Waugh said on Tuesday that Bailey needed to make tough calls to regenerate the side and had failed to do so in the past, putting Australia's future at risk.
"He's going to have to step up to the plate with the other selectors," Waugh had told reporters at the Sydney Cricket Ground. "The bowlers are in their 30s and some of the batsmen are getting on as well."
After announcing Australia's 15-man Ashes squad on Wednesday, which includes only one player under 30 in all-rounder Cameron Green, Bailey dismissed Waugh's comments, saying the squad was picked on performance.
"We're aware of the age profile of the team," Bailey told reporters on the Gold Coast.
"I'm interested when people have that view as to who they would like us to leave (out). Is that Nathan Lyon and Mitch Starc out, is that just because of their age?
"You've got to give due respect that the guys are performing very well and they have the right to be selected."
Selectors dropped 20-year-old opener Sam Konstas from the squad while bringing in uncapped Jake Weatherald and recalling another 31-year-old batter in Marnus Labuschagne.
One of Weatherald or Labuschagne will partner 38-year-old opener Usman Khawaja for the five-test series against England which starts on November 21 in Perth.
Australia's bowling has been dominated by the thirty-something quartet of Starc, Lyon, Josh Hazlewood and Pat Cummins for the better part of a decade.
Bailey also confirmed that all-rounder Mitchell Marsh had been discussed as an option but did not make the cut, leaving the 34-year-old T20 skipper free to fulfil his pledge to watch the first test in his hometown Perth with beer in hand.
"We went to the ICC (International Cricket Council) and the issue there was they wouldn't let the umpires take breathalysers out onto the field," joked Bailey.
"So if he was going to be six or eight beers' deep by the time the first ball was bowled, it was going to make it tricky."