AARP Urges Finance Committee to Reject Cuts to Social Security for Deficit Reduction

AARP today submitted written testimony for the Senate Finance Committee's hearing on deficit reduction and Social Security. AARP recognizes the serious challenges that the nation's deficit and debt present, but believes that the hard earned Social Security benefits of millions of Americans should not be cut to reduce the deficit or as part of a budgetary exercise. 

As members of the committee and their colleagues consider ways to reduce the federal deficit, AARP is fighting to ensure arbitrary cuts, caps or triggers do not jeopardize the health care and retirement security of America's seniors and future retirees. As a part of its ongoing efforts, the Association announced last week a new initiative to protect benefits older Americans have earned through years of hard work from proposals that would cut Social Security and Medicare in the name of deficit reduction or to raise the debt ceiling. Excerpts from AARP's statement to the committee follow: 

"AARP believes that the nation's long-term debt requires attention and we are committed to lending our support to a balanced approach that addresses the nation's long-term fiscal challenges. However, older Americans recognize that Social Security is a self-financed program that has run surpluses for nearly 30 years and has not contributed to our large deficits." 



"Americans who have contributed payroll taxes over a lifetime of hard work into Social Security have earned their benefits, and the Trust Funds, like any other creditor, should be paid back the money it lent to the federal government in order to provide the workers who contributed a greater measure of financial security in their retirement years." 

"The debt held by the Social Security Trust Funds is a real obligation of the United States to its own people, and the American people, like any other creditor, expect that the money borrowed from them by the government will be paid back. If Congress chooses to not pay back the Trust Funds obligations and defaults on the U.S. Treasury bonds, then this will be a true "raid" on Social Security." 

"AARP generally opposes proposals that result in arbitrary, across-the-board, spending cuts that fail to distinguish between different types of spending and would take a meat ax approach to governing. In this regard, we are opposed to subjecting Social Security to sequestration procedures that serve to enforce spending caps." 

"Social Security is currently the principal source of income for nearly two-thirds of older American households receiving benefits, and roughly one third of those households depend on Social Security benefits for nearly all (90 percent or more) of their income." 

"Given the already modest benefits current Social Security beneficiaries receive, the program's continued critical importance to future generations' income and retirement security, the system's dedicated financing, and the lack of a contributory impact on our current large deficits, AARP firmly believes that Social Security should not be targeted for cuts for deficit reduction or as part of a budget exercise to satisfy arbitrary spending thresholds." 

"More importantly, in the face of declining pensions, shrinking savings, falling home values, and longer life expectancies, Social Security deserves to have its own national conversation that focuses on preserving and strengthening the retirement security of Americans and their families for generations to come." 

Details on AARP's latest effort in the ongoing fight to protect Social Security and Medicare can be found here: www.aarp.org/protectseniors. 

For a complete copy of AARP's statement for the record, please contact AARP Media Relations at 202-434-2560 or media@aarp.org. 

10 Quick Tips for Saving Money

In these difficult economic times, everyone is looking for ways to cut costs. AARP offers these 10 quick tips to help you kick off 2011 and save money throughout the year. 

1. Save big on your home energy costs. Want to lower your home energy costs by 10 percent or more? Turn down your thermostat, use appliances such as dishwashers and washing machines during non-peak hours, unplug appliances when not in use, and use ceiling fans instead of A/C. 

2. Drop extra line services from your home phone. 

Extra services on your home phone, such as call waiting, can each cost around $50 per year. Review services you're signed up for and drop any that you don't need on a regular basis. 

3. Use a cell phone with prepaid minutes. 

Why pay for hundreds of dollars for cell phone minutes you're not using? With pre-paid cell phones, you pay only for the minutes you use, saving you valuable dollars every month. 

4. Use a "basic" cell phone plan with limited minutes. 

Scaling back from a cell phone plan with loads of minutes (and bells and whistles that you don't find necessary) to a basic plan with limited minutes can save you $20-30 per month. You'll keep the peace of mind your cell phone provides you, especially in case of emergency, but won't pay for what you're not using. 

5. Downsize from premium to basic cable. 

Premium channels can run over $80 per month. By scaling back to basic cable, you still receive a variety of channels, while saving $20 to $40 monthly. 

6. Keep your car tires inflated and your engine tuned. 

Studies show that simply keeping your tires properly inflated and your engine tuned can save you over $100 per year in fuel. 

7. Use public transportation or carpool to save on gas. 

By relying on public transportation rather than your car or by carpooling, you might save a tank of gas per month (approximately $40) and help the environment at the same time! 

8. Cut out one restaurant meal per week. 

Consider cooking one extra meal per week rather than dining out, and you could save anywhere from $40 to $100 per month. 

9. Make your daily coffee at home. 

Specialty coffees can run between $2 and $5 per drink. Save a bundle by replacing your weekday latte with homemade coffee. 

10. Use coupons at the grocery store. 

Coupons save you up to 20 percent off your grocery bill. So if you spend $200 to $400 per month, using coupons could save $40 to $80. Consider signing up for a grocery store club card to save even more. 

