New AARP Official Opposes Earnings Penalty on Social Security

Jack Carlson, the new executive director of the American Assn. of Retired Persons, said Friday that Congress should abolish the rule that reduces Social Security benefits for those who continue working until age 70.

The earnings penalty is “dumb” and discourages older workers, said Carlson, who will become the chief operating officer of the 26-million-member organization next month. Elimination of the penalty would expand retirement benefits by $5 billion a year.

Carlson’s criticism of the penalty, made in an interview, and his endorsement of the proposed expansion of Medicare benefits through “catastrophic care” legislation indicates he plans to keep the AARP on its traditional course of campaigning for increased government help for the elderly.

Appointment a Surprise

Many AARP staff members and others active in aging-related issues were surprised by the AARP board’s appointment last month of Carlson, a political conservative who previously had worked as executive vice president of the National Assn. of Realtors and chief economist of the U.S. Chamber of Commerce. They expressed concern that pressing for more government assistance might not be a top priority for him.

However, Carlson said in the interview: “I’ve been involved with areas concerned with the economy, and with growth and efficiency, but I’ve also been involved with compassionate services.”

As a staff member in executive branch agencies during the Lyndon B. Johnson, Richard M. Nixon and Gerald R. Ford administrations, Carlson said, he worked on projects that expanded the food stamp program and developed cost-of-living increases for Social Security beneficiaries. He also worked on clean air and clean water legislation, he said.

His Prime Emphasis

The new AARP official said he will put prime emphasis on enabling older persons to keep working, particularly as the number of new workers entering the work force continues to decline. Phasing out the Social Security earnings penalty would be an important step toward that goal, he said.

Retirees under the age of 65 receive reduced Social Security benefits when they earn more than $6,000 a year. For those between 65 and 69, the penalty begins when they earn more than $8,160. Benefits are cut by $1 for every $2 earned over those ceilings. There is no penalty for income earned by those over 70.

Social Security Commissioner Dorcas R. Hardy has endorsed removing the penalty for those over 65, according to spokesman Phil Gambino, but such action would require a vote by Congress.

‘Discriminatory Limitation’

“There should be no penalty for a person working,” Carlson said. “When we get enough people to understand it, we’re going to change that discriminatory earnings limitation.”

He said that even though the government would have to make greater payments, it would benefit from the income taxes and Social Security taxes that older workers would pay.

Carlson, who is succeeding Cyril F. Brickfield, also endorsed pending legislation for Medicare catastrophic care coverage that would provide unlimited days of government-paid hospital care and put a cap on patient spending for doctor and hospital bills.