June 17, 2011

AARP 360 Over Social Security Phase Out

June 17, 2011. Washington. The nation’s largest senior citizen group went on a rollercoaster ride today and appeared to settle back down exactly where it started. The morning began when news rapidly spread throughout the national media that the powerful lobbying organization had switched its position on the future of America’s Social Security program. By this afternoon, the group was forced to make a national announcement stating that the news reports were wrong. Their position on the future of Social Security benefits for the nations’ seniors had not changed.

While most news outlets struggle to make sense of today’s happenings, its not surprising that reporters, and seniors alike, are a little confused. From the desks of this publication, it appears that the day’s early-morning reports were right, and wrong. Try to follow.

When the Wall Street Journal published its shocking story this morning titled, ‘Key Seniors Association Pivots on Benefits Cut’, the story seemed to sail right under the radar. When readers sampled the first paragraph of the story however, it became immediately clear that this was the story of the day.

‘AARP, the powerful lobbying group for older Americans, is dropping its longstanding opposition to cutting Social Security benefits, a move that could rock Washington's debate over how to revamp the nation's entitlement programs’ the WSJ story began. The article went on to quote AARP policy director John Rother saying, “The ship was sailing. I wanted to be at the wheel when that happens". The story goes on to call Rother ‘a prime mover behind the change of heart’ at AARP. The following line adds even more credibility to the policy turn-around, ‘The shift, which has been vetted by AARP's board is now the group's stance’. If the Wall Street Journal reports it, it must be true.

Within minutes, newspapers and media outlets nationwide were reporting the shocking betrayal of America’s senior citizens by the population’s most trusted advocate. Even the New York Times published the headline, ‘AARP is Open to Future Cuts of Social Security Benefits’. The Times also quoted John Rother saying, “Our goal is to limit any changes in benefits. But we also want to see the system made solvent”. The article further quotes Rother, “You have to look at all the tradeoffs. And what we’re trying to do is engage the American public in that debate”.

Immediately, outrage swarmed Capital Hill as Congressmen from both Parties quaked at the thought of legions of ‘Gray Panthers’ storming their gates like they did during the 1980’s. Within hours, AARP’s CEO himself, A. Barry Rand, ordered the following statement be released and posted on AARP’s website:

“Let me be clear – AARP is as committed as we’ve ever been to fighting to protect Social Security for today’s seniors and strengthening it for future generations.  Contrary to the misleading characterization in a recent media story, AARP has not changed its position on Social Security.

“First, we are currently fighting some proposals in Washington to cut Social Security to reduce a deficit it did not cause.  Social Security should not be used as a piggy bank to solve the nation’s deficit.  Any changes to this lifeline program should happen in a separate, broader discussion and make retirement more secure for future generations, not less.

“Our focus has always been on the human impact of changes, not just the budget tables.  Which is why, as we have done numerous times over the last several decades, AARP is engaging our volunteer Board to evaluate any proposed changes to Social Security to determine how each might – individually or in different combinations – impact the lives of current and future retirees given the constantly changing economic realities they face.

“Second, we have maintained for years – to our members, the media and elected officials – that long term solvency is key to protecting and strengthening Social Security for all generations, and we have urged elected officials in Washington to address the program’s long-term challenges in a way that’s fair for all generations.

“It has long been AARP’s policy that Social Security should be strengthened to provide adequate benefits and that it is sufficiently financed to ensure solvency with a stable trust fund for the next 75 years.  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 strongly opposed a privatization plan in 2005, and continues to oppose this approach, because it would eliminate the guarantee that Social Security provides and reduce benefits, and we are currently fighting proposals to cut Social Security to pay the nation’s bills.

“Social Security is a critically important issue for our members, their families and Americans of all ages, especially at a time when many will have less retirement security than previous generations with fewer pensions, less savings and rising health care costs.  And, as we have been for decades, we will continue to protect this bedrock of lifetime financial security for all generations of Americans.”