Try these tips and start saving! The next step is to establish a budget and see how your savings help you stick to it. For more ideas on savings and help with budgets, visit www.aarp.org/money/budgeting-saving. 

AARP National Spelling Bee

AARP today announced a national call for entries for its 16th annual National Spelling Bee which will be held in Cheyenne, Wyo., June 17-18, 2011 at the Little America Hotel and Resort. Open to anyone age 50 or older, the AARP National Spelling Bee attracts spellers from all over the U.S. who compete for more than $5,000 in gifts and prizes. Online registration will be open at www.aarp.org/spellingbee through June 16th. In a recent survey, AARP members said that staying sharp mentally is extremely important to discovering the best of what's next in their lives. 

"The AARP National Spelling Bee is a great way for adults to put their skills to the test in a fun, competitive environment," said Tim Summers, AARP Wyoming Director. "With adults from all over the country converging in Wyoming for the competition, the bee proves to be a hit with contestants year after year. We are pleased to host this contest for the 50+ crowd to really test themselves." 

The AARP National Spelling Bee consists of two rounds of competition, beginning with a 100-word written spelling test in the morning, narrowing the field to the top 15 spellers who go on to compete in the oral spelling rounds. Spellers are allowed to miss two words in the oral rounds before being knocked out of the competition. The first place speller will receive $5,000, second place will receive $500 and third place will receive a $250 prize. The top three finishers will also receive free AARP memberships. 

A "pre-Bee" workshop will be offered to all contestants and the general public on Friday, June 17. The free workshop, "Gray Matters: Training the Grownup Brain," will feature interactive sessions that will explain the impact of diet, fitness, and relationships on brain health and answer your questions. 

Registration for the 2011 AARP National Spelling Bee is available via www.aarp.org/spellingbee and 1-877-926-8300. Pre-event registration is $40 for spellers and remains open through June 16th; walk-in registration costs $50. 

Sponsors of the 2011 AARP National Spelling Bee include: Visit Cheyenne; Cheyenne Light, Fuel & Power; and AARP Wyoming. 

The AARP National Spelling Bee was created in 1996 by a group of AARP members in Cheyenne, Wyo., who wanted a fun way to challenge their peers to keep their minds sharp as they age. The competition has been held every year since, and always in Cheyenne. A group of dedicated volunteers select the words, write the sentences, organize, and promote the event. Spellers travel from across America to showcase a lifetime of knowledge and to celebrate their years of experience. 

A complete schedule for the two days, sample word lists, contest details and official rules, can be found at www.aarp.org/spellingbee or by calling the AARP office in Wyoming at 1-866-633-3290. 

Opinion: AARP Calls Mega Sales Tax Risky Experiment

by the Missouri AARP
This morning, the House Committee on Tax Reform will hear HJR 8, which proposes a constitutional amendment to eliminate the state’s individual and corporate income tax and replace it with a greatly expanded sales tax. This “mega sales tax” is unwise public policy, and the committee should reject this risky experiment. In order to make up for the revenue lost from the income tax, sales taxes would be applied to a much broader range of goods AND services than are currently taxed. “Missourians should not be fooled by this ‘wolf in sheep’s clothing.’ This is not the current sales tax, but a sales tax unlike any other, anywhere. If we think that accessing services is expensive today, it’s nothing compared to what the cost of a dental visit, doctor’s office visit or prescription medications would be under this proposal,” said Andrea Routh, Executive Director of the Missouri Health Advocacy Alliance. In addition to being applied to such a broad range of goods and services, the tax rate itself would be much higher. Under the proposal, the sales tax rate may be as high as 12.25 percent for the state sales tax, plus 2.75 percent local sales tax, depending on what exemptions are included.

Craig Eichelman, Senior State Director of AARP Missouri, expressed his concern about the proposal, saying “In terms of older citizens and particularly seniors with fixed incomes, this proposal would create excessive burdens because vital products and services for seniors could be subject to the tax including prescription medications, assisted living and nursing home care. Even if these items received a special exemption, the cost on everything else, including food, would have to be even higher.” The vast majority of Missourians would pay more in taxes under the proposal. A 2010 analysis by the Missouri Budget Project and the Institute on Taxation & Economic Policy found that even with a prebate to every household to lessen the impact of the increased tax, 95 percent of Missourians would actually pay more under this plan than they currently do, making it even more difficult for families to make ends meet.

“The added tax for things like doctor’s office visits and child care will make it increasingly difficult, if not impossible, for parents who are already struggling to meet their kids’ basic needs. It’s sometimes called the ‘choice tax’, but caring for our children shouldn’t be a ‘choice,’” said Jeremy LaFaver, Director of Public Policy for the Partnership for Children. Because the tax rates called for in the proposal will be insufficient to replace current revenue, depending on the tax rate and exemptions, the state could see a shortfall of more than $3 billion, causing devastating budget cuts. “Although surely not intended by its backers, the mega-sales tax would shift more of the tax burden to the poor and result in major funding cuts to vital state services that assist some of Missouri’s most vulnerable citizens,” said Mike Hoey, Executive Director of the Missouri Catholic Conference. Cuts to education, health care, services for seniors, and the infrastructure that makes Missouri a desirable place to live and work will have a tremendous impact on the state and its future.

