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AARP’s misleading ad about balancing the budget

June 20, 2011

With talks on reaching a deal to cut spending and raise the debt ceiling reaching a critical stage, the venerable over-50 organization AARP has weighed in with a television advertisement that seeks to shift the focus from entitlement programs such as Medicare onto what it deems to be wasteful spending by Congress.

We had earlier given the American public four Pinocchios for failing to understand the basics of the federal budget. We reached that conclusion after a new poll showed 63 percent of those surveyed believe the federal government spends more on defense and foreign aid than it does on Medicare and Social Security. (That’s wrong.) A similar majority believes that problems with the federal budget can be fixed by just eliminating “waste, fraud and abuse” — and that 42 percent of every federal dollar is wasted.

Given those beliefs, it seems that the AARP pitch would have a receptive audience. But is it right?

The Facts

We asked AARP to provide data on the programs mentioned in the ad, all of which certainly sound amusing or bizarre. (A video of the shrimp on a treadmill experiment is so funny we embed the video at the end of this article.)

But it turns out this stuff adds up to peanuts in the context of a $3.7 trillion federal budget. The shrimp on a treadmill cost $560,000. The pickle technology project amounts to $775,000. The poetry in the zoos totaled just under $1 million.

While the ad suggests Congress was responsible for this spending, only the pickle technology spending was the result of a congressional earmark. The shrimp and zoo spending were grants made by federal agencies—and actually were exposed by Sen. Tom Coburn (R-Okla.) as an example of wasteful spending.

The biggest line item mentioned in the ad is the Cotton Institute in Brazil ($147 million). But that was the result of the United States losing a ruling at the World Trade Organization over its subsidies to U.S. cotton farmers. There is an effort in Congress to stop the payments to Brazil and instead deal with the issue by adjusting U.S. subsidies.

Much has been made of wasteful federal spending though congressional earmarks, but the Republicans have vowed to end the practice. (There is some question about how successful they will be.) But even so, earmarks never amounted to much of the federal budget. At best, analysts estimate, eliminating earmarks would save only about $9 billion a year.

Meanwhile, much of the budget — more than 40 percent — is spent on social insurance, such as Social Security, Medicare and Medicaid. Spending on those programs has soared in the last three decades—while projections show the spending in them will only increase, especially as the baby boom generation heads into retirement. When the deficit is projected to be $1.1 trillion in 2012, according to White House estimates, those programs are where the substantial savings can be found.

In fact, the spending identified by the AARP in this ad is so puny that if all were eliminated, it would succeed in only reducing 15/1000th of the deficit–even though the ad starts out by saying “If Congress really wants to balance the budget” it should get rid of these programs.

AARP also suggests that Social Security cuts are on the table in the debt ceiling negotiations. All sides have generally agreed to leave Social Security for future discussions, with House Republicans in their budget further adding that potential changes to Social Security should not affect people over 55.

Mary Liz Burns, an AARP spokeswoman, justifies the inclusion of Social Security because there are proposals floating around Congress that reduce the deficit through some Social Security changes. Those ideas do not appear to be going anywhere in the next month, so this looks like scare mongering.

David Certner, AARP’s legislative policy director, said AARP is also concerned that Congress might extend a payroll tax holiday (which would not affect benefits but could weaken Social Security’s long-term financing) or make adjustments to how cost-of-living increases in benefits are calculated.

“No one would suggest that these three things or even similar projects would balance the budget,” Certner said. “This is a 30-second ad to catch people’s attention. We don’t have time to educate people over what’s going on.” He claims that AARP has identified $100 billion in health spending cuts that he says would not affect benefits.

The Pinocchio Test
The AARP ad perpetuates the worst stereotypes about how easy it would be to balance the budget. At a time when the nation’s fiscal crisis—amid the looming retirement of the baby-boom generation– demands informed and reasoned debate, the AARP misinforms its members about the choices the nation faces. The choice is not between shrimp treadmills and Medicare; the question is how growth in the big entitlement programs can be restrained to accommodate the baby-boom generation without harming the elderly already receiving benefits. If AARP has identified real spending cuts worth $100 billion, it should have made an ad promoting those ideas, not an ad perpetuating myths.