An Arithmetic Lesson for AARP
Our friends at AARP are out with their newest ad campaign regarding Medicare today, and it contains much of the same rhetoric as its earlier commercials. The focus on cutting wasteful spending and loopholes echoes a June advertisement that won the not-so-coveted Four Pinocchios from the Washington Post: “The AARP ad perpetuates the worst stereotypes about how easy it would be to balance the budget. At a time when the nation’s fiscal crisis—amid the looming retirement of the baby-boom generation—demands informed and reasoned debate, the AARP misinforms its members about the choices the nation faces.”
This misleading rhetoric is perhaps not surprising, given that it comes from an organization that supported a measure (i.e., Obamacare) that diverted more than $500 billion in Medicare savings – not to ensure the solvency of the Medicare program, but to create more new and unsustainable entitlements that “would not enhance the ability of the government to pay for future Medicare benefits.” (In fact, AARP reportedly INSISTED that it would support Medicare reductions in Obamacare “only if the money goes to expanding coverage,” rather than improving Medicare’s fiscal sustainability.)
The new twist is in the language of the AARP ad – “I paid into my Medicare” – that attempts to perpetuate the myth that seniors are only receiving entitlement benefits they paid for. But a December AP story – posted on AARP’s own website – demonstrates that is NOT the case. In fact, the title says it all: “What You Pay for Medicare Won’t Cover Your Costs.” The AP story quoted an Urban Institute study about the entitlement benefits and taxes recipients will receive (and pay) over their lifetimes. The study found that a senior with average wages retiring this year will have paid $87,000 in Medicare taxes – but will receive over $250,000 in Medicare benefits.
The fact that seniors retiring this year will receive nearly three times as much in Medicare benefits as they paid in Medicare taxes shows that the AARP-peddled line that “I paid into Medicare” is a myth, and that our entitlements are fundamentally unsustainable and in desperate need of reform. Yet the AARP ad campaign once again focuses on cutting waste and loopholes – as if that’s all that’s needed to solve Medicare’s $38 trillion in unfunded liabilities. Quoting again from the Post in June: “The choice is not between shrimp treadmills and Medicare; the question is how growth in the big entitlement programs can be restrained to accommodate the baby-boom generation without harming the elderly already receiving benefits.” Or, as the current occupant of the White House might say, that’s not class warfare. That’s math.