AARP chief executive Bill Novelli says his organization's No. 1 mission is to defeat the proposed privatization of Social Security, the Milwaukee Journal-Sentinel reports.
"We're dead set against creating private accounts," said Novelli, whose 35.5 million-member seniors group just concluded a $5 million print ad campaign against diverting Social Security taxes into private accounts, one of the major initiatives of the Bush Administration's second term.
Novelli said the AARP plans to mount its opposition by hosting forums, using phone banks and contacting legislators, adding that he would not rule out using television advertising. "We have an awful lot of tactics," he said.
Proponents of the plan, which includes most conservatives and younger people, think that investing the money privately will yield better returns and help save a system that's going bust. Mutual funds and institutional accounts are primary alternatives. Opponents, however, claim that taking money out of the 70-year-old national pension program and subjecting it to the whims of market forces is too risky. Transition costs could also top $2 trillion, they say.
No one is questioning the fact that the number of Social Security claims will someday outstrip the number of contributions. But other options exist, opponents say, including raising taxes, rolling back Bush tax cuts, trimming costs and reducing spending elsewhere.
AARP officials noted that the group supports investing a part of the Social Security fund in the market, but it prefers a broad index fund, not an individual stock or mutual fund. It also wants the risk spread broadly among all beneficiaries.
Last year, Social Security paid about $492 billion in benefits to more than 47 million Americans.
The staff of Money Management Executive ("MME") has prepared these capsule summaries based on reports published by the news sources to which they are attributed. Those news sources are not associated with MME, and have not prepared, sponsored, endorsed, or approved these summaries.