AARP Under the Congressional Microscope…Again

AARP Under the Congressional Microscope…Again

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The House Ways and Means Committee has launched an investigation into the financial underpinnings of 40-million-member AARP, the largest lobbying organization for older Americans in the nation’s capital. It’s the first time Congress has put a single group under its microscope since 1995, when the Republican-controlled Senate Finance Committee last investigated AARP, according to committee spokesman Jim Billimoria.

Rep. Wally Herger, R-Calif., chairman of the health subcommittee, and Rep. Charles Boustany, R-La., chairman of the oversight committee, accused AARP of using its lobbying clout to advance the interests of its insurance arm, which sells policies to supplement Medicare coverage. The April 1 hearing “is about getting to the bottom of how AARP’s financial interests affect their self-stated mission of enhancing senior’s quality of life,” the chairmen said in a prepared statement. “It is important to better understand how AARP’s insurance business overlaps with its advocacy efforts and whether such overlap is appropriate.”

AARP, which was a major backer of the health care reform law that President Obama signed into law a year ago, welcomed the scrutiny. In a statement posted on its website, the group said “AARP has a long-standing and good working relationship with Congress and we look forward to appearing before the committee on behalf of our millions of members, and the entire 50+ population. . . AARP is committed to transparency.”

Liberals will no doubt say that the hearing marks an escalation in the conservative assault on non-profit institutions that are perceived to back their causes. (Full disclosure: I am a member of AARP.) Republican governors in the Midwest, led by Scott Walker of Wisconsin, have used state budget crises to attack collective bargaining rights of public employees, which are mainstays of local and state Democratic parties in that region. A conservative media outlet recently launched a sting operation against National Public Radio, whose leadership resigned after a doctored version of private conversations allegedly making fun of the Tea Party made national news.

Some political analysts questioned the wisdom of attacking AARP. Though seniors as a group shifted to the right in the last election after Republican candidates hammered away at a reform law for its alleged cuts to Medicare (supporters call them efficiencies), AARP remains the top lobbying group defending the program. It has consistently pushed for expanding its benefits over the years, and polling shows seniors strongly opposed to any cuts in either that program or Social Security, which AARP also defends.

“This strikes me as a fool’s errand,” said William Galston, a senior fellow at the Brookings Institution and a long-time political observer in the nation’s capital. He noted that attacking AARP eliminates any chance Congress will take up cost-saving reforms of entitlement programs like Social Security and Medicare in this session of Congress. “Poking a hornet’s nest probably isn’t a good idea unless you have a pretty good protective suit. Is this what they really want to do? There aren’t even any proposals on the table yet.”

AARP is one of the largest and most successful non-profit organizations in the world. The group reported on its website $293 million in insurance-related revenue in its $1.1 billion budget in 2009, the last year for which data is available from Internal Revenue Service filings. The group’s president that year, long-time Washington lobbyist William Novelli, earned $1.6 million in salary and benefits. Another 16 employees earned over $300,000 a year, according to the group’s 2008 IRS filing.

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spent 25 years as a foreign correspondent, economics writer and investigative business reporter for the Chicago Tribune and other publications. He is the author of the 2004 book, The $800 Million Pill: The Truth Behind the Cost of New Drugs.