Bloomberg News is reporting that the Obama administration wants to start a dialogue on how to convert retirement savings into a reliable stream of revenue for retirees: “The U. S. Treasury and Labor departments will ask for public comment as soon as this week on ways to promote the conversion of 401(k) savings and Individual Retirement Accounts into annuities or other steady payment streams, according to Assistant Labor Secretary Phyllis C. Borzi and Deputy Assistant Treasury Secretary Mark Iwry, who are spearheading the effort.”
After the 2008 stock market contraction, which many saw a 30% plus decline in their portfolios, the federal government has taken it upon themselves to protect investors from the vicissitudes of the market. Rahm Emmanuel’s dictum: never let a crisis go to waste; is about to play out before our very eyes; and AARP is about to benefit once again from policies propelled by the Obama administration.
In the ensuing health care debate (if one wishes to call it a debate) the democrats proposed to cut $400 billion in Medicare and $150 billion in Medicare Advantage. Medicare Advantage gives seniors the option to join private plans that pay upwards to 12% in health care benefits than traditional Medicare. This cut would be a cash cow for AARP through its Medigap program, which is a supplemental insurance program to Medicaid. Medigap produces 70% of AARP’s annual income.
It seems that AARP is about to have another “windfall profit”. In 2007 AARP announced they were getting into the annuity business with New York Life Insurance Co. Now members of the Obama administration are trying to convert retirement savings into annuities. Just how cozy is AARP with the federal government and the current administration?
Barry Rand CEO of AARP gave Barack Obama the maximum donation of $8900 and a total amount of $15,900 to democratic candidates dating back to 1995.
AARP gets millions in grants from the federal government. John Carlisle wrote an article in Human Events outlining the largess:
Five cabinet level agencies dispense grants to AARP. The large majority of the money comes from one Department of Labor grant. For the year ending December 31, 2003 when AARP received $68 million in federal funding, the Labor Department gave AARP $63.3 million for its Senior Community Service Employment Program (SCSEP), a job training program for low-income senior citizens. The second largest federal grant maker is the IRS. That year, the IRS gave AARP $3.4 million as part of the Tax Counseling for the Elderly (TCE) program, which provides volunteers to help seniors complete their federal taxes. The Department of Housing and Urban Development (HUD) gave $626,279 for its Housing Counseling Assistance Program.
The Department of Health and Human Services (HHS) gave $444,493 for various special programs, typically legal assistance and Medicare fraud prevention programs. The Department of Justice (DOJ) gave $15,000 for telemarketing fraud prevention.The Labor Department’s SCSEP grant for the year beginning in July 2004 and ending in July 2005 was $75 million, which accounts for nearly 90 percent of the $83 million in federal grant money AARP received as of December 31, 2004. The proposed IRS grant for the TCE program in fiscal year 2006 is $4.1 million.
AARP is a registered non-for-profit organization. However, it makes millions on royalties and service provider management fees from its corporate sponsors, while receiving grants from the federal government. It seems that this organization has a special status, unlike any other organization. And right now they are dictating policy that profits them at the expense of the citizenry.
Source: http://www.consumeraffairs.com/news04/2007/02/aarp_annuity.html http://www.humanevents.com/article.php?id=10731 http://michellemalkin.com/2009/09/22/hmmm-is-the-aarp-getting-kickbacks-from-obamacare/