White House spokesman Ken Lisaius spoke to Daily Record Reporter Lorraine Ash on various issues raised in the "Living on the Brink" report. To reflect the sentiments of the Bush administration, excerpts from that interview appear throughout this series. DR: Is the president aware of the growing affluence/poverty gap in the nation? WH: Of course the president is. He is the president of all 50 states, not just any particular one. He's very fond of saying, if there's a single American looking for a job and can't find one, that's a concern of his. That's why he's taken steps in regard to strengthening our economy -- the tax reform he's put in place, some of the provisions regarding corporate fraud and accounting. These all directly come back to helping strengthen our growing economy. Of course the president is concerned about that issue and other issues that impact the people in Morris County, specifically. DR: You make the point that if there's a person who can't find a job, the president is concerned. There are many people who have jobs, but the quality of those jobs is definitely deteriorating. WH: Sure. When you look at the actual economic indicators we've had in this country, what we can see are things like real disposable personal income, which is an important number, rising by 13.1 percent since December 2000. That is an uptick in something that makes a real difference in people's lives. We look at Gross Domestic Product. During the last four quarters, real GDP grew 3.7 percent. That's above its average pace during the 1970s, the 1980s and the 1990s. Look at other factors over the last four years: Productivity in the nonfarm business sector grew at the fastest four-year rate in more than half a century. We can look at any number of things that show our economy is growing and getting stronger. You were asking a question about those who are employed. Let's talk about employment. Unemployment rates have fallen across all levels of education, race and age since the national peak in June 2003. For example, the unemployment rate for people without a high school diploma is down 1.5 percentage points. For people with a high school diploma but no bachelor's degree, the unemployment rate is down 1 percentage point. The economy continues to get stronger, and that's important. DR: The unemployment rate now being 5.2 percent. WH: It fell to 5.1 percent (for May). That's the lowest it's been since September 2001. DR: Where are these numbers coming from? WH: All the various federal government entities that track economic numbers. DR: Just because a top-line statistic like the GDP is going up doesn't necessarily imply that lower- or middle-income families are getting a share of the economic pie. Because the pie is expanding doesn't mean the bottom is getting its share. WH: Look at real personal consumption spending. It's up 4.1 percent over the past 12 months. Housing starts, a good economic indicator, have reached their highest level in over 25 years in the first quarter. For 2004 as a whole, housing starts reached 1.948 million units, which is the best annual performance since 1978.

By Lorraine Ash
Daily Record

Every afternoon about 4, Aurea Escueta arrives home at the yellow Morristown Victorian where she has lived since 1989. Her long black hair falls over one shoulder as she puts the key in the lock.

When the front door opens, the slight 72-year-old Filipino woman flashes a smile at whichever of her housemates is sitting in the living room at The Mount Kemble Home. Then she makes her way through the living room and small library and up the steps to her apartment.

One recent day, she changed into a white, loose-fitting muscle shirt and set her dinner simmering on the stove. Then she wrapped a big weight belt around her petite waist, to support her back.

"I just walk from work home," Escueta said. She makes salads and prepares Meals on Wheels and cold plates for patients in the dietary department at the Morristown Memorial Rehabilitation Institute, less than a half-mile from her home.

"What I do is fun but, lately, it's too much work. Sometimes it's tiring." She paused. "I don't know if I can retire. I would miss my coworkers. Also, I had both knee replacements two years ago and, if I don't move, my knees get stiff. As long as I can still walk, maybe I'll just work."

From the adjacent bedroom her, computer screen glowed. Outside her window, birds chirped and she smiled contently as she checked on her plants.

For Escueta, The Mount Kemble Home is a comfortable -- and affordable -- haven. Like the other residents, she lives there for a quarter of her income, no matter what it is. In 1989, she paid $60 a month in rent; today, she pays $448.

That works beautifully for her budget. Every month, she said, she takes home $1,200. Every year she gets a raise of 25 cents per hour.

Since 1883, The Mount Kemble Home has been housing women, roughly 60 and older, from anywhere, not just Morris County. To qualify, a woman must have fallen on hard times, be in good health and have a sponsor in case the board has to contact someone on their behalf. She also must have a nice enough personality to get along with the other women.

"This is a nonprofit safety net," said Anne Moore, currently president. "We're always in the red. Rents do not cover the cost of running the place. We have an endowment and we work off that."

