal level. I think there is a certain amount of things that go on and government that is difficult to get all the waste out. The caller is absolutely right it to be a top priority. Host alright, kathy, Wesley Chapel florida, republican caller. You will have to make a quick. Caller hi. Ok, first, i think it would be can you hear me . First, it would be a Great Service to the early people if they would stop calling Social Security and entitlement programs. Our wages actually funded that. Secondly, is the Administration Action aware of the woes of the people, that we are suffering, when they continue to throw these things back and forth . When we have no means to do anything for ourselves . Host what specifically are you talking about . Caller i am sorry, what did you say . Host what specifically are you talking about, no means . Caller i guess i should address the 58 billion we pay a year for foreign aid. That we pay out each year, to secure our protection so our citizens there, our embassies there, people who keep favor with them. Host isabel, if you could adjust you address them. If i turn to jim be agreed, is it a drop in the bubble but it, 40 . Guest there is a misperception, the size. It is billions of dollars but the size of a 3 trillion budget is very small. Moreover, i am of the view i am not an expert but i am of the view that the amount of money being spent trying to position the United States to have influence in the world, bring about the values we have in the country, to spread those, i am not really a big fan saying foreign aid needs to go. Host unfortunately we have to leave it there. Thank you very much for both of being part of this discussion. We are all out of time here. There is a Senate Committee that is under way looking at the Older Americans act passed in 1965 to provide social services to older adults. One of these presentations i did not have to go into a song and dance about what it is and what we do. Everyone here is familiar with us. The work we are going to be presenting comes from a report that will be released during the hearing, during the presentation. Gao1374, Older Americans act, to improve target and to meet equity. The Older Americans act was passed, to buy services to older adults and help them remain in their homes and communities, and provides very important services. Title 3, provides support Services Like transportation and home delivered meals. Title 3 provides care giver support. And the title 7, it provides protection activities to protect the rights of all vulnerable elderly people. In fiscal 2012, the title three had about 1. 36 billion. Title 7, 22 million. Obviously, with the fiscal cliff discussions, these are sort of rounding errors. But as i am sure you all know, these are services the targeted community depends heavily on. And we know america is aging. America is getting older every day. I think 10,000 people retire every day. By 2030 is as it is estimated 20 of the population will be aged 65 and over. This really targets services to an expanding population. Next slide, please. The current funding formula for the Older Americans act, it is primarily based on age before title b and c and 7, the share of population age 60 and older, and for title 3e, the share of population which is 70 or older. The act also provide a minimal level of funding for each state. No state can receive less than half a percent in total appropriation. In 2012 these numbers were about 5. 9 million and title seven, 108,000 respectively. The law also includes a provision, each state will receive a least as much as in the prior fiscal year. While the federal formula is based on age, the Older Americans act requires state programs to target prioritized services to that population with the greatest economic and social needs. These include factors like poverty, living at or below the poverty level, disability, having physical or mental impairments, and also isolation either cultural, social, or geographic isolation caused by a variety of factors. The states are required to consider such factors when they allocate their federal funds to different local agencies this slide gives you an idea of just the flow of the funds that comes out of h h s, goes through the Administration Community on the ring and aging, goes to a population of states either over age 60 or 70, it goes to the state on aging who allocate using bone formless targeting those with greatest social and economic need to the local agencies, local service providers. In 2011, we did a study where we found that for the very old, those over 85, minorities and poor, experience greater disabilities in terms of being able to perform basically to have an independent lifestyle. These are activities, and we need to book would call them activities of daily living, and a measure things like being able to eat or to bathe ones self, to dress, and so on. We found that many of the same population groups that the Older Americans act identifies as a those having greatest social and economic need, are the ones who also have the impairment to activities for daily living. Previously data were not available to really identify the populations in each state which have limitation on activities of daily living but beginning in 2008 the Census Bureau began collecting data on it. Now we come look at it, that previously we really were not able to explore. This project, we did three things. First, we said how big the states, given their path is targeting to those of greater social and economic need, how their allocation formulas looked like . Secondly, the of the federal government were to move more toward such an allocation, what our options they can do to