Something has changed in El Capitan printing

Got a MacBook Air running El Capitan 10.11.1. Question is about Preview (8.1) operation.

When printing booklets on US Letter (8.5x11) paper with source material from Microsoft Word (2011), I have set the paper size to a half page (8.5x5.5) and printed the output to Preview. Word does not do booklet layout (at least that I know of), so I just rearrange the pages in Preview properly and print them two to a page under the Layout option in the Preview Print panel. This used to just put two pages side side and print them at the actual size.

I don't know exactly what happened as I don't do this all that often, but when I tried it recently under El Capitan, Preview (or the printing module) somehow appears to scale the pages down so that they have what appears to be about a 1" border all around the two pages. I just tried it with Word and Pages and get the same result. It has been suggested that this is related to the print driver, but that does not make sense when going to Preview. I have also tried the same file on another computer which does not know anything about my printer with the same result.

Here's what it looks like in most any text editor.

Here's what it looks like when printed to Preview (or a printer). Note the clipping at the top of the right hand page indicating where the margin is.

I've tried using the Scale option in the Preview print panel which doesn't help. What am I missing?