Bob Karp | Daily Record Aurea Escueta cooks lunch of rice, tofu and vegetables in her apartment at the Mt. Kemble Home.

Growing
unease
Such a refuge is a rarity as the Bush Administration's ownership society slowly pokes holes in the social "safety net" -- a reference to assurances a government can offer its populace, such as a minimum standard of living for older people and the disabled, and guaranteed health insurance for all.

Poll after poll reflects Americans' growing unease with the weakness of their nets at a time when a slow economic recovery imperils their jobs and the high costs of oil and health care diminish their spending power.

Those most acutely affected include senior citizens caught financially off-guard who find life unexpectedly difficult, even with Social Security. Only with the help of private services, family members and professional free financial counseling are some starting to turn around their financial situations. Without such aids, many seniors -- even those who have run businesses and bought their own homes -- find it bewildering to get by.

They are not alone. Forty-one million Americans live without benefit of health insurance, and those families beset with unexpected tragedies that affect their careers and work schedules find it impossible to keep up or get help.

An independent life
Escueta's contained life, geographically and monetarily, fulfills her. It is more than she thought possible for herself when her widowed mother raised her and her seven sisters during World War II in the Philippines. Never in those early days could she have imagined such experiences as a heavy snowfall or using a washing machine instead of cleaning clothes by hand.

In her own country, when she was young and married with three children, her late husband did not let her work.

"I had to take care of my kids," she explained, adding she also was in charge of caring for a piggery in the family's back yard. At times, her duties included cooking to feed piglets by bottle.

"Oh, my God. I didn't want to do that."

In 1979, when she visited her oldest son, who was in the United States on a work visa, she stayed. Then her other two children followed. Her husband never moved to the U.S. and eventually died in the Philippines. Today, the family is scattered among four states--Missouri, New York, Illinois and New Jersey.

While she and her children are close, Escueta likes the independence The Mount Kemble Home gives her. She likes the other ladies there and what some may see as restrictions, she sees as freedom. She most prizes the chance to work. Back home, she said, she would have been a housewife all her life.

Her expenses, in addition to rent, include food and telephone service. She also buys birthday gifts for her children and seven grandchildren. She does not own a car and relies on Friends of The Mount Kemble Home to take her to the A&P once a week, as well as the Morris Area Paratransit System (MAPS), a Morris County government service.

The Mount Kemble Home is an unusual and wholly private enterprise -- the product of a long chain of philanthropy that began with a group of parishioners from the Morristown Presbyterian Church and extends through the small army of volunteers who keep the dream going today. The legacy has made a cozy and simple existence possible for women who otherwise would find it difficult to get by. Some residents stay for decades.

Senior citizen snares
Not every senior citizen has found such a solution. Sandy Shore, a senior counselor at Novadebt, a nonprofit consumer credit counseling organization based in Freehold, specializes in phone sessions with seniors in tough situations. She finds them caught in common webs of financial troubles and trends:

Some are still paying mortgages after they retire and diverting their Social Security checks to do so, allowing them too little for other living expenses.

"Sometimes I talk to people whose mortgage is $1,500 a month and their income is $1,800 a month," Shore said. "Before, it was $4,000 a month."

As their incomes decrease and expenses stay the same, seniors don't think to supplement their incomes with part-time, low-end jobs. Instead, they tend to supplement with credit cards. When the balances on those cards overwhelm them, they become enticed by the comparatively lower rates they can get on home equity loans.

"But they don't fix the underlying problem," Shore said. "They don't adjust their expenses, which are still the same, or even higher because of the home equity loans. So they go back to the credit cards. Some go to the point of using up a lot or all of the equity in their house. Very often, people have so much debt on their house already that they're not eligible for a reverse mortgage."

Even so, reverse mortgages are at a record high in the United States.

The number of home equity conversion mortgages issued from October 2003 through February 2004 -- 12,848 -- is 112 percent higher than the number made in the same five-month period one year earlier, according to the National Reverse Mortgage Lenders Association.

Mortgage aside, a home is expensive to maintain. Seniors call for expensive professional help to perform even small repairs, which in their younger years they may have been able to handle easily.

