PTL: Key Seniors Association - AARP - Pivots on Benefit Cut

John Rother, AARP's policy chief, engineered the change in position.

From The Wall Street Journal:

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 decision, which AARP hasn't discussed publicly, came after a wrenching debate inside the organization. In 2005, the last time Social Security was debated, AARP led the effort to kill President George W. Bush's plan for partial privatization. AARP now has concluded that change is inevitable, and it wants to be at the table to try to minimize the pain.

AARP runs the risk of alienating both its liberal allies, who have vowed to fight any benefit cuts, and its 37 million members, many of whom are deeply opposed to such a move.

To win them over, AARP is preparing coast-to-coast town-hall meetings to explain the problem and the possible solutions.

In an early sign of its new approach, AARP declined to join a coalition of about 300 unions, women's groups and liberal advocacy organizations created to fight Social Security benefit cuts.

There are limits to how far AARP is willing to go. The group will accept cuts, but won't champion them, and it is particularly leery of certain concepts such as eliminating benefits for wealthier recipients.

It wants tax increases to fill most of the program's financial hole, and it insists that a deal must be crafted apart from broader deficit-reduction negotiations.

AARP recently launched a multimillion-dollar ad campaign to fight against making Medicare and Social Security cuts part of the broader debt talks now under way. That has reinforced the impression among many in Washington that the group is opposed to dealing on Social Security at all.

AARP is one of the most powerful lobby groups in Washington, with a big budget for TV advertising and decades of experience mobilizing its large and diverse membership to lobby their members of Congress. Last year, it had $1.4 billion in revenue, nearly half of which came from royalties on AARP-branded health-care and financial products.

In Washington, the group is best known for its influence on Social Security and Medicare, but it also has weighed in on transportation issues that affect older drivers, housing for low-income seniors and Congress's recent financial-regulatory overhaul.

Social Security, which was created in 1935, is facing a demographic challenge as the baby-boom generation retires with fewer younger workers to support it. The program's actuaries say that by 2036, the program will have exhausted its reserves and will only be able to pay 77% of promised benefits. Between now and 2036, the government, which has spent the money held in reserve, will have to borrow to meet those obligations.

Conservative and liberal experts alike believe the program can be put on a solid financial footing for 75 years, which is the standard for solvency, if lawmakers implement fairly modest changes to collect more taxes and pay fewer benefits.

Republican opposition to tax increases and Democratic opposition to benefit cuts have stymied action.

"AARP swings a lot of weight with them," said Oklahoma Republican Sen. Tom Coburn, another member of the president's deficit commission.

AARP's move was engineered by Mr. Rother, 64 years old, who has been at the center of every Social Security debate in the past three decades.

AARP is steadfast in its opposition to tackling Social Security as part of a grand budget deal—the kind currently being discussed by a group of lawmakers led by Vice President Joe Biden—saying Social Security didn't cause the current deficit and shouldn't be used to fix the problem. An AARP news release last month urged seniors to lobby their members of Congress against "political deals that cut their hard-earned benefits."

It is also determined that any deal should be bipartisan, a stance influenced by backlash to the group's support for Mr. Obama's health-care law. AARP's endorsement made a big difference in Democrats' ability to secure passage, given that the bill included a half-trillion dollars in cuts to Medicare, the federal health-care plan for seniors.

The group lost about 300,000 members as a result and came under attack from some Republicans who accused AARP of supporting the law because the group, which helps sell insurance products, benefited financially.