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AARP Warns Against Cutting Entitlements to Solve Budget Crises

The influential seniors’ lobby AARP issued a warning Tuesday for members of Congress and Obama administration officials looking to narrow the deficit: Don’t do it with cuts to Social Security, Medicare and Medicaid.

As lawmakers and the White House consider squeezing savings from those programs, AARP CEO Barry Rand, in a lengthy speech at the National Press Club, said his organization will work to put the emphasis on people, not balance sheets. AARP also spelled out ways it wants to strengthen what it said, based on its numerous studies and analyses, is a declining middle class — one where retirement security is becoming less of a reality.

“In Washington, their budget debate has been focused on big numbers, but it’s really about people and their futures,” Rand said. “We cannot make budget choices without considering the consequences of those choices on people. Solving the budget deficit by cutting Social Security and Medicare benefits will leave too many people with nothing left at the end of the month.”

Rand acknowledged that AARP and its approximately 38 million members, who are older than 50, agree the entitlement programs require some modifications. But he called proposals to raise the eligibility age for Medicare, the federal health insurance program for the elderly and disabled, an example of “cost shifting” that amounts to “pure folly and [is] very dangerous.” He and other AARP officials said the Democratic-backed Affordable Care Act went in the right direction.

Rand also made a pitch for Medicaid. Even though it’s considered a medical program for poor Americans, Rand said “in reality, Medicaid has a huge impact on the middle class” because it pays for about two-thirds of all the beds in nursing homes.

Rand noted that the recession, job losses, rising health care and higher education costs and other factors have forced Americans to borrow from their retirement accounts, to postpone retirement and to amass debt.

“The ranks of America’s poor are on track to climb to levels unseen in nearly half a century, erasing gains from the war on poverty in the ’60s,” he said. “These trends place even more importance on Social Security as a source of retirement income. In fact, Social Security will be the main source of retirement income for future retirees at virtually all income levels.”

He urged policymakers “to broaden the current debate in Washington from the narrow lens of deficit reduction toward the larger goal of economic growth and maintaining the health and economic security of all Americans.”

AARP also will lobby for policies that would reduce the overall health care costs in the nation as well as those that incentivize retirement savings, he noted.

But when it comes to major discussions about the future of Social Security, Rand said, AARP wants it done as a separate process, not as part of a bargain to reduce the deficit.

“We’re committed to reducing the deficit but not by putting the health and financial security of future and current generations at risk,” he said.

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