Seniors today did not have the opportunity to save a lot during their peak income years. 401(k)'s did not become available until the early 1990s and, while IRAs (individual retirement accounts) were available for seniors in their younger years, these accounts allow for very limited contributions.

Seniors' pensions are fixed. What was a good income when they retired, however, is no longer adequate. The pensions don't go down, but their buying power does.

At a glance The following information comes from a variety of studies and polls: The number of reverse mortgages issued in the U.S. from October 2003 through February 2004--12,848--is 112 percent higher than the number made in the same five-month period one year earlier. 78 percent of Americans, including 71 percent of conservatives, believe health insurance companies should have to get permission to raise premiums. 47 percent of American families in the U.S. who care for a child with a functional limitation have had to cut down on the hours they work.

Many seniors, and their families, find themselves under this cascade of financial realities at the same time national debate is swirling around President George W. Bush's proposal for offering Americans an option to privatize Social Security.

"It's clear people are not buying into Bush's idea of the ownership society," said Karlyn Bowman, resident fellow at the American Enterprise Institute for Public Policy Research, a think tank dating to 1943, and columnist for Roll Call, the newspaper of Capitol Hill.

She believes the White House, in putting forth its case to change Social Security, may have been misled by a variety of polls taken between 1995 and 2004 in which 55 to 60 percent of Americans said they support the notion.

"People were thinking about a hypothetical idea," Bowman said. "Particularly in the late 1990s, they were thinking about it when the market was doing well. They also were responding to a very powerful idea in our society. Americans love choice -- whether it's a choice to kill yourself, to have an abortion, to smoke, to have a personal account."

What happened in the fall after Bush was elected was that an abstract idea became real.

"Suddenly, people thought critically and seriously about it," Bowman said, adding that public sentiment also is fueled by two other factors -- a solid united wall of Democratic opposition to the privatization idea and the popular perception that the Social Security system just plain works.

A Harris poll taken last month showed half of Americans believe the President's plan for Social Security is designed to dismantle, not strengthen, the system.

Bob Karp | Daily Record The Mt. Kemble Home, which has been housing women since 1883. How to learn more Family Voices, a national coalition speaking on behalf of youngsters with special health care needs, www.familyvoices.org Morris Area Paratransit System (MAPS), a Morris County government service that transports residents who are 60 and over, or disabled, and have no other means of transportation, www.co.morris.nj.us/transportation/transitguide/maps.html Mt. Kemble Home, a resident for women on fixed incomes who are independent and capable of taking charge of their lives but unwilling to move in with others, One Mt. Kemble Ave., Morristown, (973) 538-0675 My Community Care Team, a network of referrals and support services to help families in crisis, www.mycommunitycareteam.com NovaDebt, a nonprofit consumer credit counseling organization,www.novadebt.org

Bob Karp | Daily Record Frank Tetto, 57, hugs his 19-year-old daughter Maria, after she gets home from school. Maria who was brain damaged after she was hit by a car 7 years ago.

Holes in the net
Seniors are not the only ones falling through holes in the safety net. Public opinion on guaranteed health care is changing as all Americans face escalating medical costs and 41 million of them do so without health insurance.

"Americans & Health Care Reform," a fall 2004 national opinion survey by the Civil Society Institute, a nonpartisan think tank, shows:

78 percent of Americans, including 71 percent of conservatives, believe health insurance companies should have to get permission to raise premiums;

67 percent think health coverage should be guaranteed;

78 percent say health care is a necessity like water, gas and electricity and should be regulated by the government.

We talk about the importance of family and the importance of people, and the laws say people are equal, but society then basically tells families to move on when they have a tragedy like this. Itís just not right. Bob Karp | Daily Record Frank Tetto, 57, who helps his 19-year-old daughter Maria, who was brain damaged after she was hit by a car 7 years ago.

When a family is hit by an unexpected chronic health condition, the effect on its financial well-being can be severe. That's how it happened for the Tetto family of Budd Lake, which hasn't been the same financially or otherwise since one day in March 1998, when their 12-year-old daughter, Maria, was struck by a pickup truck at the intersection of Route 46 and Wolfe Road. She was attempting to skate across the highway.

Her parents, Frank Tetto, 57, and Alycea, immediately diverted their primary attention to Maria's survival, care and rehabilitation while continuing to raise their other four children at home. The accident affected more than their work lives.

