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Why AARP’s Support for Social Security Cuts Matters

7:21 am in Uncategorized by Daniel Marans

(image: Dean Mougianis)

People are basically divided into two camps on the news that AARP has endorsed Social Security cuts. One thinks it’s a big deal, the other not so much. I’ve spent some time over the course of the Netroots Nation convention in Minneapolis explaining to the latter camp why it is in fact a big deal.

Much of the divergence of opinion hinges on what one makes of AARP’s attempts at damage control. After AARP’s policy director, John Rother, told the Wall Street Journal on Friday that they were open to cutting Social Security benefits, AARP issued a clarification supposedly “denying” that this was true. Or at least that’s how most people interpreted it. “Oh, don’t worry, that was a gaffe. AARP has clarified for the record that it’s not true.”

A closer look at AARP’s damage control statement, entitled “AARP Has Not Changed Its Position on Social Security,” reveals it to be a non-denial. The press release basically said that Rother’s remarks were non-news because they have favored a “balanced” Social Security reform package—ie one that includes cuts—for years. They use the language of many groups advocating cuts, emphasizing that “changes” won’t affect current beneficiaries. “It has also been a long held position that any changes would be phased in slowly, over time, and would not affect any current or near term beneficiaries,” AARP CEO A. Barry Rand, said in the press release.

In a follow-up interview, AARP director of legislative policy said, “Our policy for decades has always been that we basically support a package that would include revenue enhancements and benefit adjustments to get Social Security to long-term solvency. That has been our policy stated over and over again for, I mean, literally it has to be two decades, now.”

While some people were surprised to hear that AARP has supported cuts for decades, most of us knew that they have long relished the opportunity to be the inside dealmaker. AARP has also drawn scrutiny for its conflict of interest in taking certain political positions. When AARP came out in support of the 2003 Medicare Modernization Act, many criticized the organization for endorsing a bill that forced millions to pay more for drugs, and subsidized private plans—of which AARP was a provider. The allegations were investigated by the House of Representatives’ Ways and Means Committee.

That’s why AARP’s damage control did little to dampen the significance of Rother’s leak to the Wall Street Journal. It wasn’t the content of Rother’s remarks to the Wall Street Journal that had progressives up in arms. It was, as Roger Hickey has pointed out, the timing.

If AARP was so intent on keeping Social Security out of deficit discussions, then why signal their willingness to make a deal now, in the midst of the debt-ceiling negotiations, when reform would undoubtedly have to be part of a deficit deal—or at least be made in the context of Washington’s deficit hysteria? Whether it was AARP or Rother acting alone, the effect of declaring openness to Social Security to cuts was to give their politically powerful imprimatur to Washington to put Social Security back on the table.

And the political fallout is already beginning to take effect. No sooner had AARP made its announcement then leading Wall Street-funded groups used the political headwinds to call on Congress to act on a “balanced” Social Security reform deal. First it was the centrist Democratic group Third Way, which, chaired by Wall Street executives, has come under fire in the past for conflating Social Security with the deficit, and recommending massive Social Security cuts. Then it was the Peterson-funded Moment of Truth Project, co-chaired by Fiscal Commission co-chair Alan Simpson, whose disparaging remarks and severe recommendations about Social Security have earned him criticism from all sides.

That those influential groups are making political hay of AARP’s revelation is just the first sign that AARP has helped open the floodgates to Social Security cuts.

Unfortunately, it is hard to believe that this was a naive mistake and not a deliberate chess move. AARP has a habit of inserting itself into the debate at crucial junctures. Rother did virtually the same thing, in the same newspaper, back in August when the Fiscal Commission was developing its recommendations, which included cuts to Social Security that made the 1983 reforms look paltry by comparison.

Many progressive groups have turned their attention to defending Medicare and Medicaid as the terms of raising the debt-ceiling come to a head. Since the Ryan budget omitted recommending direct changes to Social Security, it has receded as a major focus of the left’s energy.

In truth, threats to Social Security—be it an extension of the payroll tax cut, or the chained CPI COLA reduction—while less public, have always remained on the table.

Now that AARP’s support for cuts has brought Social Security back to the fore of the deficit reduction talks in a more public way, progressives should adjust their focus accordingly.

Disclaimer: The views expressed in this article are those of the author, and in no way reflect the views of Social Security Works or the Strengthen Social Security Campaign.

The Importance Of Being Alan: A Response To Alan Simpson’s Conservative Defenders

12:02 pm in Uncategorized by Daniel Marans

Simpson Bowles - Caricature

Simpson Bowles - Caricature by DonkeyHotey, on Flickr"

 

Try as they might, conservatives cannot rescue Fiscal Commission Co-Chair Alan Simpson from self-marginalization. But while Simpson’s revealing gaffes remain a welcome political gift for opponents of Social Security and Medicare cuts, his staying power in elite policymaking circles only attests to the sad and distorted state of our nation’s fiscal debate—and the powerlessness of mainstream America within that discussion. That Simpson was probably the most prominent Republican President Obama could find to chair the Commission, is just the latest sign of how Democrats have had to define “moderate” down to slightly-left-of-nutjob.

Charles Blahous, a conservative Social Security expert, and public trustee of the Social Security trust funds, tries to undo the damage done to the Fiscal Commission’s credibility by Ryan Grim’s conversation with Fiscal Commission Co-Chair Alan Simpson. While some of the points he makes are valid, all fail to restore confidence in Simpson as a prominent voice on Social Security policy, or the fairness of the process by which the Fiscal Commission developed its recommendations.

Here’s the rundown. Grim found Simpson cursing out AARP, calling Social Security a “Ponzi scheme,” and claiming that life expectancy was 63 when Social Security was created at an event hosted by the Investment Company Institute, a financial industry trade group.

Grim caught up with Simpson and challenged him on the life expectancy statistics. It turns out, Grim noted, that according to the Social Security Trustees, life expectancy if you reached age 65 was 79.7 years for women and 77.7 years from men. Overall life expectancy was lower because of high infant and childhood mortality rates that medical advances have since been largely eliminated. Contrary to Simpson’s implied argument that Social Security was intended to cover very few people, the life expectancy statistics at age 65 confirmed that it served a very real segment of the population.

Simpson responded with confident disbelief, saying, “Just because a guy gets to be 65, he’s gonna live to be 77? Hell, that’s my genre. That’s not true.”

Chuck Blahous defends Simpson, claiming that Simpson was clearly confusing life expectancy at any age with life expectancy at age 65. In any event, Blahous argues, Simpson’s point stands that overall increases in life expectancy have made Social Security’s finances unsustainable. Simpson’s statement does not discredit the Bowles-Simpson [Fiscal Commission] recommendations, because the “Commission” used SSA’s estimates of both kinds of life expectancy, regardless of what Simpson said. Finally, the ongoing 1983 increase in the normal retirement age from 65 to 67, Blahous says, does not account for the full increases in life expectancy

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