Bush plan will face potent foe
The largest senior lobby opposes changing Social Security to allow private accounts.
WASHINGTON — Bill Novelli doesn't like headlines that frame the debate over Social Security as a "clash of titans" - his own 35.6 million-member AARP, of which he is CEO, versus the Bush administration. He says President Bush has done a "very good thing" by putting Social Security on the national agenda.
But as the Democratic Party still finds its way in a world of larger Republican majorities in Congress and a second Bush term in the White House, the nation's largest lobby group for senior citizens has become the de facto leader in the battle to preserve what it considers essential elements of the program.
As the Bush White House and key Republican leaders discuss the twin goals of ensuring Social Security's long-term solvency and promoting the concept of an "ownership society" by allowing workers to put some of their payroll taxes into personal or private accounts, the plan that AARP is developing may end up being the lead alternative.
"We are not interested in confrontation with any party or any administration. We are interested in cooperation," Mr. Novelli told reporters at a Monitor breakfast Monday. "But having said that, we are dead set against carving private accounts out of Social Security money, and this is our No. 1 legislative agenda."
The AARP can back up such assertive language with a membership that, over the years, has put fear in the hearts of politicians of both parties - and backs up its views by voting in large numbers.
Two years ago, the AARP was a key administration ally in the battle to add a prescription-drug benefit to Medicare, a program that so far has not proved popular with seniors. So the AARP has an added incentive to fight the administration on Social Security, analysts say.
"Large numbers of [AARP] members saw working with the White House on the prescription-drug bill that came out as the equivalent of sleeping with the enemy," says Norman Ornstein, a resident scholar at the American Enterprise Institute in Washington. "They were willing to leave them in place through one transgression, but they would be tarred, feathered, and ridden out of town on rails if they did it a second time."
Still, Mr. Ornstein agrees, it is highly likely the AARP would have opposed the administration's concept for Social Security reform in any case, since it represents a fundamental departure from the original concept 70 years ago of providing a guaranteed retirement benefit to workers.
The administration believes allowing younger workers to divert some of their payroll taxes into private investment accounts would ultimately provide a higher rate of return than if all the money stayed in the public system. The AARP considers the idea risky and expensive, given the vagaries of the stock market and the behavior of some investors.
John Rother, AARP's policy director, said at the breakfast that partial privatization of Social Security would risk a rerun of the nation's experience with 401(k) accounts, where a majority of people take money out prior to retirement.
Transition costs for partial privatization have been pegged at between $1 trillion and $2 trillion over 10 years, which opponents of personal accounts say is too big a burden given the skyrocketing budget deficit. Proponents of personal accounts liken the costs to refinancing a mortgage: big costs up front, in the name of financial benefits over the long run.
For AARP, the lessons of the prescription-drug episode are still fresh.
"One thing is that, as much research as we did among our members, there were still plenty of members who said, 'You didn't ask me,' " says CEO Novelli. "We are going to do a better job now of reaching out to them, of informing them, of having a dialogue with these members."
It is this "reaching out" that makes some Republicans uneasy. On "Meet the Press" on Sunday, Rep. Bill Thomas (R) of California, chairman of the House Ways and Means Committee, accused the AARP of spending tens of millions of dollars "to simply scare people."
Novelli would not put a dollar amount on what AARP will spend on outreach to its members and the public in general, but he denied that the goal is to scare people. "In fact," he added, "we are going to be reaching out more and more to younger people, people under the age of 50 ... and essentially educating them on the Social Security issue as well."
The AARP released a poll Monday of 1,500 adults age 30 and over, finding that if given a choice, 3 in 5 would strengthen Social Security with as little change as possible. Mr. Bush, the GOP, and outside groups, for their part, are already reaching out to the public to support the Bush agenda through the 2005 version of what came to be known during the Clinton years as the "permanent campaign." Bush himself is expected to lobby Congress and make speeches around the country, while outside groups purchase TV ads and the party mobilizes grass-roots support via e-mail and other forms of personal contact.
• David T. Cook contributed to this report.