[Congressional Record Volume 140, Number 40 (Thursday, April 14, 1994)]
[Senate]
[Page S]
From the Congressional Record Online through the Government Printing Office [www.gpo.gov]
[Congressional Record: April 14, 1994]
From the Congressional Record Online via GPO Access [wais.access.gpo.gov]
THE AMERICAN ASSOCIATION OF RETIRED PERSONS
Mr. SIMPSON. Madam President, I spoke during the past session on some
very deep concerns that I have had regarding the AARP, the American
Association of Retired Persons.
As I stated, the AARP is one enormously influential organization in
our society. I wanted to make all persons, especially AARP members
themselves, aware of just what kind of organization AARP actually is. I
did that. It was rather politically harrowing, I might add, telling
that they have in their coffers $37 million listed as ``yield'' on
their investments, which would make one wonder that the principal must
be quite tight if you have a $37 million yield; the fact that they
receive 3 percent of the premium from every single policy they place
with Prudential Life Insurance, or RV insurance, or any other insurance
that they have; the fact that they are 33 million strong paying $8.
All you have to do is be 50 years old and regardless of your net
worth or your income, you are joined together in a common bond with
those who love airline discounts, automobile discounts, hotel
discounts, and free VISA cards. And that is the AARP.
They do good things, and they do things which in my mind are not so
good, such as killing off the balanced budget amendment which was
worked on so diligently by our colleague from Illinois, our colleague
in the chair, sharing her Senate tenure with that remarkable friend of
ours, Senator Paul Simon, who worked doggedly on that issue.
You will recall the AARP rose, rose from wherever they rise from, and
smoked the legislation on the basis I think that every person on Social
Security in America will lose $1,122--I mean they had it right down to
the nub and 50 cents, whatever it was--if the balanced budget amendment
passed. I thought that was egregious. I shall continue to think it.
They also receive an $80 million grant from the Federal Government
that I have still been unable to find out exactly what it is or why it
is, more importantly, when they have the yield on investments of $37
million.
I am trying to find out what the salaries of their members are. I
have not been able to determine that--the salaries of their officers. I
hope I will receive that.
I visited with John Roberts. I find him a delightful gentleman. He is
pleasant enough man. He is committed. He is sharp. He is dedicated. So
we are going to visit to see where we are going because I think it is
wrong that all of us seem to cower in the trenches here when the AARP
rises from wherever they rise. They have a huge legal network. They pay
out a great deal on legal fees. There was at one time a retainer paid
to the law firm of the original originators of the AARP. I think that
is now just a normal--whatever that is; payment to attorneys; quite a
battery of those. I visited with the counsel--a very pleasant,
articulate, and very bright person.
So I intend to visit with them. I do not intend to come to the floor
because I realize the political hazards entailed in this kind of work.
I want to look into their manual. It is said that if their field people
do not concur with the orders and instructions from the national
office, they are subject to being sacked, dismissed. I would like to
know a little bit more about that.
I would like to know how it is they can tell their membership that
what we need in this country is long-term health care for everyone in
America regardless of their net worth or their income which would bring
this country to its knees fiscally. It cannot be. Means testing is
apparently a horrid expression to them. I am going to call it
``affluence testing'' from now on, and we will see where we go from
there as we use the phrase ``affluence testing,'' which is a phrase
used by our good former colleague, Senator Paul Tsongas of
Massachusetts and Senator Warren Rudman of New Hampshire; as they
worked diligently with the Concord Coalition group to see if we could
bring some sense into the entitlements issue and the issue of, again,
affluence testing.
So I have had some good mail from the AARP members, and a majority of
it is very supportive from AARP members, saying, believe it or not, ``I
agree with you. I am in it just for the discounts. That is what I am
doing, and that is what I am up to. I like the cards, the insurance,
the RV insurance.'' I do not have any argument with that at all. I am a
member of the AARP, and their magazine is a stirring magazine; it looks
like the Smithsonian magazine. It is a very interesting magazine, and
it has some dazzling advertising in it. It has some of the sleekest
looking gray-haired cats you have ever seen playing golf, tennis, and
it talks about cruises and things to do. It is pretty, we would say in
Wyoming.
Yet, the editorial comment is a continual reference to what the
Congress is doing to senior citizens, regardless of their net worth or
income. I think that is wrong, and I think we need to look into that,
and I hope there will be colleagues on the floor who will jump off the
cliff with me into the stygian pits of despair when we get to taking
them on. I want to find out more things, and we will.
