The American Association of Retired Persons (or AARP) is the eight hundred pound gorilla of associations supposedly representing senior citizens.
In actuality, the organization is a huge fraud on seniors, profiting by commission from a variety of money making schemes, receiving millions of taxpayer dollars, and promoting programs of big government and high taxes which hurt, not help, seniors. Considering the record of the AARP, we like to call them the AARP–the Association Against Retired Persons.
AARP had an unusual origin but one that gave it a tremendous boost in members and money. In 1947, Ethel Percy Andrus, a principal, established the National Retired Teachers Association (NRTA) and, in a unique partnership with insurance executive Leonard Davis, formed AARP in 1958. Davis provided insurance policies for NRTA members, and made a personal (though highly controversial) fortune for himself in the process.
Charles R. Morris, examining the history of AARP in his book AARP: America’s Most Powerful Lobby and the Clash of Generations (New York: Random House/Time-Life Books, 1996), revealed that for much of its existence AARP was under the control of Davis thus “operating as a sales network to hawk very high-priced insurance and a host of other Davis-created products to old people.” (p. 10) A source of controversy, Davis abandoned his contacts with AARP in the early 1980s.
Clearly, Ms Andrus was well-intentioned in wanting to provide much needed, low-cost insurance to retiring teachers, and clearly her original philosophy that the AARP would seek no federal largesse is to be admired and applauded.
But somewhere down the line, probably after her tenure, the lure of the almighty dollar proved too much and AARP was under a microscope in the 1970’s and 1980’s when Mr. Davis was sent packing to Florida, with much of his, according to press reports, “$160 million fortune intact.”
But the full extent of the powerful empire built by AARP did not come to light until hearings sponsored by then U.S. Senator Alan Simpson (R-WY). The investigation of the finances of AARP provided a major bombshell in 1995.
The organization is a tax-exempt group which collects federal funds, about $86 million annually, from direct grants for such programs as tax counseling for the elderly to providing jobs for seniors under the “Senior Environmental Employment Program.” Simpson rightfully raised the question over the use of a non-profit status for a group which makes millions selling its members medicine, insurance, and other products.
Senator Simpson’s hearings shined the light on an organization which claims to represent senior citizens but in reality represents big government, helped by taxpayer subsidies.
AARP is a large money-making machine of Fortune 500 proportions. The Internal Revenue Services even looked into the AARP non-profit status and after some “negotiations” the AARP agreed to pay $135 million “in lieu of taxes” on its money-making schemes conducted between 1985-1993. An additional payment of $15 million was made in 1994. In the latter year, AARP paid the U.S. Postal Service $2.8 million to settle accusations that it improperly used its non-profit privilege. The great irony is that these payments were made to the IRS and the U.S. Postal Service (AARP caught trying to circumvent the law) at the same time the group was receiving hundreds of millions of dollars from the taxpayers over those years. AARP can operate on a low membership annual dues of $8 per member because of the profits it gets from its other activities and federal funding. In fact, the $8 is called a “loss leader item” in the world of business. It gets you in the door at a nominal amount, but profits are amassed with the products it sells you. The Wall Street Journal summed it up well in the title of an editorial (June 23, 1995) about the AARP and other groups who thrive on federal funds such as the National Council of Senior Citizens and The National Council on Aging: “Welfare for Lobbyists.”
AARP has been consistent in its efforts to promote more federal spending and bigger government. They were active promoters of the Medicare Catastrophic Coverage Act (1988) which became law; and when seniors found out the outrageous bill they were paying for this new government bonanza, their protests became so strong that Congress took the unheard of action toward a seniors program: it repealed it the next year (1989). AARP found seniors picketing their headquarters with “Down with AARP!” signs because of the organization’s support for it. (Opposition was so strong that one can still recall pictures of one of the architects of this bill, then Chairman of the House Ways and Means Committee Dan Rostenkowski, fleeing senior citizens in his solid Chicago Democratic district who chased after him in protest after a meeting in August of 1989!)
The AARP opposed a balanced budget constitutional amendment. They opposed efforts to slow down the rapid growth of Medicare, indifferent to the need of saving this program for seniors. They oppose reform of Social Security which would save the system and allow individuals to have individual retirement accounts. They consistently push for more spending on entitlement programs. They deny the Social Security system is in trouble and propose as “salvation” for the program the usual prescription of big government groups: raise taxes.
And how well do they represent their members? When President Bill Clinton proposed increasing taxation on Social Security recipients above a certain income level, the AARP was strangely silent and, instead of opposing this hardship on seniors, urged approval of a budget and tax deal which would add these taxes.
As a result of its political stance, the AARP has been losing members who protest their liberal slant but they continue an aggressive campaign of recruiting new members
(even lowering the eligibility age for membership to age 50). Their magazine, Modern Maturity, has a circulation over twenty million, making it larger than the combined circulation of some current news magazines. (Besides Modern Maturity and the AARP Bulletin, it has about seventeen separate newsletters and a large number of videos, special studies, and pamphlets aimed at targeted groups.) Still the 33 million members of AARP represents real political clout, a leverage used to promote big government, encourage more government spending, and opposing all efforts to reduce government spending, all to the detriment not only of seniors living on fixed incomes but for all taxpayers.
The irony is that most AARP members in the 50 states have only a vague notion of AARP’s political agenda which tilts decidedly to the left and most AARPites join for the aggressively hawked benefits. It’s hard to resist a sales pitch that touts AARP’s buying power based on 33 million members, until Senator Simpson’s hearings focused on the fact that not only did AARP not beat competitive insurance plans but made a tidy profit, of hundreds of millions on all the products they offer their members as “the lowest available price” thanks to an apparent purchasing power due its massive membership.
AARP has a number of state groups or affiliates assisting them in their mission. Horace Deets, an employee of over twenty years, receives a salary of $292,000 (more than the pay of members of the President’s Cabinet!) plus $46,000 in a benefits package while 19 other AARP executives receive over $100,000 each. At the latest count, the AARP headquarters office had a staff of 1,752 which can be averaged to about 3.27 “lobbyists” for each member of Congress. (There are an additional 500 technical employees in Hartford, Connecticut, who exclusively process auto claims for AARP.)
Are all seniors groups out for big government and taxpayer funds? Not so.
The 60 Plus Association stands for free enterprise, less government and less taxes for seniors and neither takes nor seeks federal grant money. We have been called by one source “an increasingly influential lobbying group for the elderly…often viewed as the conservative alternative to the American Association of Retired Persons (AARP).”
Taxpayers –and especially senior citizens — must realize that the AARP does not represent the best interest of people but serves as a mouthpiece for those forces pushing for expanded government. Nonprofit organizations with their own political agenda of liberalism which receive federal funds should not be subsidized by taxpayers for lobbying. President Thomas Jefferson said it so well: “To compel a man to furnish funds for the propagation of ideas he disbelieves and abhors, is sinful and tyrannical.” It is time an aroused electorate put a stop to this abuse.