Brent Ghan, Chief Communications Officer for the Missouri School Boards Association said, “We are extremely concerned that the so-called "Fair Tax" would have a negative impact on already depleted state revenue and would in turn threaten the future of funding for our public schools." Education is critical to economic development efforts and the ability to attract jobs to the state. As Dee Ann Aull, Director of Programs and Public Relations for the Missouri National Education Association said, “Every school district throughout Missouri, every PTA and every School Board should be very concerned about the impact that this proposal would have on Missouri’s ability to provide a comprehensive, quality education. Funding for education would be severely compromised under this plan, weakening further the foundation of our economy.” In addition, the proposal will likely have a detrimental impact on local economies in Missouri. Said Dan Ross, Executive Director of the Missouri Municipal League, “Missouri cities are very concerned that the implementation of the measure would drive retail sales across state lines and further exacerbate tax revenue lost to Internet sales. Further, it is the city's responsibility to provide essential services to its residents and this proposal could put that in jeopardy.” If passed, the constitutional amendment proposed in HJR 8 would go before voters in November 2012. “A constitutional amendment would lock in a policy based on untested economic theories,” said Amy Blouin, Executive Director of the Missouri Budget Project. “Missouri should not risk its future on an ideological experiment.”

Free Tax Assistance for Low to Moderate Incomes

The AARP Foundation is again providing free tax assistance and
preparation for taxpayers with low to moderate income through the AARP Tax-Aide
program. AARP Tax-Aide, in its 43rd year, is the nation's largest free tax
assistance and preparation service, giving special attention to people over age 60,
and will provide assistance through April 15. You do not need to be a member of
AARP or a retiree to use this service.

"Since 1968, AARP Tax-Aide volunteers have enthusiastically provided this service in
their communities," said Anita K. Parran, AARP Missouri associate state director for
Public Affairs. "This free, quality and confidential program also provides
year-round service and in some instances, volunteers can make visits in nursing
homes and other locations if taxpayers are physically unable to make a site visit."

Annually, an army of more than 33,000 volunteers, trained in cooperation with the
Internal Revenue Service (IRS), helps millions of taxpayers with the preparation of
their income tax returns at nearly 7,000 sites across the country. The Tax-Aide
program is offered at approximately 190 sites in Missouri including senior centers,
libraries and other convenient locations.

"I really enjoy volunteering for AARP Tax-Aide, particularly during these tough
economic times," said Lynn Boulware, AARP Tax-Aide state coordinator. "Tax law can
often be confusing, but AARP Tax-Aide volunteers can make the process of filling out
tax returns a whole lot easier."

Call toll-free 1-888-AARPNOW (1-888-227-7669) or visit www.aarp.org/taxaide to
locate an AARP Tax-Aide site near you.

AARP Tax-Aide is a program of the AARP Foundation, offered in conjunction with the
IRS.

AARP Launches Initiative to End Abuse By Financial Industry

AARP today launched a multi-faceted initiative to pass financial reforms necessary to safeguard the pocketbooks of Americans. The initiative includes targeted local TV, radio and print ads in states; grassroots engagement; national and local research; and social media outreach.

“We know now that older Americans lost billions of hard earned dollars due to the failure of an outdated and compromised financial regulatory system,” said Nancy LeaMond, Executive Vice President at AARP. “We strongly believe that any bill the Senate passes should protect the rights of consumers first and foremost.”

AARP is calling on the Senate to put consumers first, not the financial institutions that caused the economic crisis that hurt millions of older Americans. The ad campaign highlights the consequences of the financial industry’s reckless behavior, using a jingle with lyrics including:

“Oh big banks how you’ve used us
Mistreated and abused us
Mortgage lenders too
We gave you our trust
Then you almost went bust
Turned our taxes into bonuses too
Now you want to forget
We paid off your debt
You act like you’re free of blame
But your profits they grew
While you broke every rule
We’re tired of playing your game
Stop the fat cats from putting your money at risk – tell your senators to pass financial reform now.”

Recent AARP polling has shown that Democrats, Republicans and Independents age 50-plus overwhelmingly say they want reform. More than 9 in 10 people believe financial institutions should use plain language to describe their products, be transparent about fees on accounts, disclose the costs and benefits of all products they market and that consumers should be able to know more about the financial professionals they are consulting for advice.

“AARP is calling on Senators to pass a strong bill that includes, among other protections, a strong and independent consumer watchdog, rules that forbid the financial industry from selling products they know their customers can’t afford or don’t understand, and greater transparency in an industry that has historically operated behind closed doors,” said LeaMond.

To view the ad and learn more about the initiative visit:
action.aarp.org/yourmoney or watch the ad on YouTube at http://www.youtube.com/watch?v=UpX7cui-Fl4.

For more information about AARP’s financial reform surveys visit:
http://www.aarp.org/research/surveys/money/consumers/fraud/articles/finprotect_10.html.

For more activity on financial reform, check out AARP on Twitter: @AARP and Facebook: facebook.com/aarp