Unlike during the Reagan administration when AARP stood shoulder to shoulder with America’s seniors, and also unlike the Bush administration’s senior drug overhaul where AARP sided with US pharmaceutical companies over their own members, this time it appears AARP is trying to play both sides. AARP’s CEO insists that the organization’s policy concerning the reduction or elimination of Social Security benefits hasn’t changed one bit. That’s true. Their policy director’s statements saying that the AARP is open to the reduction or elimination of social security benefits, is also true.

Upon closer inspection of AARP’s policy, the group makes a bit of a distraction by screaming that their number one request that Congress not use the Social Security Trust Fund to make up for poor budgeting elsewhere. AARP correctly points out that Social Security didn’t cause any of the Nation’s debt or deficit. They also restate their request that Social Security be made solvent for future generations.

The following AARP statement explains what their CEO says is consistent with their position, but Americans hear as a flip-flop:

“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.”

To the American people, it sounds like an exact replica of Republican Congressman Paul Ryan’s failed attempt to phase out Medicare, 'just not for current or near term beneficiaries'. Specifically, AARP notes the ’75 year’ solvency idea. That particular idea would guarantee all or at least some Social Security benefits for the next 75 years. The proposal has gained traction in Congress since all the Americans who would be shafted by the change haven’t even been born yet. The discussion has taken a serious tone since last year when the Trust Fund began paying out more money than it was taking in.

Another possible reason for the outrage of America’s seniors may have been the tone of the original Wall Street Journal article. Citing numerous examples of why AARP’s position shift is the right course of action, the paper appeared to be celebrating and describing it as a done deal, now that the seniors' only defender had switched sides and joined the Republican policy makers currently trying to slash entitlement programs rather than raise taxes.

Sadly, the debate may be over and this was America’s unchoreographed wake-up call. AARP’s Board has reportedly already discussed the matter, and begrudgingly, sided with Mr. Rother’s analysis that there are no alternatives other than drastic and immediate program cuts. The WSJ article explains Mr. Rother’s argument to the more-than-resistant Board of Directors, of which he is also a member.

‘His argument: Tax increases wouldn't be enough to make the program solvent. The leading proposal for raising taxes—increasing the amount of income subject to payroll taxes, the central financing mechanism for the program—would fill less than half the hole.’ the WSJ reported.

The main problem, as we see it from the editorial desk here at Whiteout Press, is more easily understood than fixed. In fact, AARP may be right and the most beloved and successful safety-net program in America may be unfixable.

The whole problem can be summed up with one simple explanation – generations of Congressmen of both Parties, together with the Treasury Department, simply took the money, spent it, and never put it back. Arguably, the entire process happening repeatedly over decades, is illegal. But when the US Constitution gives responsibility for making laws to Congress (the Legislative Branch) and the responsibility for enforcing laws to the White House (the Executive Branch), what are the American people to do when both branches of government are the perpetrators? The Constitution makes no provision for the third and final branch of government, the Judicial Branch and their courts, to form a posse and arrest the criminals.

With the American media keeping their secret, the practice went on for generations. The fact is, the 1935 Social Security Act specifically demands that the trillions of dollars that the whole of the American people were entrusting to a handful of men in Washington, MUST be deposited into an actual, physical bank account. It MUST be held completely separate from the rest of the Nation’s finances. And it must NEVER be used for anything other than its intended purpose. Based on the genius safeguards of the Act, Social Security should have been the most profitable program in government and the Social Security Trust Fund should never become insolvent.

Read the words of the 1935 Social Security Act and decide for yourself what happened:

“Section 201. (a) There is hereby created an account in the Treasury of the United States to be known as the Old-Age Reserve Account hereinafter in this title called the Account. There is hereby authorized to be appropriated to the Account for each fiscal year, beginning with the fiscal year ending June 30, 1937, an amount sufficient as an annual premium to provide for the payments required under this title”.

Now, 74 years later, we’re slowing finding out that none of that actually happened.

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