They spent months in hospitals and rehab facilities with Maria, who, from that March day of the accident, did not return home until September 2000. In the interim, she was a patient at Morristown Memorial Hospital, Children's Specialized Hospital in Mountainside and Matheny Medical and Educational Center in Peapack-Gladstone.

For months at a time, her father stayed by her bedside, taking changes of clothes from his wife, eating in the cafeteria and worrying about the attention he was not paying his sons. By day and by night, he watched as his once vibrant, energetic daughter lay motionless with tubes all over her body. He called her name. Nothing. He touched her. No response.

"In 1998, I found out after the fact they had the Asian financial crisis," Frank Tetto said. "I was in the hospital. Monetary things didn't cross my mind. I didn't think about them at all. Perhaps I should have. We lost about $500,000 plus in the market.

"I was on margin and leveraged. I was sold out of things. I didn't have a choice. Messages would come and I wasn't home."

His four tenants at various rental properties stopped paying their rent when they realized no one was coming around to collect it, Tetto recalled. Eventually, he evicted them and liquidated the properties.

Before the accident, he believed his family was "well off, well-set," with more than $1 million in assets in addition to their home. Quickly, they drained. Tetto, a former social worker and one-time daily newspaper production manager who recently had been downsized from his position before the accident, also never created the money management business he had begun to set up.

All his time has been spent fighting for Maria -- for her rights, for medical coverage. He and his wife tended to her needs, found home health aides and then more aides, got her into school, retrofitted their home to accommodate her wheelchair, tended to residual operations she requires, as well as the seizures she still experiences monthly.

He could not get a job that really pays. Well, he could, he said, "but we have this problem during the summer when Maria isn't in school, or is sick, or gets out early: What do we do with her? An institution is out of the question."

For the time being, Alycea Tetto works full time, and is able to do so from home a few days a week. However, she brings home less than $30,000 a year. The couple also spends time helping others in similar situations and working to change a system they can hardly believe exists.

"We talk about the importance of family and the importance of people, and the laws say people are equal," Frank Tetto said, "but society then basically tells families to move on when they have a tragedy like this. It's just not right."

He resents the idea that the state will pay to institutionalize his daughter and those like her but will not provide financial supports to keep her at home, where she wants to be and where she enjoys being pressed to the bosom of her family.

One recent evening, Maria, now 19, motored her chair from her room to the dinner table, where she joined her parents, brother, aide and aide's children for dinner. The aroma of a large bowl of pasta and garden vegetables wafted through the first floor. Her father beamed at Maria as she situated herself at the table, and she laughed happily.

Outside, on the porch, chimes twinkled in a cool spring breeze. It was a warm full family night, and this family was exactly as it always wants to be -- together.

Staying together
The Tetto family cut down on the hours they worked, got by on less, and still failed to make ends meet.

A total of 47 percent of families in the U.S. who care for a child with a functional limitation have to cut down on work hours, according to a 2001 National Survey of Children with Special Health Care Needs, sponsored by the U.S. Department of Health and Human Services. For the Tetto family, as time marches on, the struggle continues.

When Maria turned 18, her father explained, she qualified for Supplemental Security income, which can pay up to about $600 a month. Maria's award was $400.

"For what reason? Because the government knows I'm helping her," Tetto said. "They call it 'deeming.' If the parents give up, the government will put the people in an institution and pay the institution $150,000 to $200,000, but if the parents want the child at home, they give you less.

"I told them it's not me supporting my daughter. It's the credit card company that may never get paid," he said. "I told them, Look at my income. I have none. Yes, we buy her food. Yes, we buy her clothes. But the only thing we're deeming is the home equity credit line and the credit cards."

In the meantime, Maria's 21-year-old brother, Donald, is attending Brown University.

"I decided that if he wants to go to Brown, he'll go to Brown," Tetto said. "We pay $40,000 a year for him to be at Brown with a loan. How I'm going to pay it off, I don't know."

It's not an easy way to live, but the Tetto family sees itself trapped in an unkind fate. They worry about finances and a lot more. In the end, they're parents like all other parents.

"My concerns are what they always were," Frank Tetto said. "I think about the well-being of my kids and all of their futures. I worry about putting things in place for Maria."

Lorraine Ash can be reached at (973) 428-6660 or lvash@gannett.com.