AARP plays small ball: Group is missing the big-picture issues

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The policies of the senior citizens interest group AARP are shortsighted and work against the long -term interests of its current and future members.

AARP is focusing on the relatively small issue of preserving the existing inflation factor used when calculating the annual Social Security increase. Instead, they should spend political capital solving two far greater financial threats facing seniors: Medicare funding and a future debt crisis.

STABILIZING SOCIAL Security for the long term is relatively simple. A combination of reducing future cost-of-living adjustments (COLAs), raising the retirement age, increasing the wage base limit and means testing will make Social Security solvent for decades.

But the greater financial threat for seniors is Medicare, and solutions for that are extremely difficult. Making Medicare financially sound will require reducing the cost structure and changing delivery of health care, not just who pays. Inevitably, seniors’ finances will be affected far more by necessary Medicare changes than Social Security COLAs.

Another future cataclysm for seniors, and the entire country, are the repercussions from a debt crisis. At some point, our profligate borrowing will cause the financial markets to lose faith in the federal government, and interest rates will escalate dramatically. To pay this increased interest on federal borrowing, tax rates will be forced up and spending on Medicare, Medicaid and all federal programs will be forced down.

But AARP is oblivious to a debt crisis. They treat the deficit as not their problem. But with nearly 40 percent of federal spending going to Social Security and Medicare, the deficit is seniors’ problem. We seniors cannot be held immune from the difficult steps needed to reduce the deficit. By insisting on no benefit changes, AARP increases the likelihood of a crippling debt crisis, and also adds to the immense debt burden we place on our children and grandchildren.

LET’S COMPARE the situation for working-age Americans with Social Security beneficiaries. First, monthly Social Security checks are guaranteed. The checks were never at risk during the recession, and remain secure now and in the near future. Not only that, but in the past two years the monthly payment has increased by 5.5 percent.

Tens of millions of employed, underemployed and unemployed Americans would love to have guaranteed, lifetime income with periodic increases. But AARP whines that future increases may be reduced. For example, the 5.5 percent increase would have been a 5 percent increase under the proposed inflation formula, the chained Cost Price Index.

By spending so much of their political capital on a smaller issue rather than the huge problems, AARP is playing small ball.

In some cases, Social Security checks alone are inadequate to keep seniors out of poverty. That is not justification to increase everyone’s Social Security payment. Other government programs help the poor. Social Security is not a welfare program.

AARP SENDS frequent letters and emails to its members proclaiming that seniors’ finances
will be devastated if the COLA is fractionally reduced. We are asked to sign the enclosed petitions to send to politicians in Washington, D.C. Hopefully politicians recognize the emotional language used to frighten seniors into signing these petitions. The petitions should be disregarded accordingly.

AARP needs to shift from intransigence to compromise to improve their credibility and effectiveness. AARP cries wolf too often, and must better focus on the most damaging issues to its members.

(The writer is a retired U.S. Navy officer. He lives and writes in Savannah.)

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DanK 04/07/13 - 05:15 am
Let's not penalize the middle class

It's nice to hear from a retired Naval Officer. Retired naval officers do not rely on Social Security or Medicare. The retirement benefits for officers who have put in their years of service is quite substantial -- significantly more than what middle class Americans receive from Social Security. And Tricare is quite different from Medicare. Would you be so eager to cut your own retirement benefits? Can I interest you in relying on Social Security rather than the big pension you are receiving?

Here's the facts that AARP recognizes and you must have missed. Social Security is not a welfare program, it is an insurance program. Every working person has been coerced into paying into this insurance program for their entire working life. Every working person should receive back from the program at least as much as they paid into it.

I, for one, know that I am very unlikely to receive that much over the span of my retired life, unless I live to be more than 100 -- which is very unlikely. By my calculation, assuming that I live to the same age as my father and grandfather, I'll receive around 80% of what I paid into Social Security. And that's assuming that the cost of living increases actually keep pace with inflation, which has not always been the case.

Means testing would accomplish two things.

(1) It would further reduce the payout retirees receive from Social Security. The means test would penalize the middle class who have paid into the system their entire life.

(2) The means test would reduce incentives for workers to save, invest in other retirement programs, and work during retirement years in order to have a more comfortable retirement, because it penalizes additional sources of retirement income.

Means testing converts Social Security from an insurance program that functions as one portion of retirement income, into a welfare program separate from work contributions by disincentivizing efforts to increase one's wealth and livelihood.

Changes to the way in which the cost of living increases are calculated further penalizes middle class Americans by further reducing their lifetime benefit. As a result they receive an even smaller amount of what they paid into the system.

By coercing working Americans into paying for this insurance program, working people have not been able to contribute as much into private retirement services as they would have otherwise. It is unconscionable to now begin penalizing those same working Americans just because the federal government mismanaged the program.

Finally, as to Medicare, once again, working Americans have been forced to pay into this system for their entire working life. 1.8% of every paycheck went to pay for Medicare. The amount of money I paid into this system during my working life was quite substantial. As it is, the elderly pay increasingly high out-of-pocket expenses for healthcare. Moreover, it is increasingly difficult for the elderly to find doctors and specialty medical services that will accept Medicare patients.

Cutting Medicare would abandon more elderly Americans after they spent a lifetime paying for this program.

AARP is correct in defending the programs. It is just plain morally wrong to penalize the elderly who were coerced into these programs that were intended to support them in their old age.

Entitlement? You're darn right! They are entitled to every dime they receive! I'm going to be there soon enough, and I want the benefits I paid for!

You want to reduce the debt.? Quit paying for all these stupid wars. Stop sending billions of dollars to corrupt dictators. Get out of the business of war and policing the world. Reduce the military to home protection forces and demand that Europe defend themselves. How about letting the retired military rely on Social Security and Medicare just like the rest of the country?

Put people to work at home. Invest in research, science, technology, education and healthcare -- the things that make the lives of Americans better and our country stronger.

Don't take it out on the elderly. They paid their way. They earned their benefits.

Truth Matters
Truth Matters 04/07/13 - 06:04 am

Borrowing from the late Roger Ebert, I give you "Two thumbs up."
When you pay into a program as SS/Medicare that takes it out of the Entitlement category as other programs. Few have made that point as cogently as you did here.

Bodhisattva 04/07/13 - 06:33 am
Revenue as percent of GDP:

Corporate taxes- 4.1%
Payroll taxes- 2.8%
Income taxes- 7.8%
Excise taxes- 2.3%

Corporate taxes- 1.5%
Payroll taxes- 5.4%
Income taxes- 7.5%
Excise taxes- 0.5%

allhans 04/07/13 - 11:26 am
Be careful with those numbers

Be careful with those numbers from the year 2012..they might do as so many others and make a drastic change by next month..
Seems those in charge do whatever it takes....

alinchron 04/07/13 - 02:30 pm
Winless wars and foreign aid

Well said, DanK--particularly the part about wasting $$$ on winless wars and foreign aid!

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