One Nation under AARP: The Fight over Medicare, Social Security, and America's Future

One Nation under AARP

One Nation under AARP

The Fight over Medicare, Social Security,

and America’s Future

Frederick R. Lynch

University of California Press, one of the most distinguished university presses in the United States, enriches lives around the world by advancing scholarship in the humanities, social sciences, and natural sciences. Its activities are supported by the UC Press Foundation and by philanthropic contributions from individuals and institutions. For more information, visit www.ucpress.edu.

University of California Press

Berkeley and Los Angeles, California

University of California Press, Ltd.

London, England

© 2011 by Frederick R. Lynch

Library of Congress Cataloging-in-Publication Data

Lynch, Frederick R.

One nation under AARP : the fight over medicare, social security, and America’s future / Frederick R. Lynch.

    p.   cm.

Includes bibliographical references and index.

ISBN 978-0-520-25653-8 (cloth : alk. paper)

ISBN 978-0-520-26828-9 (pbk. : alk. paper)

1. Senior power—United States.    2. Older people—Political activity—United States.    3. Baby boom generation—United States.    4. American Association of Retired Persons. I. Title.

HQ1064.U5L94     2011

306.3′80973—dc22                                                                      2010037306

Manufactured in the United States of America

19    18    17    16    15    14    13    12    11

10     9     8     7     6    5    4      3   2     1

This book is printed on Cascades Enviro 100, a 100% post consumer waste, recycled, de-inked fiber. FSC recycled certified and processed chlorine free. It is acid free, Ecologo certified, and manufactured by BioGas energy.

Once again:

For my sister, Peg

And the memory of our parents

CONTENTS

Acknowledgments

Introduction: Not Going Quietly

1. Boomer Basics: Generation, Culture, Demographics

2. Old Age in a New Society

3. Boomers’ Senior Power Potential: From Social Protest to Self-Preservation

4. Crash Landing for a Self-Critical Generation

5. Not Your Father’s AARP: Bill Novelli Builds a New Boomer Brand

6. AARP Turns Fifty: The Battle for Health Care Reform

7. You Can’t Always Get What You Want: Me, We, or AARP?

Appendix: Methodological Odyssey

Notes

Index

ACKNOWLEDGMENTS

Many thanks to stalwart friends and colleagues Gary Jason, Jack Pitney, Jan Allard, Monica Morris, David Sadava, Bill Frey, Ralph Rossum, Joe Cardoza, Jonathan Tilove, and a very special colleague and pal, the late Judith Merkle. I very much appreciate Greg O’Neill, H. R. Rick Moody, Bob Binstock, and Rob Hudson welcoming me into the ranks of gerontologists. John Rother and many others at AARP were extremely generous with time and insights.

My editor at UC Press, Naomi Schneider, was wonderfully supportive in reading numerous chapter drafts and, above all, extremely patient in providing generous deadline extensions to incorporate the unpredictable, unfolding developments of 2008 and 2010 that have proved so crucial in the saga of aging boomers, AARP, and the coming entitlement battles. Elisabeth Magnus was a tireless, sharp-eyed copy editor. My literary agent, Jill Marsal, facilitated my getting together with UC Press. I’ve also been aided by able student assistants, Matt Horwitz, Alison Strother, and Reed MacPhail.

I am grateful for several grants sustaining the research over the years. More than a decade ago, the Sarah Scaife Foundation provided valuable seed money for this research, as did the Earhart Foundation. More recently, I was aided by several smaller grants from Claremont McKenna College research institutes, including the Benjamin Z. Gould Center, the Berger Institute for the Study of Work, Family, and Children, and the Office of the Dean of Faculty.

Former Claremont McKenna College president Jack Stark, current president Pamela B. Gann, deans Anthony Fucaloro, Jerry Garris, and Gregory Hess, and Government Department chair Ralph Rossum provided academic sanctuary for a politically incorrect sociologist. And a special salute to Jonathan Knight, former director of the American Association of University Professors’ Office of Academic Freedom, Tenure and Governance—whose legal acumen and blunt e-mails helped ensure that sanctuary finally became tenure.

Portions of chapters 2 through 4 appeared in abbreviated form in Political Power and the Baby Boomers in editor Robert Hudson’s The New Politics of Old Age Policy, 2nd ed., © The Johns Hopkins University Press. Expanded and updated reprinting with permission of The Johns Hopkins University Press.

Quotation of the television interview of Bill Clinton by Charlie Rose is by permission of The Charlie Rose Show.

Quotation of David Walker and a listener on the Diane Rehm Show is by permission of National Public Radio’s The Diane Rehm Show from WAMU-FM in Washington, D.C.