I am sure others in the audience, or others who are listening on the
floor, will wonder with me, what is the purpose of the AARP receiving
$80 million in a grant from the Federal Government? The best I have
been able to find up to this point is that it is used to assist senior
citizens, and somehow it is best used by the AARP because of their
ability to reach senior citizens. We have all sorts of things to reach
senior citizens through the Government, without going to private
organizations. We have the Rolling Meals; we have the senior programs,
senior citizens programs; the green thumb program, and we have all
sorts of programs. So I have not yet been able to find out what the $80
million is for. I do think that an organization that has that much dues
income--all you do is multiply 33 million by 8, and that ought to give
anybody an idea that there is enough petty cash lying around to serve a
lot of different forces. That is what we hope to find out.
There was an article in Money magazine, I believe, some years ago,
that said that the cash flow through the AARP in nine different
businesses--remember what they are in: Pharmacy, insurance, RV,
Scudder--I have not found out what is all involved in the premiums and
brokerage fees they receive. They have investment funds, and the cash
flow is $9 billion a year through the agencies of the AARP. That does
not mean they make that. It just means that that is the kind of flow
that goes between 33 million members and the various things that they
operate at a very high intensity level.
Nevertheless, so often people write to me and say that there is some
poor beleaguered emaciated soul that has the political--it is not
courage at all; it may be political ignorance--to take on such a
powerful force as the AARP and criticize its propaganda and money-
making business machine, but I am just ornery enough to be that one.
In addition, in the past, I have been very vocal in my discontent
with another senior citizen group, the National Committee to Preserve
Social Security and Medicare. This group almost single-handedly
perpetuated the notch baby issue with the ramblings about the terrible
inequity toward persons who happened to be born within the notch years.
In the past, the national committee had been the only fairly well-known
organization pushing for notch legislation, because they believed the
notch babies were not receiving their rightful due, and the legislation
is critically needed to provide them with additional benefits.
This entire issue is based on the perception that legislation enacted
in 1977 somehow unfairly reduced benefits for people born within a 5 to
10 year period after 1916. The clear problem was that many of those
persons who were retiring in the late 1970's and early 1980's, those
born in 1915 and 1916, received higher benefits than was ever intended.
The notch babies who came after, in later years, actually received an
actuarially correct amount. What is more eye-popping is to take a good
look at what persons born in those notch years actually have paid into
the Social Security System over their working lives.
Hear this: As a 20-year-old in 1937, the maximum amount a worker
contributed to the system was $30 a year. That comes out to $2.50 a
month.
In 1945, that amount was still $30 per year, as to what people were
paying into the Social Security System.
In 1957, 3 years after I was married, the maximum was $84 per year.
In 1967, $234 per year. This is maximum stuff.
In 1977, as a 60-year-old worker, $722 per year.
In 1992, these persons who had made an ``average wage'' and retired
at age 65 received $797 per month in Social Security benefits.
Does anyone need a computer? Does anyone need to know where our
problems lie? I hope the entitlements commission--of which I am very
proud to be a member, as the President appointed me to that--will
seriously present to the American people this remarkable set of
statistics. That does not mean we are going to go out chopping people
up, but it means at some point in time, you have to have some
relationship with what you paid in and what you get out, even if you
take the base, put compound interest on it. And, yes, I have heard the
old story that had we invested it ourselves and not given it to you
slobs, it would have worked, and we could have done it. Add all that in
there, too.
I have a form I take to town meetings, and it costs 29 cents. You
send it to Social Security, and they show you what you put in, what you
are going to get out. I say, ``If you still feel you are getting
cheated, write me after you get the material back.'' I have never heard
from anybody, not a soul. How could they? I got mine back. In 1945, my
first job at Cody bakery, I put in $5. Then I worked at the B4 ranch
and put in $7. I really got ripped that year. And then the army did not
do any. And then as a self-employed lawyer, $300 a year and $400 a
year. They really stuck me one year for $1,500. My wife, Ann, is a very
wonderful woman, a homemaker, businesswoman and mother, and all things,
a very hardworking woman, who taught and earned money. The two of us,
when we role into our 65th year, will be picking about $1,100 or $1,300
a month out of the system.
And that is the biggest year I ever remember before I ever got here,
and I pay the maximum, which I suppose now is about $3,300 a year and
will go up to $3,500. I will get that all back in 2 months. That is
where we are.
