By Phil Kerpen and Jon Decker
Last week, the AARP sent a letter to the Department of Labor requesting a delay of a Department of Labor proposal to align its rules for investment advisers with the SEC's "best interest" standard, to give investors more choices while protecting their retirement savings.
It's no surprise that the AARP would seek to thwart one of President Trump's policy objectives. Instead of being a neutral advocate for seniors, the AARP routinely engages in far-left political advocacy. Recall that when seniors were contacting the AARP 14-to-1 urging the group to oppose Obamacare, they instead supported it. Since the law’s passage and implementation, the AARP has received well over $4 billion in “royalties” from its for-profit partner UnitedHealth, most of which comes from their exclusive sale of "AARP" branded UnitedHealth insurance plans.
There is some unique irony in AARP's latest foray into political activism. They are seeking to delay President Trump's retirement rules which are designed to replace an Obama administration regulation known as the fiduciary rule that was struck down in court.
Obama's so-called "fiduciary rule" was dubbed "Obamacare for your retirement" because, under his proposal, if you like your retirement plan or investment advisor, you may not be able to keep it. Estimates show that the rule would have disqualified up to 7 million IRA holders from receiving investment advice and cost consumers an eye-popping $31.5 billion.
Despite the fact that Obama's regulations amounted to an all-out war on seniors' retirement plans, the AARP – allegedly a seniors advocacy group – supported it due to their misguided belief that seniors aren't smart enough to plan for their own retirement. (We can't help but wonder if the Obama rule would have benefited AARP's corporate investment advisory partners.)
It is laughable that the AARP would call for the federal government to tell seniors how to manage their money – just look how the government manages its own!
But here's the real kicker. While the AARP wants to police retirement decisions by enforcing a "fiduciary rule" in an ill-fated attempt to protect seniors, the AARP recently got a lawsuit dismissed by claiming they themselves have no "fiduciary" responsibility to seniors whatsoever – even though they are a seniors organization!
The lawsuit Krukas v. AARP alleged:
“AARP and UnitedHealth, together and through their respective subsidiaries, have orchestrated an elaborate scheme where AARP, as the de facto agent of UnitedHealth, helps market, solicit, and sell or renew AARP Medigap policies and generally administers the AARP Medigap program for UnitedHealth… AARP received ‘a 4.95% commission from every policy sold or renewed,’ id., which ‘constitutes an illegal kickback,’… AARP collects an illegal commission, acts as an unlicensed insurance agent, and materially misrepresents information about the 4.95% charge, all of which constitute violations...
Photo Credit: Flickr 401(k)2012
by Jon Decker
The Wall Street Journal overlooked many consequences to low-income consumers in its June 21 article “The Credit-Card Fees Merchants Hate, Banks Love and Consumers Pay.” If capping credit card interchange fees (the transaction fees which merchants are charged) would result in a windfall for the poor — why did the exact opposite happen when we capped them for debit cards?
When debit card interchange fees were capped in Obama’s Dodd-Frank legislation, fees on deposit accounts increased from an average of 3% to 5%. These fees included additional monthly account maintenance charges (with higher minimum balance requirements), insufficient-funds fees, inactivity fees, and fewer rewards. Taken together, this amounted to a direct attack on low-income families.
The fee cap also completely backfired from its intended result on the merchant side. The Richmond Fed found that, after the fee cap was instituted, 77 percent of merchants did not change their prices, just over 1 percent actually reduced prices, and over 21 percent increased prices.
Low-income consumers are being sold a trojan horse on capping credit card interchange fees. Thousands of years of history tells us that government price controls never result in more prosperity.
Photo Credit: Investment Zen
By Phil Kerpen
I recently testified before the House Select Coronavirus Subcommittee on the meltdown in nursing homes, which excluding New York (which deliberately underreports) now account for over 55 percent of deaths with COVID. The House Democrats’ goal was to blame these high death rates on President Trump – but the blame should belong squarely to the handful of governors who presided over these disasters.
More than 60 percent of both nursing home deaths and total COVID-19 deaths occurred in just seven blue states with about 20 percent of the U.S. population: New York, New Jersey, Connecticut, Pennsylvania, Massachusetts, Illinois, and Michigan. The governors in each of these states ignored federal guidelines and pursued some version of the policy of admitting infectious patients to nursing homes as soon as they were clinically stable.
Nationally about 2 percent of the long-term care population has died with COVID-19 – but over 12 percent in Connecticut, 10 percent in New Jersey, 9 percent in Massachusetts, and about 4 percent in Illinois. Even New York's dishonest underreported number is 4.4 percent of the state's long-term care population.
Carnegie Mellon and University of Pittsburgh mathematicians showed back in March that efforts to shelter everyone would lead to a far higher death total than efforts focused on the elderly, but the liberal governors chose to ignore that reality – even as we've seen over 80 percent of COVID deaths among seniors.
New York's policy was implemented via a March 25 advisory that said: "No resident shall be denied re-admission or admission to the NH solely based on a confirmed or suspected diagnosis of COVID-19. NHs are prohibited from requiring a hospitalized resident who is determined medically stable to be tested for COVID-19 prior to admission or readmission."
AMDA - The Society for Post-Acute and Long-Term Care Medicine warned in response: "Unsafe transfers will increase the risk of transmission in post-acute and long-term care facilities which will ultimately only serve to increase the return flow back to hospitals, overwhelming capacity, endangering more healthcare personnel, and escalating the death rate."
This caution was ignored and the policy stayed in effect until May 10. New York presently reports 6,413 deaths physically in long-term care facilities. Adding hospital deaths, which the state refuses to report, would likely double or triple that number.
Similar policies in New Jersey, Massachusetts, Connecticut, Illinois, Michigan, and Pennsylvania – where the state health secretary moved his own mother out of a nursing home while sending infectious patients in – produced similar outcomes.
As Dr. Anish Koka, described it: "Two weeks into the lockdown, Philadelphia hospitals had been emptied waiting for a New York-style surge that never came... But nursing home patients were treated like patients from the community who were too well to be admitted to the hospital – they were sent home. The consequences of keeping these patients at the nursing home meant the health system had to eventually deal with the entire nursing home being infected."
Pennsylvania now reports 4,345...