Introduction

Not Going Quietly

It wasn’t like, Here’s the political thing, here’s the cultural thing. It was all woven together in the same sort of rebellious rock and roll attitude. When you said rock and roll, you didn’t mean just the music. You meant it as a way of life, as a coat of armor against everything that was coming at you. It was a force to be reckoned with.

—Michael Moore (2007)

We honored our part of the bargain. We are counting on the amounts reported to us on our Social Security forms. If this contract is broken, there will be hell to pay from a generation that knows how to organize and inflict political pain.

—Letter to the editor, Washington Post (August 20, 2002)

On an October Friday night in 2006, the rock band Splash!—whose members were in their twenties and thirties—loudly belted out hits of the 1960s and 1970s. Most of the four hundred or so people listening and dancing to the music were in their fifties and early sixties—aging baby boomers who did not necessarily think of themselves or their music as golden oldies. Yet this musical happening at California’s Anaheim Convention Center was hosted by AARP, part of a three-day Life @ 50+ megaconference that drew twenty-five thousand registered attendees.

The Anaheim megaconference would be one of the smoothest, most successful—and certainly the most star-studded—of these annual events, which had begun with a mere six thousand attendees at the first Life @ 50+ gathering in Dallas in 2001. And, befitting the Disneyland slogan of the happiest place on earth, the 2006 event may have been the most upbeat and carefree of all such gatherings before and since. Under the blue skies and golden California sun, the 2000–2002 Dot-Com Crash had become a dim memory, while the gathering thunderclouds of the coming real estate meltdown, stock market crash, and Great Recession were still not yet on the horizon.

A primary purpose of these entertainment-and-merchandizing extravaganzas is to demonstrate to fifty-plus boomers that the nation’s largest senior citizen lobby is no longer their parents’ AARP. A rebranded forty-million-member AARP is actively recruiting seventy-eight million graying baby boomers (born 1946–64). The mating dance of these organizational and generational giants has enormous implications for the nation’s political future. Just under half the voters in the 2008 and 2010 elections were over age fifty; approximately half of those voters were also members of AARP, the nation’s fourth-highest-spending lobbying organization from 1998 to 2009. Not since the heyday of America’s industrial unions has there been such a potential concentration of member-based organizational clout. And this development remains completely unstudied.

The relatively few books about boomers chronicle their contentious past. This one is about their even more problematic economic, political, and sociological future. Boomers will not go gently into that good night. As young adults, an educated boomer vanguard wrought considerable political and social change. Forty years later, boomers are again politically restive. Historic real estate and stock market declines have made large numbers of them economically vulnerable just as they approach voluntary (or forced) retirement and old age. As a group, aging boomers are not financially prepared for retirement and old age; they are going to be more dependent upon Medicare and Social Security than they’d ever assumed. They are also politically and culturally vulnerable; they are not well liked; as a generation they are often self-critical and apologetic: stereotypes abound.

Long postponed, an epic political fight over changes in Medicare and Social Security is being forced by the ballooning national debt. If aging boomers are to protect these entitlements, they will need leaders, friends, and allies. The most likely all-in-one candidate is AARP.

One Nation under AARP examines three key issues. First, there is the question of boomers’ senior power potential. Are aging boomers a sleeping political giant? The steep stock market and real estate declines, followed by the Great Recession, raised boomers’ age awareness and retirement anxieties. Threatened cutbacks in pensions, Social Security, and Medicare could produce a higher degree of age and generational consciousness, activating latent senior power in the form of a boomer voting bloc or more organized political movements. The onset of any such mobilization, I think, is more likely among Older Boomers (born during 1946–55) than Younger Boomers (born during 1956–64), because the former are closest to retirement and most economically vulnerable. Older Boomers, therefore, are the primary focus of this book.

Highly educated Older Boomers have an activist heritage: they were the backbone of the 1960s protest movements. If fading Golden Years visions are further threatened by cutbacks in Medicare, Social Security, and also public and private pensions, it is reasonable to assume that the generation that knows how to organize and inflict political pain might revive its activist heritage with the modern organizational tools of the Web and the Internet—but only if aging boomers can overcome their trademark do your own thing culture of individualism, competitiveness, and mistrust of government, as well as their deep demographic and political divides.

The relationship between seventy-eight million aging boomers and the forty-million-member AARP is a second major focus of this book. AARP (which shed its older title of American Association of Retired Persons because more than half of its members are not retired) must necessarily stimulate boomers’ age awareness to entice them into becoming members and purchasing AARP’s products and services. Though they generally take care to avoid labeling boomers as such, AARP nonetheless is flooding boomers’ mailboxes—and raising their consciousness—about both the vulnerabilities and positive potential of senior citizenship.

