Golden oldies.

The AARP is a behemoth that pursues an aggressively liberal political agenda, at the expense of the elderly. Can it be stopped?

WHO would have expected Alan Simpson, that folksy, aw-shucks senator from Wyoming, to be the kind of guy to beat up defenseless little old ladies? Yet Simpson, the new chairman of the Senate Finance Committee's Social Security subcommittee, has been holding hearings zeroing in on the tax-exempt status of the American Association of Retired Persons. And after all, isn't AARP Grandma's advocate in Washington, making sure politicians don't touch her Social Security check?

Those accusing Simpson of engaging in a partisan witch-hunt, motivated by AARP's protectiveness of Medicare's status quo, don't seem to have noticed the Democrat at his side in the hearing room. Sen. John Breaux of Louisiana is obviously at least as sick of AARP as Simpson is.

Breaux focuses on AARP's income from licensing its name: `I mean, it's like Andre Agassi and Michael Jordan, who give their names to endorse products to get royalties and revenues. But y'all have done much better than any person I can think of.' Breaux questions AARP's legal status as a non-profit: `Boy, I don't think that's what Congress intended. We did not intend to create organizations for marketing purposes and give them tax-exempt status.'

AARP's revenue totaled $740 million for the last two years. Less than $300 million of this came from membership dues. What accounts for the other $440 million?

Some $66 million came from royalty income. Then AARP receives 3 per cent of every premium on insurance purchased through it from Prudential Insurance Co.; this (plus the interest earned by AARP before the premiums are turned over to Prudential) yielded over $200 million. In 1993 AARP took in $22.5 million thanks to its relationship with Hartford Insurance Co., $4.4 million from its mail-order pharmacy, and $4.1 million from auto rentals.

Since nearly one-fourth of registered voters are AARP members, AARP is the self-anointed champion of the elderly on Capitol Hill. But it no more speaks for its 32 million members than the American Automobile Association's Washington lobbyists speak for its millions of members who joined to get free emergency towing and road maps. In fact, as Breaux pointed out during the hearings, only one-seventh of AARP members say they joined because of the group's political activities. The others join because of the irresistible airline and car-rental discounts, bargains on health, life, and auto insurance, annuity and mutual-fund discounts, and terrific price reductions on prescription drugs, often an expensive burden for senior citizens. Members get all this for just $8 a year (up from $5 two years ago).

BUT AARP is nothing daunted. Its 1995 policy agenda, Toward a Just and Caring Society, a weighty tome of some 492 pages, gives policy advice on everything under the sun.

Look on page 27 and you'll find that AARP is in favor of increasing gasoline taxes. On page 33, AARP comes out against a lower capital-gains tax, for classic class-struggle reasons. The `highest priority' should be given to `raising taxes on the highest-income taxpayers,' according to AARP.

At a time when most taxpayers have come to hate and fear the Internal Revenue Service, AARP calls for an increase in IRS audits and says the agency's `examination and enforcement staffs should be increased.'

The National Taxpayers Union Foundation, which studied AARP's lobbying agenda two years ago, charges that if AARP got all the tax increases it has asked for, the average household's tax burden would be increased by over $13,000 in a decade.

Instead of standing up for the elderly and arguing that some of the money currently spent on AIDS research should be reallocated for diseases like Alzheimer's and cancer, AARP's position is that `Government programs will have to be expanded to meet the burdens of treating' AIDS. In fact, the fashionable disease gets a two-page section in the AARP agenda, while Alzheimer's gets three scant mentions.

AARP's interests range far and wide. For example, page 391 explains the need for anti-lock brakes on oversized trucks. AARP is in favor of rent control, wants to `fully fund' every existing federal initiative for the homeless, and supports campaign-finance reform consisting of `spending limits and public financing.'

The organization's Washington staff even joined the opponents of Clarence Thomas's nomination to the Supreme Court. During his confirmation hearings, they put out press releases charging that as EEOC chairman he `engaged in actions that significantly diminished the rights of older workers.'

But health care is where AARP really shows its colors as the best friend of big, dumb government. First there was the health-care fiasco of 1988, in which AARP successfully pushed for an expansion of Medicare to cover catastrophic illnesses, funded by a surtax and premium on beneficiaries. Thus AARP actually signed on to a program that slapped a tax of as much as $800 a year on elderly people.

The next year senior citizens revolted. House Ways and Means Chairman Dan Rostenkowski was chased down a Chicago street by his own elderly constituents, and catastrophic-illness insurance ended up being scrapped. It remains, extraordinarily, the only case in which an entitlement enacted into law was later repealed.

What lesson did AARP learn from the experience? Its legislative director, John Rother, said in 1992, `With repeal of catastrophic coverage we learned that piecemeal approaches do not work.'

So last year it was on to socializing the country's entire health-care system. Rother was named president of the Health Care Reform Project, a coalition of trade unions and other liberal groups whose explicit purpose was to drum up support for HillaryCare. This notwithstanding the results of a survey conducted in the AARP Bulletin. Of the 25,000 who took the time to answer, 82 per cent rejected the Clinton health proposal. AARP research director Constance Swank quickly explained; `They're probably not a true cross-section of AARP membership.' However, an internal memo shows that AARP did a `health-care-reform impact study' showing that of the more than 16 per cent of AARP members who chose not to renew in 1994, `one-half state that AARP's stance on health care was either a main reason (35%) or a very important reason (15%) in their decision not to renew.'

NOT ONLY does AARP pursue policy positions at variance with its constituents' views, it pursues them aggressively. AARP concedes that it spends over $6.7 million annually on `direct lobbying, including political-advocacy advertisement.' Tim Penny, formerly a Democratic congressman from Minnesota, explains that `AARP is invariably a presence on those nights when the liberal coalition is concerned about the outcome of a particular issue.'

