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AARP: Deficit Commission Proposes Multiple Hits on Current and Future Retirees

December 1, 2010
AARP Media Relations,, 202-434-2560


Shifts Health Costs Onto Seniors and Retirement Risk Onto Future Generations Without Addressing Fundamental Reform

Washington—AARP remains deeply concerned that the recommendations from the Co-Chairs of the President’s Fiscal Commission would take our nation in the wrong direction, eroding the health and financial security of middle class Americans. The unbalanced deficit reduction proposals from the Fiscal Commission dim further the prospects for a secure retirement for millions of Americans by deeply reducing Social Security benefits, shifting too many costs onto Medicare beneficiaries, and eliminating opportunities to plan for long-term care. Older Americans care about the deficit and putting our nation’s fiscal house in order. However, any changes in the name of deficit reduction must be the right ones, and the nation must properly budget for the health and economic security of its people.

The following statement is from AARP Executive Vice President John Rother:

“The latest report on deficit reduction would actually increase the health and economic insecurity of millions of Americans. As we wait for the President’s Fiscal Commission to present their report to the President, AARP believes strongly that the commission and our elected leaders need to more fully assess the impact of its recommendations on real people, and not strictly as a budget exercise.

“As AARP analyzes the most recent commission proposals, the impact is troubling: they would lower the retirement incomes of average people who rely on Social Security while significantly increasing their out of pocket costs for Medicare. The combined impact of these changes would grow over time and disproportionately hurt future retirees, who already face an extremely challenging landscape and who will need Social Security just as much—if not more so—than current retirees. Half of the work force today does not have access to workplace savings programs, including 401(k)s; personal savings rates are low, particularly for retirement; and, the unemployment rates are high. Among those aged 45 to 54, 36% have saved less than $10,000 for retirement. In addition, proposed changes would significantly reduce Social Security benefits for many future retirees.

“The Co-Chairs’ proposal would compound this loss of income by dramatic cost shifts in the Medicare program, with most beneficiaries experiencing significant increases in cost-sharing. The plan does not do enough to address the important issue of ensuring doctors remain in the Medicare program. The draft proposal would also reduce the options Americans have to save and plan for their future long-term care needs, and their desire to remain in their homes and communities, while shifting costs back on struggling state Medicaid programs. Rather than massive cost shifting in Medicare, we need to reduce costs throughout our health care system.

“Over the past several months, AARP has been talking with and listening to Americans across the country about the importance of Social Security, Medicare and Medicaid, and what they think about potential cuts to these critical health and retirement. We agree that the deficit must be addressed, and we will support balanced policies to address the long-term financial challenges this nation faces. However, there is a strong disconnect between Washington and the rest of the country when you review proposals that simply add to the costs of middle class Americans instead of alleviating their burden.

“The long-term impact of these proposals would result in cuts that grow over time and fall hardest on the sick and younger workers and their families. AARP calls on the President’s fiscal commission and members of Congress to focus on how any changes to Social Security, Medicare, Medicaid and other vital programs will help achieve health and retirement security for all Americans.”

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About AARP

AARP is a nonprofit, nonpartisan social welfare organization with a membership that helps people 50+ have independence, choice and control in ways that are beneficial and affordable to them and society as a whole. AARP does not endorse candidates for public office or make contributions to either political campaigns or candidates. We produce AARP The Magazine, the definitive voice for 50+ Americans and the world's largest-circulation magazine with over 35.1 million readers; AARP Bulletin, the go-to news source for AARP's millions of members and Americans 50+; AARP VIVA, the only bilingual U.S. publication dedicated exclusively to the 50+ Hispanic community; and our website, AARP Foundation is an affiliated charity that provides security, protection, and empowerment to older persons in need with support from thousands of volunteers, donors, and sponsors. We have staffed offices in all 50 states, the District of Columbia, Puerto Rico, and the U.S. Virgin Islands.

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