[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.

                          ____________________