implement targeting to the population with a greater social and economic need. And, three, what are the distribution consequences of some of the options. Typicalgao this phonology, we did a bunch of Different Things. First, we collected information. The interstate funding formula for all 50 states. And then we read the literature. We did the literature on the Older Americans act services, held their debuts in general and we interviewed at the same groups and did site visits to the states of illinois and wisconsin, we spoke to federal officials and so on, and finally we were able to collect data from the Census Bureau, on the activities of daily living. We got labor statistics data, housing data, and collected data by the treasury as well. The first objective, basically what we found is state interpret the requirement to target those with greatest social and economic need in a variety of ways. They use a lot of different variables. They include things like age. They look at income, poverty level. They look at rural residence. They look at disability and parents that is. They look at the percentage of population that may be a minority. And then the states vary in terms of how much they convinced the variables, and whether they include all of them. How much they weight the variables and whether they include all of them. The second objective, we look at if the federal government was going to move in the direction and change the formula of Older Americans act, how might one do that . The social science limit literature, there are a couple of standards people use, lead to assess equity in the situations. A common one is beneficiary equity. These are basically targeting program and resources based on need and also suggesting that the state level or unit level for the cost of providing the services. You can have, for example, partial beneficiary equity, which really just look at the size of the population that really is to be targeted. The canal full beneficiary equity, which would also incorporate some sort of cost measure into the analysis. In this report, we looked at partial beneficiary equity. We were not able at the time to complete the work on a full beneficiary equity. That is something we now have the capability of doing and we can share with the senator and staff or anyone interested in seeing the information. Another variable is taxpayer equity. This you can think of in a lot of different ways. I do not want to get too technical, but basically it is looking at the ability of the state contributing a comparable or proportional amount of resources to the federal program. What we did, the current formula of just targeting populations on the basis of age, really does not seem as correlated with this population of greatest social and economic need compared to the use of some of the variables. For example, we know the current family formula does not take into account the needs of the Elderly Population. It does not have any sort of cost factor and certainly does not take into account any capacity of the states to finance services. To give an example, we took two states. We just took the states and basically the only reason being they have comparable populations of people age 60 and over. And then we said, well, lets look at, suppose we look at those states and say the population over age 60, how many of them had at least one limitation to them being able to perform daily living activities. And we found here that while the states were comparable just in terms of looking at population of over age 60, when you start looking at what the adl limitations, that are quite different. Under the current formula, colorado and louisiana get comparable amounts of resources, while if we inc. An adl limitation variable, the differences, the population differences would be fairly significant. So, looking again at using this variable of an adl limitation i will look at how correlated is it with other key aspects of the population that many might consider have a greater social and economic need. If you look at poverty level, for those over age 60 and reporting at least one adl limitation, about 50 were below the poverty level. 42 were limited english speaking. And if you look at minorities, those minority and lowincome, over 50 of the population that had at least one limitation to an adl would be in that group. This graph here simply shows as one ages, how peoples ability to function, to do their daily lives, really start to erode. Age 6064, only 34 had an limitation and by the time you are 85 or older, almost three quarters of the population really cannot do it all the things that of one would do just to continue to living independently. This is probably the most interesting figure. If you look at states that have what this graph shows is, we went through each state and we know for all people over age 60 in the u. S. , 34 have one adl limitation. We looked at all the states and to apportion their of their people over age 60 and compared it to the National Standard 34 . And so, obviously some states are going to have the low 34 percent and some will the way higher. If you look at the very dark space and the central part of the country, which includes kentucky, alabama, West Virginia, those are the states that if you recruited include a limitation on adl, they have a very Large Population that falls into that category. The lightly colored states nevada, roddick, minnesota, some of the others those states have basically a much healthier population over age 60. They have a much lower percentage of people over age 60 that have at least one limitation on their ability to continue independent living. If you wanted to move toward a full