Yet AARP’s leaders are reluctant to champion a boomer-centric politics that might prove polarizing or unpredictable or, worse, might reinforce critics’ AARP stereotype as the greedy geezers’ political lobby. Instead, under the leadership of the former CEO Bill Novelli and the current leader A. Barry Rand, a more inclusively inclined AARP is more likely to broker aging boomers’ interests, balancing them with those of other groups as the giant organization expands its mission of broader societal change for everyone who has a birthday. AARP is increasingly studying the needs and desires of the next generation of senior citizens—now in their thirties and forties. More cynical AARP watchers suspect that the organization’s drive to maximize membership, sell insurance, and provide other services trumps its willingness to take bold political stands. Liberals have long been frustrated by AARP’s refusal to lobby for a single-payer, Canadian-style health care system; conversely, conservatives have always suspected AARP’s leaders are liberals bent on furthering socialized medicine.

Thus the third issue examined extensively throughout One Nation under AARP is how aging boomers and AARP are negotiating an increasingly competitive, globalized supercapitalism, major demographic changes, and the rise of a Post-American World. Both boomers and AARP were created in the mid-twentieth-century era of the nation-state and a strong sense of national unity, trust, and civic ties forged by World War II and sustained by a thirty-year cold war. But the growth of global supercapitalism with its unpredictable economic crises, mass migrations, and the rise of new economic powers such as China and India herald greater international influence, integration, and regulation.¹

The 2008 presidential elections revealed that responses to globalization and other issues are strongly structured by a deep societal divide marked by class, education, and culture. On the one hand, millions of older middle- and working-class Americans feel economically threatened by globalization—especially those without college degrees who reside in regions affected by overseas outsourcing and/or high immigration levels. Indeed, blue-collar workers (especially men) have been hardest hit in the current recession. They tend to be patriotic nationalists and look to the nation-state for both economic and military protection.

On the other hand, the nation’s political, economic, and cultural elites, as well as many members of its highly educated professional and managerial classes, embrace the new international post-American order. Many of the nation’s top leaders are also considered members of a New Global Elite—as portrayed in a special double issue of Newsweek in late 2008.² First and foremost on the Newsweek global elite roster was President Barack Obama, who has many times referred to himself as a citizen of the world. This label resonates well with an Obama core campaign constituency of younger, more ethnically diverse Americans. Indeed, the pollster John Zogby characterizes younger Americans as the First Global Generation who defer less to American values . . . and see themselves as citizens of the planet, not of any nation in particular.³

The advent of a new global order poses a fundamental dilemma for national entitlements that the nation’s elites and the general public have refused to recognize: Social Security, Medicare, and other old-age entitlements are based on the sociological and cultural foundation of the nation-state. But national borders, the emotionally based sense of identity, loyalty, national community, the intergenerational compact, and the spirit of E Pluribus Unum risk erosion through supercapitalism, rising inequality, mass immigration, multiculturalism, increased international work and travel, the Internet and World Wide Web, and decreasing involvement with local groups, civic associations, and communities.⁴

The absence of leadership and a functioning national group to discuss such matters troubles National Public Radio commentator Dick Meyer and many others. He complains that in a fragmented, balkanized America, "What is missing is a leadership or inspiration across groups. By definition, there cannot be a leader without a functioning group of followers. There is no functioning national group in America today."⁵

AARP wants to answer this call, to both lead and build a national forum to address issues of generational equity in a changing world. To do so, AARP has been changing itself and broadening its mission. For the past decade, it has conducted an organizational makeover. The initial, primary goal of this brand enhancement has been to attract and retain large numbers of reluctantly aging baby boomers.

ROMANCING THE BOOMERS

The organizers of AARP’s annual Life @ 50+ conferences realize that the best route to boomers’ wallets, hearts, and minds is through the music and popular culture of their youth. At the 2006 Anaheim Life @ 50+ megaconference, Splash! provided classic rock and pop at the largest of AARP’s Studio 50+ Nightclubs. Two other smaller ballrooms featured songs from Motown’s 1960s heyday and another blared Latin fusion. Earlier in the day the convention amphitheater was packed to watch a well-preserved Raquel Welch (age sixty-five) discuss secrets for remaining youthful. At other times, Dan Rather and Connie Chung talked about news and current events. Maya Angelou read poetry. The actress Ruby Dee discussed civil rights. The comedienne Joan Rivers interviewed conference goers. Bill Cosby and Jose Feliciano provided Friday evening entertainment. And Saturday night was more than all right for Elton John, who performed for a sold-out crowd of ten thousand people.

