Officials of the American Association of Retired Persons appeared on Capitol Hill last week to defend the group's not-for-profit status and to answer charges that executives do not represent their membership.
Sen. Alan Simpson (R-Wyo.), chairman of the Senate Finance subcommittee on Social Security, reiterated his threat to introduce legislation that would require not-for-profit groups to receive at least 80% of their revenues from membership dues.
Such a measure likely would affect not only the 33 million-member AARP, which receives about 40% of its revenues from membership dues, but also most of the groups that represent providers, such as the American Hospital Association and the American Medical Association (June 19, p. 5).
Those groups do not have the same tax status as the AARP but are not-for-profit associations.
Simpson charged that the AARP "used its vast resources to impose a policy agenda upon an unwilling or uninterested membership" and said he was also considering additional legislation that would limit the ability of not-for-profit organizations to lobby Congress.
Eugene Lehrmann, president of the AARP, fought back, arguing that Simpson's attack was in retaliation for the "AARP's support for Medicare." He also defended the group's numerous royalty deals in which it lends its name to companies that sell anything from rental cars to insurance.
"AARP is all about service, not making money," Lehrmann said.
The AARP had some help from two Democratic committee members who said they were concerned that the group was being singled out unfairly for criticism. But the lawmakers added that they supported a review of the tax status of all not-for-profit organizations.
"If we are going to go after AARP, let's also look at these other organizations that lobby and pay no income taxes," said Sen. David Pryor of Arkansas, one of the Democrats defending the AARP. "Let's investigate the (National Rifle Association). Maybe they don't represent all of their members."