Senator blasts AARP at hearing, but gets little help

June 14, 1995|By John B. O'Donnell | John B. O'Donnell,Washington Bureau of The Sun

WASHINGTON -- Sen. Alan K. Simpson's campaign against the American Association of Retired Persons drew support from two Democratic colleagues yesterday, but not a single fellow Republican appeared at an overflow, televised hearing that he called to flay the nation's most powerful seniors' organization.

Both Democrats -- John B. Breaux of Louisiana and David Pryor of Arkansas -- couched their support in general terms, praising Mr. Simpson's decision to look into whether nonprofit organizations should be paying more taxes.

Mr. Simpson has exposed "one of Washington's dirty little secrets -- that there are about 1 million organizations in this country that are tax exempt," said Mr. Breaux. "This is a good idea that has gone haywire."

The AARP was not at the witness table, but issued a statement later saying that it operated within the law and based its positions on the desires of members.

It accused Mr. Simpson of trying to silence it.

The organization said a board meeting in Portland, Ore., prevented its participation in yesterday's hearing.

Mr. Simpson scheduled a second session next week to hear the AARP.

The 33 million-member AARP has long been at odds with Mr. Simpson as it staunchly defended Social Security and Medicare -- programs that the Wyoming Republican says must be reined in to avoid fiscal catastrophe.

With the GOP takeover of the Senate, Mr. Simpson now has a platform, chairmanship of the Social Security subcommittee, to go after the AARP.

While he was careful to say that he is interested in all tax-exempt organizations, his target was clear.

"We are here not only because AARP has drifted from its stated mission of representing senior citizens," he said, "but also because I believe the evidence is clear that AARP has also drifted considerably from any reasonable description of a nonprofit organization that should enjoy a tax exemption and unlimited lobbying privileges."

Less than 40 percent of AARP's $382 million in annual revenue comes from membership dues, Mr. Simpson said.

He complained of its profit-making ventures and the $86 million in federal grants it gets every year to run programs for the elderly.

He said the organization had paid the Internal Revenue Service $135 million to settle a tax dispute and continues to wrangle with the IRS over its status.

"If this empire is not what our nonprofit laws are intended to facilitate -- and if there are other organizations that are doing this, too, let's look at them all -- then obviously we need to change the law," he said.

Mr. Simpson suggested that other organizations would be scrutinized later, perhaps including veterans groups.

But, for now, he said, "If you are going to look at the problem, then look at the 800-pound gorilla swinging around on the vines."

Mr. Simpson expressed surprise that any other senators showed up. He said he warned his colleagues, "Don't get tainted with this," and acknowledged that some indeed were worried about possible reprisals from the politically potent lobby.

"Hell, the AARP is a bunch of tough cookies," he told reporters. "They smile and tack your hide on the wall."

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