Concord Coalition Slams AARP for Abandoning “Responsible Leadership”

Last week, the Concord Coalition, a bipartisan group which advocates for responsible federal budgets and deficit reduction, attacked the AARP for a new political ad demanding that Social Security and Medicare cuts be kept off the table in the ongoing “super committee” negotiations.

While AARP’s stance might be good politics for their members, it isn’t productive for the nation as a whole or our long-term financial well-being. Any meaningful effort to control the national debt will require more than simply cutting “waste and loopholes” as AARP suggests in the same ad. The problem is far too big and these solutions much too small. It difficult to measure “waste” in government, a recent GAO report suggesting a number of policy changes that will save tens of billions of dollars annually. The national deficit for FY 2011 was 1.3 trillion. There is, of course, nothing wrong with eliminating wasteful spending or improving the tax code by closing loopholes, but structural deficits in the federal budget are so large that more painful choices will have to be made to bring deficits to a manageable level.

If recent reform proposals are any indication, policy-makers understand that it is bad politics to cut benefits for those already over 50. In other words the AARP’s membership would almost certainly be protected from any changes to Social Security or Medicare benefits. It is therefore counterproductive to simply ignore the looming financial crisis for both programs. Everyone would be prefer if current benefit levels and tax rates, but the retirement of the baby boomers in the next 20 years will make this impossible, there must be some combination of tax increase and benefit reductions because there will be more retirees entitled to collect benefits than there were in the past.

AARP should be in favor of ensuring that Medicare and Social Security are financially sound in both the short and long term. If nothing is changed the Social Security trustees predict that the OASDI trust fund will be exhausted by 2036 and the system will only have sufficient revenue to pay about 75% of scheduled benefits from that time forward. Even worse, the healthcare sector (a large chunk of which is Medicare spending) will consume nearly 20% of total GDP by 2020. That’s not 20% of the federal budget, that’s 20% of the entire United States economy. If AARP wants its present, and future, members to enjoy anything resembling the level of support currently provided by Social Security and Medicare it should be in favor of developing reasonable solutions to growing costs.

AARP is one of the most powerful lobbying organizations in the United States. They have the capacity, and expertise, to help create an effective and fair proposal to reform Social Security and Medicare for the next century.

 

This post was contributed by Ben Wilhelm