- The Washington Times - Saturday, April 30, 2005

One group, more than any other in America, bears primary responsibility for the developing financial crisis of Social Security — the AARP.

For four decades, the AARP has claimed to represent seniors. In its leadership role, this political behemoth ($20 million spent annually on lobbyists) is responsible for every major policy action on Social Security since the early 1960s.

AARP should be excoriated for enabling and creating the Social Security financial problems for which they now claim to have solutions. Unfortunately, AARP’s “solutions” are the very same bad policies that turned Social Security into a massive ticking debt bomb — tax increases, benefit cuts for millions of future retirees and continued spending of every cent of the Social Security Trust Fund.

Here’s the short list of how AARP specifically put America’s future generations in financial jeopardy:

Eighteen payroll tax increases: AARP’s repeated support for Social Security payroll tax increases has been devastating because (1) they hit working families hardest, (2) they actually suppress job and economic growth by slamming small businesses with higher costs, and (3) they perpetuate the illusion Social Security’s solution lies in American taxpayers giving government more of their hard-earned money.

Double taxes on seniors’ Social Security: Today some 16 million people over age 65 actually pay taxes on the Social Security benefits they worked to receive. In 1983 and 1984, AARP could have easily killed this tax, but instead enabled the fleecing of tens of millions of taxpayers way into the future.

Worse, the double tax was raised in 1993. Again, AARP could have stopped it but didn’t. Many seniors now pay higher tax rates on their Social Security benefits than many millionaires.

Perpetuating the pay-as-you-go scheme: In 1950, 16 workers supported each retiree under Social Security. That ratio plummeted over the next five decades under AARP’s watch. Today about three workers support each retiree; when our grandchildren are in their late 40s, there will only be two workers supporting each retiree.

This system is destined to cause untold distress for tens of millions of families. AARP has known the problem was growing and deepened the crisis.

Raiding the trust fund: Most Americans now know there is no money in the Social Security Trust Fund. For four decades, AARP has enabled unelected bureaucrats in Washington to treat the Social Security Fund as a sort of “slush fund.”

AARP has fought to keep this mountain of debt growing because it benefits financially from federal spending. In just the last 16 years, AARP appears to have taken more than $1 billion in federal grants. Why does an organization of 35 million members need federal funding?

Imagine for a moment if AARP had made the best interests of future generations their focus in 1983. Instead of helping enact multiple payroll tax increases, double taxes on Social Security benefits, arbitrary cuts in future benefits by raising the retirement age, and other benefit cuts, AARP could have supported ownership of Personal Retirement Accounts. What would have happened?

(1) American workers and their families would now own more than $7 trillion of personal wealth in their Personal Retirement Accounts and retirees would be protected.

(2) Retirees would have received better returns than promised — but not possible — under Social Security.

(3) The raid on the Social Security Trust Fund would have stopped.

(4) Finally, not far in the future we would begin paying off all Social Security debt and moving toward the largest U.S. tax cut ever. What a contrast with what AARP actually produced.

Instead of helping create nest eggs, AARP created mountains of debt. Instead of increasing investment and retirement choices, they created dependency. Instead of lowering taxes, it helped engineer one punitive tax increase after another.

AARP created the current problems with Social Security, and what it calls “solutions” will end up bankrupting us.


Charlie Jarvis is USANext.org chairman and chief executive.

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