Yet beneath the three-day festival of nostalgia, music, dancing, and upbeat lectures were grim reminders of a new era of generational angst: the forever young generation cannot stop the clock. Boomers are becoming increasingly vulnerable to health and financial setbacks.

A competitive, optimistic, fiercely individualistic generation is pondering aging and mortality. Big Chill moments multiply. This is the cruelty of middle age, observed New York Times columnist Judith Warner. I find: just when things have gotten good—really, really, consistently good—I have become aware that they will end.⁶

Two of the Fab Four Beatles are long deceased—as are several other famous singers from the rock-and-roll era. Those who survive and continue to perform are looking their age. Advertisements for medical services and pharmaceuticals proliferate. Boomers are experimenting with new funeral formats.

The powerful and wealthy are not immune. Bill Clinton, typified as the first boomer president, has had heart bypass surgery and wears a hearing aid. The second boomer president, George W. Bush, famously compulsive about fitness and exercise, nonetheless discovered he must undergo colonoscopies every three years because of the discovery of suspicious polyps. Tony Snow, Bush’s youthful-looking press secretary, very publicly fought and ultimately lost a battle with colon cancer at age fifty-three. Snow died just weeks before Tim Russert, the popular television host of NBC’s Meet the Press, dropped dead of a heart attack at age fifty-eight. And the pace and number of famous boomer mortalities would quicken daily, indeed, hourly.

Rank-and-file boomers were also encountering more medical tests, paying higher copayments for more prescription drugs, and coping with swiftly rising health insurance premiums. Even before the 2008 precipitous declines in the stock market and residential real estate, many boomers had saved very little for their retirement years. Millions of boomer sandwich families felt squeezed by trying simultaneously to save for retirement, to pay their kids’ college tuition, and perhaps also to care for aging parents. The latter activity offers some troubling premonitions. While lovingly caring for her elderly mother, a single, childless boomer paused to ponder the likely loneliness of her own latter years in a much-read AARP My Generation magazine article: Who Will Be ‘Me’ for Me?⁷

AARP knows all this. Through dozens of surveys and hundreds of focus groups, no other organization has so thoroughly researched and studied the boomers. No other institution is as attuned to their preferences and future needs. Indeed, AARP anchors a proliferating services complex of medical, nonprofit, commercial, and government agencies geared to aging Americans. They have a rich and growing target. A 2006 Focalyst survey of thirty thousand Americans over the age of forty-two (half of all Americans) found that they control more than 90 percent of the nation’s wealth, spend $3 trillion annually, and cast more than half of the votes in the 2004 national elections. (Indeed, according to CNN exit polls, voters over age forty constituted 64 percent of the 2008 national electorate.)⁸

The expanding supermarket of products and services for aging Americans was on display in the four hundred exhibits filling the Anaheim Convention Center’s cavernous Exhibition Hall. The sprawling AARP Pavilion dominated the entrance. Its booths featured AARP insurance partnerships: AARP Medicare Supplemental Insurance and AARP Pharmacy Services (both administered by United Health Care), AARP Auto/Home Insurance (Hartford Insurance), AARP Life Insurance (New York Life), AARP Long-Term Care Insurance (MetLife), and AARP Mobile Home Insurance (Foremost). AARP Financial Services offered a Visa card (through First USA Bank) and new mutual funds designed for low- and middle-income investors (managed by State Street Bank). Other booths showcased AARP’s nonprofit activities: AARP Community Service Leadership, AARP Foundation, the AARP Advocacy Bus (which toured the nation promoting AARP’s issues), AARP Grassroots and Elections, the Voices of Civil Rights Project, and AARP’s National Retired Teachers Association. Corporate America was there. Anheuser Busch, Home Depot, United Health Group, and Walgreens were the event’s platinum sponsors. Professional associations provided information about hospice and about chronic conditions such as alcoholism, Alzheimer’s disease, heart disease, and macular degeneration. The American Cancer Society offered an especially graphic experience: a large, walk-through plastic replica of a human colon (with tumors).

Conventioneers mingled around the booths sponsored by the two largest government entitlement programs, the Centers for Medicare and Medicaid and the Social Security Administration. But the information provided there gave no indication that these popular, taken-for-granted programs constitute the financial and political time bombs of the twenty-first century. Seventy-eight million aging baby boomers will severely test the fiscal futures of Social Security and, especially, Medicare.

