It made great, noisy television. But the real story on Capitol Hill is the sound of silence–the absence of protest from the American Association of Retired Persons. If the GOP leadership wants to make genuine progress in holding down the explosive growth of health-care costs for the elderly (now about 10 percent a year), neutralizing the legendary power of the AARP is essential. For months, buying off and bluffing the old-folks lobby has been Speaker Newt Gingrich’s least public and most important task. So far, at least, he has been doing a masterful job – though to do it, he’s had to back off from some real reforms.
It is hard to exaggerate the awe in which politicians hold the AARP. There are other, smaller seniors groups, and last week one band of angry elderly folks tried to disrupt a Ways and Means Committee hearing. But the lobby that counts is the AARP. With a vast army of 33 million members known for turning out on Election Day, it is by far the most powerful interest group on Capitol Hill. The AARP’s clout is the reason that Congress isn’t even trying to trim social-security benefits, and that the GOP’s effort to slice Medicare is an act of genuine political courage–or folly. In 1989, when Congress tried to modestly tinker with Medicare, a horde of outraged old folks threw themselves in front of the then Ways and Means chairman Dan Rostenkowski’s chauffeured car. After the scene was aired on television a few hundred times, Congress slunk away from making any changes in the program.
Republican leaders are obsessed with the AARP. NEWSWEEK has learned that the GOP has recruited a mole inside AARP headquarters in Washington to spy and that the GOP’s technical sleuths intercept the AARP’s internal satellite-TV transmissions to monitor the group’s activities. Republican aides study the AARP’s internal polls (leaked by the mole), hoping to exploit divisions between the organization’s grass roots and its Washington lobbyists. Last February GOP Chairman Haley Barbour privately begged Gingrich to put off revamping Medicare until 1997. after the presidential election. Gingrich is pushing ahead, but very carefully.
Gingrich’s basic strategy is to follow LBJ’s earthy maxim about the best way to share a tent (“Better to have ’em on the inside . . .”). He has met with the AARP’s leadership more than a half dozen times, and his staff consults with AARP staff every day. Originally, Republican reformers hoped to save money by forcing the elderly into HMOs. When the AARP objected, Gingrich backed off. After AARP staffers noticed a glitch that might cost 3 million seniors their insurance, Gingrich immediately ordered the Medicare legislation re-drafted. “Nobody is playing ‘gotcha’,” Gingrich explained to NEWSWEEK. “We don’t have the AARP press conference announcing that we have failed to protect 3 million old people. Instead, we just have the phone call saying, ‘You guys overlooked this’.”
Gingrich is not above offering potential enemies concessions to keep the peace. Under the GOP plan, trade associations like the AARP can set up their own health-provider networks for members, cutting out insurance companies. With the AARP’s vast membership, that could mean huge profits. The speaker has also co-opted other interest groups, allowing doctors and hospitals to set up their own health networks and prom/sing nursing-home owners that he’ll end federal regulation. “Nobody’s happy, but they’re muted,” says Michael Bromberg, a hospital lobbyist. “A lot of multi-million-dollar ad campaigns are sitting on the shelf.”
The GOP has used sticks as well as carrots: last June, Sen. Alan Simpson held televised hearings pointedly examining the AARP’s tax-exempt status. Afterward, Gingrich dryly remarked to Simpson that the AARP had suddenly experienced “a change of heart.” The elderly lobby dropped its previously automatic hostility to Republican reformers and began negotiating in earnest with Gingrich and his staff.
Democrats grumble that the AARP has been intimidated into consorting with the dark side. “They think they’ll get screwed a lot less if they’re not seen collaborating with the White House,” said a senior Clinton aide. AARP officials insist they are just being realistic. Medicare, they say, is bound to be overhauled. Even Clinton has proposed cuts, although not as deep as the GOP’s.
AARP officials also insist that their good will is provisional. The GOP’s target of $270 billion in savings is too high, says Horace Deers, the AARP’s executive director. But in fact, the GOP plan is likely to fall $30 billion or $40 billion short of its goal when more details are revealed next week. To achieve their larger aim of a balanced budget by the year 2002, the Republicans may be forced to abandoned some of their promised tax cuts. Higher premiums for the elderly-beyond the modest hikes already announced–are out of the question.
The AARP’s romance with Gingrich is another blow to the Democrats. After controlling Congress for nearly half a century, the Democrats are literally out in the cold. House Democratic leaders held a mock hearing in the rain outside the Capitol to protest Republican high-handedness. The GOP wants to push through its Medicare plan with a minimum of public debate, and the Democrats are squawking about being cut out- though they have no plan of their own. Gingrich is indifferent to his colleagues across the aisle, whom he refers to as “morally bankrupt,” but he has been careful to exempt Clinton from his barbs. Gingrich knows he must ultimately bargain with the White House if the GOP plan is to become law.
The real brunt of balancing the budget will be felt by people on the lower rungs of the economic ladder. Medicaid, the federal health-care program for the poor, will be cut much more drastically than Medicare, which covers the elderly regardless of income. Under the GOP plan, states will run the program but may see funding increase by less than the rate of inflation, despite soaring healthcare costs. The federal welfare program, meanwhile, faces radical changes. Last week the Senate followed the House’s lead and voted to roll back a key provision of the New Deal: poor people will no longer be automatically entitled to benefits from the federal government. Instead, states will be given lump sums of money to cover costs. Congress must still work out some differences-the House would go farther than the Senate, denying benefits to unmarried teenagers-but Clinton has said he will sign a compromise measure. The relative acquiescence of the Democrats to welfare reform, compared with the coming battles over Medicare, underscores a basic political reality. As Sen. Daniel Patrick Moynihan of New York somewhat bitterly remarked, “The elderly vote, and kids don’t.”
PHOTO (COLOR): Selling the seniors: To blunt attacks from angry old folks, the speaker is giving the elderly lobby plenty of carrots in the fight over Medicare
While most eyes are on Medicare, the GOP has taken huge steps to scale back the federal role in other areas.
The GOP has moved to end the government guarantee of health care for the poor. States would get a chunk of money to use as they see fit. Plan would also cut aid to nursing-home patients but saves $182 billion over seven years.
The GOP couldn’t pass a regulatory reform bill, so they’re cutting the regulators’ budget. The Environmental Protection Agency could wind up with a 25 percent hit, resulting in fewer rules and less enforcement.
The House and Senate would give states much greater control of Aid to Families with Dependent Children, dramatically reducing federal commitment to poor. The Senate bill, endorsed by Clinton, caps lifetime welfare benefits at five years and saves $65 billion over seven.
The Corporation for Public Broadcasting got off easier than programs for the poor. Next year, funding would drop from $312 million down to $275 million, although the Republicans still promise to eliminate it eventually. Viewers should brace for advertising and incessant fund-raising appeals.
The House voted to eliminate the Clinton program that provides college aid to those who do community service. The Senate decides this week. The GOP may give him this–if Clinton accepts other cuts.
By 2002, farm aid would be halved, saving $13.5 billion–but food prices could be more volatile.