Nobody listens, and I cannot believe that these groups have the
desire to just leave their children and grandchildren just wallowing in
nothing, regardless of their net worth or their income, and I will be
visited by free spirits in the middle of the night probably tonight and
there they will be clinking the tin cup giving me the business. And I
am not talking about poor people. I am not talking about people who dug
ditches. I am not talking about poor guys who never made over 20 grand
a year. They are in this system and they should be in this system and
the replacement weight of their wages is weighted to take better care
of them than it is for the rich who should never forget that is our
obligation. It is not to people who are earning $70,000 in retirement
and are receiving a COLA, a cost-of-living allowance when they have
40,000, 50,000, 60,000, 70,000 bucks coming to them a year in
retirement income whether earned or unearned.
What is really even more eye-opening is to then compare this amount
that I just gave as to what they are receiving $797 a month in 1992,
for a guy who made an average wage, retired at 65, but compare that
with what today's worker pays. Today's worker is paying into the Social
Security System in 1993, working persons paid a maximum of $3,225 per
year into Social Security. That is only for Social Security. It does
not include what persons contributed for Medicare or what they pay in
income tax, and you have a situation right now in America where young
people are paying more in Social Security tax than they are paying in
income tax. That has never happened in this country. It is happening
all day every day.
And I do so admire Leon Panetta and Dr. Alice Rivlin who placed in
the President's budget a full paragraph, more than a paragraph of
detailed information on generational analysis that shows that unless
these things are corrected and unless we do something with Medicare and
Medicaid, pensions, Social Security, COLA's, all the rest, that in the
year 2035 people will be paying 82 percent of their income in to take
care of themselves through the system. I do not think many people will
sit still for that.
Those are things that we must address and the National Committee for
the Preservation of Social Security and Medicare now probably remains
as the last lone hysterical voice on notch reform legislation. Since
they have discovered that this issue also generates sufficient heat and
indignation and possibly indigestion and it keeps those donations
nicely flowing into their outfit. I have visited with their people. I
admire them. I enjoy them. I said, why don't you quit talking about
notch babies since this is the phoniest issue that has ever confronted
us, and they say we will, but they do not because I get their mail and
they are still doing it. And so ``notch reform'' has been kept alive. I
think they are wholly irresponsible on this issue, and I have never
hesitated to bring this to their attention as well as to the public's
attention. The folks with the committee have told me time and time
again that they have left the notch issue ``behind them'' and are
focusing now on the budget deficit and health care reform. At the
present time, they are finding it very difficult to get Congress'
attention on the notch reform with the problems of the budget. In the
meantime, seniors continue to send additional contributions from their
meager pensions to the committee so they may line their own coffers and
continue their ``good works.'' The committee's mailings and ``alerts''
contain misleading and distorted statements about the budget bill, the
Social Security trust fund. That is always the one: ``You guys steal
it. You know you stole it all.'' We did not steal a nickel of it. It
all has to be invested in Federal securities and federally backed
securities. And they talk about cuts in Medicaid. One statement
contained in a recent mailing, even ricochets off the wall to state
that, ``The Congress has pulled some last minute, closed door deals--
deals that actually bring the Social Security trust funds back into the
budget * * * If entitlement spending exceeds the budget, Congress can
then go looking anywhere in entitlements to pay for the overspending *
* * and they are going to be looking at the Social Security trust
funds.'' This is absolutely not true. During the budget deliberations
this past summer Congress never attempted to meddle with the Social
Security trust funds. It has never been healthy to even think of doing
that. We tried one night doing that in 1987 and went for 24 hours, and
we sealed that hole and never tapped into it again but you never know
that when you get out and read the material from this group. It is one
more stamp of how the national committee twists the facts.
With regard to the balanced budget amendment, the committee's latest
legislative alert states that, ``The balanced budget amendment requires
that the total expenditures of the Federal Government not exceed total
receipts or revenues. The problem for seniors is that ``revenues'' or
``receipts'' include the funds the Government takes in for specific
purposes--and this includes Social Security trust fund dollars. It
allows the Government to officially use the Social Security trust funds
moneys to reduce the deficit.'' The legislative alert goes on to note
that, ``* * * If Social Security is back on the budget, there will be
intense pressure on Congress to resist benefit improvements, such as
cost-of-living adjustments, so that the huge Social Security surplus is
maintained for deficit reduction purposes.'' The committee then urges
members to contact their Senators and Representatives to tell them that
the Social Security trust funds should not be used to balance the
budget, and they are not and they never were and they never will.
