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.)