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AARP flexes political muscle in debt talks

WASHINGTON -- AARP, the lobbying powerhouse for older Americans, last year made a dramatic concession. Amid a national debate over whether to overhaul Social Security, the group said for the first time it was open to cuts in benefits.

The backlash from AARP members and liberal groups that oppose changes in the program was enormous -- and this time around, as Washington debates how to tame the ballooning federal debt, AARP is flatly opposed to any benefit reductions for the nation's retirees.

AARP's rejection of any significant changes to the nation's safety net could be a major factor as policymakers seek a deal to put the government's finances in order through raising taxes and cutting spending on federal programs, possibly including popular entitlements such as Medicare and Social Security.

Republicans say scaling back Social Security and Medicare, the largest drivers of future government deficits, is necessary. President Barack Obama has previously been open to benefit cuts.

But for lawmakers who would have to vote for such changes, AARP's 37 million members and $1.3 billion budget are a force to be reckoned with. Over the past eight months, AARP has sponsored a series of candidate debates, run television ads, circulated questionnaires and held more than 4,000 meetings around the country to mobilize its legion of supporters to oppose any cuts.

Under the slogan "You've earned a say," the group has been building opposition to entitlement changes. A recent poll by the organization found that 70 percent of Americans 50 and older think Medicare and Social Security shouldn't be part of the upcoming fiscal debate.

"We're fighting to stop cuts to Medicare and Medicaid that will hurt beneficiaries," said AARP's top lobbyist, Nancy LeaMond. "We want to ensure that Social Security is not part of this deficit discussion."

Leading bipartisan proposals to reduce the federal debt have proposed changes to entitlement programs, including raising the Medicare eligibility age from 65 to 67 and adopting a stingier formula to determine Social Security payments. Both proposals were discussed during secret negotiations between Obama and House Speaker John Boehner, R-Ohio, in the summer 2011 during efforts to resolve the country's debt ceiling crisis. Those talks collapsed without a final agreement. But many political observers expect the proposals to surface again as Democrats and Republicans try to reach a deal over averting the "fiscal cliff " -- the government spending cuts and tax increases set to kick in at the beginning of next year.

AARP opposes raising the age for Medicare eligibility on the grounds that it would increase costs for younger seniors while driving up premium costs for older ones. The group opposes efforts to shrink Social Security cost-of-living increases, which it says would cost older seniors thousands of dollars a year in benefits.

AARP's critics say it is looking out for current retirees at the expense of future generations.

"We've been stealing money from our children, and one of the main reasons that we've been unable to stop is that AARP is so opposed to any change to the entitlement programs and they're politically powerful," said Kevin A. Hassett, an economist at the American Enterprise Institute.

But AARP argues that it is protecting benefits vital to both current retirees and younger Americans. With the demise of guaranteed pensions in the workplace and the inability of many workers to save enough for retirement, Social Security and Medicare are increasingly indispensable.

"You have people in their 40s and 50s who are cascading toward a terrible retirement," said Eric Kingson, a Syracuse University professor who co-chairs Strengthen Social Security, a coalition that has joined AARP, organized labor and others in opposing any benefit cuts in the program.

AARP and others say the recent economic downturn has made it even more urgent to protect entitlements. Households with adults approaching retirement have median retirement savings of $120,000, about the same as 2007, according to the Center for Retirement Research at Boston College. But balances for younger workers have shrunk, meaning that more that half of all Americans could see their standard of living decline once they retire, the center said.

A recent issue of the AARP Bulletin -- the largest circulation magazine in the world, sent to all its members -- warned seniors that the proposed change to Social Security previously embraced by Obama and Republicans could cost "a potential cumulative loss of thousands of dollars." The organization followed that with a letter to all members of Congress cautioning against Social Security changes.

Dozens of Democratic senators are vowing to protect Social Security -- including Sen. Majority Leader Harry Reid, D-Nev., who has said any changes to the program should not be considered as part of the upcoming debate over the fiscal cliff.