The type of propaganda currently being churned out by the national
committee through communications to their membership is intentionally
confusing and diverts attention from the real issues which lawmakers
face in trying to balance the budget. As an integral part of the
Federal budget, Social Security certainly darn sure does have an impact
on the budget and should be directly linked to the budget deficit
problem. Simply put, the budget deficit--and the national debt of 4
trillion, 500 billion--yes, that is the figure--is a terrible threat to
our entire Nation's financial stability and security. All Federal
programs and all Americans must participate in some way in helping to
reduce the budget deficit. It is no more sinister or mysterious and no
less real than that. The deficit is caused by unrestrained Federal
spending and a deep part of this spending is tied directly into
entitlement programs such as Social Security, Medicare, civilian and
military pensions, veterans' benefits, railroad retirement, and
unemployment compensation. Does anyone want to step up and take on some
of those? The one thing that all of these programs have in common is
that they are not subject in any way to the scrutiny of the annual
appropriations process. Spending for these programs occurs
``automatically''--regardless of a person's net worth or income--
without any action or review by Congress. In short, entitlements
represent uncontrolled Government spending. That is the essence of our
most serious national problem.
With the enormous amount of funds that are concentrated in Social
Security and other entitlement programs, one can understand the need to
include these programs in any real and significant effort to reduce the
horrid budget deficit. But, it is surely not an easy task when every
time I turn around, someone says, ``I'm all for helping to reduce the
horrid budget deficits, but don't do anything to my favorite program.''
Or the other good one is, ``We are ready to do something if everybody
else will,'' and they know everybody else will not so they know they
are off the hook on that. Unfortunately, that kind of an attitude,
which the national committee loves to perpetuate, only further
compounds the difficulty of lowering the deficit.
No one in Washington is asking senior citizens to bear the brunt of
deficit reduction. But they, too, have to be part of the ``mix'' if we
are to achieve any honest deficit reduction. What we are asking all the
American people to do--and I surely include seniors in this--is to save
for our future so your Federal Government is not forced to borrow more
and plunge the American people--that is called their children and
grandchildren--ever deeper into the black hole of decline.
That is what groups like the National Committee, with their scare
tactics and propaganda machines, are forcing us to do. We simply cannot
stand back and watch groups like the National Committee and the AARP
let their dramatic and draconian charges go unanswered. They are going
to have to be examined very carefully: Their income, what they do, what
they invest; and we have to know it all. And I intend to do that.
So, in conclusion and finally, both the National Committee and the
AARP have been blatantly misleading seniors on the decreases in
Medicare spending contained in the Clinton budget package.
And I will conclude. Listen to this.
Once again, the reduction in Medicare spending by $55.8 billion--that
is what was in there--has been classified as a ``spending cut'' by the
National Committee. These are not cuts. We cannot continue to allow
groups like the AARP and the National Committee and other ``senior
spokesmen'' to sell our country's senior citizens a bill of goods on
that stuff. The fiscal year 1992 increase in Medicare spending was 14
percent. The fiscal year 1993 increase is estimated to be 10.9 percent.
So they are not ``cuts.'' We are simply not going to allow the program
to go up as fast as it has in past years. When a 9- or 10-percent
increase--instead of a 13- or 14-percent increase--is described as a
``cut'', someone is not telling the truth, because increases are not
cuts.
I want to emphasize, I have not the slightest desire to ``muzzle''
the National Committee or any other interest group, or the AARP or the
Gray Panthers or the Pink Panthers. Let them rip and snort. That is
America. All I want is for them to tell the truth. I always say that
``everyone is entitled to their own opinion, but no one is entitled to
their own facts.'' I happen to believe that is a pretty good rule to
follow. In fact, if I could get the National Committee to do only one
thing, it would be stick with the facts and tell the truth. I sure will
not hold my breath waiting for the National Committee to adopt such a
policy, but I will continue to keep my eyes peeled on all of their
future activities.
I hope some of my colleagues will join me as we review the material
they thunder in upon us.
Well, I have taken too much time. I appreciate the generosity of the
occupant of the chair.
If the majority leader is available for whatever may be necessary, I
think at this point a quorum call would be appropriate. So I suggest
the absence of a quorum.
The PRESIDING OFFICER. The absence of a quorum has been suggested.
The clerk will call the roll.
The bill clerk proceeded to call the roll.
Mr. MITCHELL. Madam President, I ask unanimous consent that the order
for the quorum call be rescinded.
The PRESIDING OFFICER. Without objection, it is so ordered.
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