beneficiary equity, you would want to incorporate cost factors, and some of the key factors would be things like wages, food, the Program Provides meals to older people, office space, and so on. We did not complete the analysis but we have the capability of doing it at this time. Similarly, we did not get involved, we did not complete our analysis incorporating taxpayer equity. But again, allocations could be adjusted to achieve sets such equity by basing allocations, incorporating a factor that captures a states ability to fund the program services. And so, a state with few or taxing resources would have a larger allocation percentage, and therefore a larger final allotment, Everything Else equal. And also available here, from the department of treasury, that we could look to calculate how it can affect the allocations across space. We did one distributional analysis where we looked at all the states for a partial beneficiary implementing a partial beneficiary equity variable alone. We refined this a population and thus had at least one adl limitation. When you look at this time at you as you would imagine and expect, there are winners and losers. 29 states would have a decrease of funding under the program. 22 states would have an increase. And some of these changes could be fairly sizable. We found 10 states and would have decreases in federal allocation of over 20 while seven states would have increases of over 20 . It could actually have a fairly Significant Impact here. States with higher Elderly Population with adl populations, the dark color in the earlier net slide, what had increasing allocations. And the states that were now getting the minimum allocation, they could see larger decreases. States like alaska, delaware, and wyoming. If you only used this criterion with no other changes, they could suffer significant decreases who their allocations. A lot of in the current law with a minimum standards. If one wanted to start incorporating other factors to improve the targeting of the federal money toward those with greatest economic and social needs, there are a lot of options, a lot of ways you can do that. You could, for example, phase in any new formula. You could have a year one of the new formula you could have 50 of the money being allocated on the old formula, 50 in the new formula and over time you would move incrementally toward the new formula. We could maintain the funding floors and ceilings to sort of minimize the impact of a change in form over any year. You could also keep a hold harmless provision. A minimum allocation provision for small states. So there are a lot of Different Things you can do if he one a to still improve the targeting of this program toward those with the greatest social and economic need. Final things just a few comments. Given a rising Elderly Population in this country and current fiscal concerns, challenges we are facing, one can look at changing the funding formula, the federal funding formula, for the Older Americans act toward those with the greater social and economic needs. There are a lot of different ways to do that. We explored one in this report. There are the ones you could do. And you can also put in of the bells and whistles, other provisions to implement any new funding formula in a way which mitigates any large shortterm effect. With that, i am available and my colleagues are available for any questions you might have. [inaudible] using a threeyear estimate. Can you talk a little bit more about the measure, the ability of the measure and why three year construction and maybe not yearbyyear, and whether there is a lot of variation or another sample size to get the state level measure of disability or just the ability of the validity of it itself . Part of the reason for the threeyear average was to mitigate some of the yearto year variations you would see if you did a yeartoyear estimate. If the American Community survey has been used for quite a mile the American Community survey has been used for quite a while and we believe it is a valid measure of needed with respect to measuring limitations and activities of daily living. Were there specific concerns you had with the measure . Using one year of the acs to get a state level Population Estimate on a, a smaller example of the size of your state may be problematic. Woods wondering if that was part of your factor in going to a threeyear estimate. Are there other formulas and other Government Programs that use acs that use it in this way . We are not aware of and other programs that use acs that way. We were aware of the concerns about the one year of the number and that is why we chose to use a threeyear average. Using the many of the other programs are moving in to use the acs. You could check in a cpdg, how they are splicing it in. May be a very simple question. I am not a social scientist. But on taxpayer equity, i am confused by the title. Your slides are helpful in explaining how they work but i am a little turned around by the juxtaposition of taxpayer and equity because it seems light we are just reading about, confused by the fact that states that have not had higher levels of state level funds and Older Americans act programs and services will then get fewer federal dollars wondering if any thinking was going into the fact that act the act was to leverage additional dollars. State and localities were encouraged to continue to contribute so it was not reliant just upon federal government dollars. Not grasping not so much what you did the why you title the that . Anyone when to jump in . Taxpayer equity is one of the generally accepted equity standards. We did not create the title. It is