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AARP CEO Bill Novelli Testimony To Senate Budget Committee On Bipartisan Task Force For Responsible Fiscal Action

On behalf of AARP’s more than 39 million members, I appreciate the opportunity to present our views regarding a bipartisan Task Force for responsible fiscal action. I would like to commend Chairman Conrad and Senator Gregg for coming together in a bipartisan way to address our country’s long-term fiscal problems and to help break the gridlock that is so prevalent here in Washington.

Taking on these issues in a bipartisan fashion is truly significant. They affect everyone—Republicans, Democrats, Independents, and most importantly, our children and grandchildren, many of whom are not yet old enough to declare their allegiance to one party or another. How we address these issues will determine what kinds of lives they will have and what their future will be.

Their future will not be very bright if they are drowning in the red ink of budget deficits, or can’t afford health care or can’t attain long term financial security.

The majority of Americans today believe that the coming generation will be less well off than their parents. If that happens, it will be the first time in American history and a big step backward for the American dream.

That’s why we at AARP appreciate your willingness to tackle these tough issues. We welcome your willingness to consider every aspect of the problem. To us, this means both revenues and expenditures, tax entitlements as well as spending entitlements, and most of all, the health care system and its skyrocketing costs.

The projected rapid growth in federal spending for the big entitlements—Social Security, Medicare and Medicaid—over the next 30+ years is frequently attributed to three great demographic trends: the retirement of the boomer generation, increasing longevity, and low fertility rates.

But the primary source of our future budget problems is the growth in health care costs throughout the system. These costs have grown faster than the economy even in times of prosperity, and well before Medicare and Medicaid ever came onto the scene.

As Congressional Budget Director Peter Orszag has said, “The long-term fiscal problem truly is fundamentally one involving the rate at which health care costs grow and much less about the aging of the population.”

Yes, we have a deficit problem in this country, but we have a health care crisis. Health care costs are the key fiscal problem for the federal budget. If we don’t do something about rising health care costs, we won’t be able to control the costs of Medicare and Medicaid. And health care costs are also the great challenge facing patients and their families, business and labor and state and local government, as well.

And not only are health costs too high; we’re not getting our money’s worth in terms of health outcomes from the system.

At a time when individuals and families are the most at risk of health and financial insecurity, we urge you to look beyond the conventional response of either raising revenues or reducing benefits.

Some of both may well be necessary, but these are not the only options, nor are they the best options for American families. They won’t help families make ends meet, or when their children get sick or as they get older.

There is another option that works for everyone, and that is to lower the overall cost of health care…to make it affordable and sustainable.

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