In the current budget debate, AARP is pushing hard to shelter Medicare from efforts to balance the budget. AARP has its work cut out for it. Medicare was the fastest-growing spending program in the 1980s, ahead of defense and Social Security. Its growth was exceeded only by the growth in net interest payments. According to the Congressional Budget Office, `without change, Medicare will account for 24 per cent of entitlement spending in 2000, compared with 21 per cent in 1995.' Even the Clinton Administration has admitted the program will go bust within seven years if nothing is done.

Since budget cutters have targeted entitlement reform as essential to controlling the size of government, AARP is laying down a thick smokescreen. Its Bulletin has asked whether Medicare and Social Security `are being confused with entitlement programs' (emphasis added). In the same article, which seems designed to confuse readers, Rother calls it an `erroneous assumption that all entitlements are responsible for the growing deficit.' Never mind that of the $1.25 trillion in federal outlays on domestic programs in fiscal year 1993, `Entitlement programs and grants for Medicaid, family support payments, and housing accounted for 60 per cent,' according to Robert McArthur, an analyst for the U.S. Census Bureau.

One way to start trimming government might be to slash the $86 million AARP received in federal grants in 1994 -- 19 per cent of its total reported income. Those grants included $24 million from the Environmental Protection Agency for the `national Senior Environmental Employment (SEE) program.' The Department of Labor is giving AARP $50 million this year through the Senior Community Service Employment Program (SCSEP) for poor senior citizens `to sharpen and develop skills while searching for a permanent job.' The Department of Labor should have looked at the 1993 - 94 grant year. The total cost per person enrolled in SCSEP was $3,446; however, fewer than 4,000 of the 13,923 older workers enrolled `found unsubsidized employment in 93 - 94 grant year,' according to AARP's own figures.

AARP contended in its 1993 Executive Report that it `continued to defend the rights of workers as they age.' But as Sen. John McCain remarked in his testimony to the Social Security subcommittee, AARP refuses to support repeal of the biggest obstacle faced by the millions of senior citizens who want to work: the Social Security earnings test. `In reality, what the AARP means when it states it is fighting for work opportunities is that it is fighting to preserve the federal largesse that funds its work programs,' McCain explained.

Moreover, while AARP insists that taxpayer money is not used to subsidize its political activities, the fact remains that without the $86 million, AARP would have to make a choice between reducing its work programs and shrinking its huge Washington political-advocacy apparatus.

But AARP may have shown itself at its most arrogant when it tried to get around a new law designed to stop for-profit companies from mailing at non-profit postage rates.

In 1990, a statute was enacted prohibiting the use of the non-profit third-class postage rate for mail that `advertises, promotes, offers, or, for a fee or consideration, recommends, describes, or announces the availability of . . . insurance policies . . . not generally otherwise commercially available . . .' The prohibition clearly applied to AARP. In early 1992, AARP tried to convince the Postal Service to join with it in seeking to change the law and to forgive AARP's back postage deficiencies, even if it had violated the 1990 statute.

The Postal Service refused. `We explained that [we] did not have the authority to permit an organization to make mailings at a rate which violated statutory provisions,' testified Jeffrey Zelkowitz, a Postal Service Senior Counsel. In other words, No, we can't help you break the law.

AARP ended up suing the Postal Service. In an out-of-court settlement, AARP agreed to pay past postage deficiencies.

ALL RIGHT, many AARP members might say, they may be up to no good, but I still get a great deal.

Well, when all is said and done, that's not altogether true either.

The unrivaled circulation of AARP's publications make them the most lucrative advertising market in America, but AARP will sell ad space only to companies that give it kickbacks. `AARP does not accept advertising in Modern Maturity for products that are similar in nature to those offered by providers who have the right to use AARP's name and logo,' AARP said in its written response to questions from Sen. Simpson. That means if there's a better bargain out there for senior citizens, they won't find out about it from AARP.

For example, the AARP Capital Growth mutual fund got only a two-star rating from Morningstar (five stars is the highest possible) and an E rating from Investor's Business Daily (A+ is the highest possible). Even in the case of AARP's most successful fund, Growth and Income, AARP members could have found 25 funds in the same category that did better in their 1992 - 94 performance and more than 200 that have performed better this year -- and they would have done so if AARP had not prohibited those other funds from advertising in Modern Maturity.

AARP members might also resent the millions spent to maintain the plushness of the organization's Washington operation. Employee compensation totaled $63 million in 1994, including over $335,000 for executive director Horace Deets's salary plus benefits. AARP's office space cost over $47 million for the last two years, $34 million of which went for its Washington headquarters.

SOME OF AARP's millions could be redirected from pushing its political agenda and feathering its Washington nest, and instead be spent trying to find the best bargains for the elderly. AARP could even cut down on the quantity of taxpayers' hard-earned bucks it accepts.

What the Republican Congress does to rein in AARP may be one of the more important tests of its guts. Chairman Simpson seemed amenable to a set of rules for non-profit organizations suggested by Paul S. Hewitt, executive director of the National Taxpayers Union Foundation -- itself a 501(c)(4) non-profit that would fall under these rules:

-- Non-profits should ideally receive no federal grants. Short of that, if an organization spends more than 5 per cent of its budget on lobbying, then it may not receive or administer federal grants.

-- Non-profit mail subsidies should be capped at 5 million pieces.

-- For a lobbying organization to qualify for non-profit status no more than 20 per cent of its operating budget may be funded by commercial activities.

Hewitt also thinks AARP's members should be, under law, the ones to decide if AARP's lobbyists may represent them before Congress.

But Hewitt's most important suggestion goes to AARP's members themselves, who unwittingly have created a monster with all those $8 checks: `Consumer beware,' he tells them. `Don't sell your political soul for the price of an airline discount.'