BOOMERS’ SENIOR POWER POTENTIAL

Boomers’ sheer numbers have been their source of power, impact, and identity. As they age, their generational clout may be magnified further by accrued wealth and political power. In 1999, Age Power author Ken Dychtwald predicted that boomers would continue the nation’s trend toward economic and political gerontocracy. But how cohesive and well organized is this gerontocracy?⁹

Time magazine cover story reporter Daniel Okrent more darkly prophesied that the size of the boomer generation and the tendency of the elderly to vote in greater percentages than any other age will converge to create a daunting political force . . . a gerontocracy of such unity and might that it will either utterly dominate the American political map or promote all-out generational warfare.¹⁰ Former U.S. commerce secretary Peter Peterson, currently chairman of the powerful Blackstone investment firm and author of Gray Dawn and other demographic doomsday scenarios, has long prophesied that boomers’ demands on Social Security and Medicare will mortgage the fiscal futures of their children. (His message is now amplified by the new Peter G. Peterson Foundation.)¹¹

Aging boomers’ senior power potential will depend upon whether age and generational identity transcend other social divisions. As with many other large groups, cohesive political action may fragment along the lines of class, ethnicity, gender, region, and religion. As mentioned in the previous section, class and education divide boomers and other Americans in their responses to globalization, multiculturalism, and changing demographics. This wine-track/beer track fault line among boomers—along with potent negative stereotypes of each group—widened during the 2008 presidential election and was especially visible in the Democratic primaries.

Boomers’ senior power potential also depends upon two basic social psychological processes that facilitate mobilization and social movement formation. First, preexisting or socially constructed consensus among potential movement members on basic values, attitudes, and norms facilitates communication, interaction, and cohesion. Boomers’ values and ideology emphasize individualism, competitiveness, and mistrust of major institutions (including government); this clearly inhibits large-scale collective mobilization. There is greater potential for mobilization with regard to a second variable fostering collective behavior: convergence upon similar economic interests, especially when reinforced by shared background characteristics—such as similarities in age, race, gender, and religion.¹²

Nothing unites a group like an external threat—especially one magnified by a major crisis. Thus the deep 2007–10 so-called Great Recession has forced recognition among boomers that a majority of them are financially at risk for their old age—at least 40 percent of them were financially ill prepared for retirement before the real estate and market meltdowns of 2008.¹³

Into this atmosphere of crisis and doubt, the new Obama White House and heavily Democratic Congress injected another political controversy: major health care/ Medicare reform. Voters over age fifty were the most opposed to this narrowly successful legislation. Controversial health care reform, rising public and private levels of debt, and bailouts of corporations by the government were, evidently, precipitating events for significant numbers of anxious or threatened Older Boomers via the still fluid Tea Party movement. Indeed, economic strain and turmoil combined with record-low levels of trust are classic sociological conditions that give rise to political or social protest movements.¹⁴ A more direct catalyst or precipitating event for activating boomers’ senior power—and a possible alliance with AARP—would be serious White House or congressional proposals to change Social Security or Medicare.

In Boom!, his 1960s retrospective, the veteran NBC anchor Tom Brokaw suggested that boomers should be willing to delay or forego some entitlement benefits.¹⁵ More recently, Michael Kinsley proposed in an Atlantic magazine cover story that aging boomers should subject themselves to a new, low-threshold inheritance tax to reduce the national debt burden for younger generations.¹⁶ But George Anders, a Pulitzer Prize–winning health care reporter for the Wall Street Journal, suggested a more likely response to entitlement cutbacks or demands for generational atonement. Boomers, he told me, have a habit of saying ‘no’ to ‘no.’ ¹⁷

The arguments for and against boomer power (age-based consciousness with potential for expression as a voting bloc or political movement) are a dialectical, ongoing theme throughout this book.

Social Insecurity and the Risk-Shift Dilemma

For nearly fifty years, Social Security reform constituted the third rail of American politics. By the year 2000, however, high-level worries about aging boomers’ impact upon entitlements were penetrating public discussion via a series of books, beginning with Peter Peterson’s grim projections in Gray Dawn (1999) and a later book Running on Empty (2004). Other examinations of pending demographic-economic crises include Laurence J. Kotlikoff and Scott Burns’s The Coming Generational Storm (2004), Alice M. Rivlin and Joseph Antos’s Restoring Fiscal Sanity (2007), James Schulz and Robert Binstock’s Aging Nation (2006), and Andrew L. Yarrow’s Forgive Us Our Debts (2008).¹⁸

Thus, when Kathleen Case-Kirschling became the first baby boomer eligible to apply for Social Security on October 15, 2007, in a special ceremony at the Washington Press Club, the event was portrayed with gallows humor by the Washington Post’s Dana Milbank: "When it comes to the nation’s finances, Kathleen Casey-Kirschling is Public Enemy No. 1. Her offense: being born. Specifically, being born on Jan. 1, 1946, just a tick after