By Ian Swanson - 04/21/10 10:00 AM EDT
Democrats hope they can fix a political problem with seniors by passing their Wall Street reform bill.
Older voters had the most to lose from the stock market’s plunge in the financial crisis, and polls show they remain angry about the collapse and keen on reform.
Older voters can generally be counted on to show up at the polls, and this year they are likely to account for a disproportionate share of the vote.
That’s a problem for Democrats because of the severe generation gap evident in the 2008 election and the unpopularity of healthcare reform.
Exit polling showed Obama won 68 percent of voters 18 to 24 years old and 69 percent of voters 25 to 29 years old, but less than 50 percent of voters 65 years old and older in 2008.
Separately, an April George Washington University Battleground Poll showed only 55 percent of young people said they planned to vote this year.
Those aren’t good numbers for the president’s party.
Older voters soured further on the president during the debate over healthcare legislation.
The healthcare law does have some popular attributes for seniors, such as filling in the so-called doughnut hole of coverage in the Medicare prescription drug benefit.
However, it will also result in $500 billion in cuts to Medicare, and Democrats are having trouble explaining why those reductions won’t dilute care, said David Wasserman of The Cook Political Report.
“In the midterm scheme of things, the importance of senior voters goes way up, and that’s why healthcare has caused Democrats problems this year, and why they want to move on with financial reform,” Wasserman said.
Democrats need to find something to neutralize the disadvantage they face with seniors, Democratic pollster Celinda Lake told reporters last week. She sees financial reform as a possibility, noting that polls show Wall Street reform is much more popular with older voters than was the overhaul of the nation’s healthcare system.
AARP, which sided with Democrats on healthcare reform and also took some lumps, is lobbying hard for the financial reform legislation.
The lobby for people 50 years old and above says many senior citizens saw their retirement savings wiped out by the financial crisis of 2008-09.
Retirement accounts dropped $2.7 trillion in value after the financial collapse, according to data collected by the Urban Institute.
Investment losses from the financial crisis hit seniors disproportionately since they’ve been investors for longer periods of time. The losses also put more of a pinch on seniors who were depending on their retirement and investment funds for income.
“It’s been a year and a half, but they haven’t forgotten at all,” said Cristina Martin-Firvida, director of the economic section for the AARP, which is launching an advertising buy in 12 states this week to play up the Senate’s financial reform bill.
Though markets have rebounded and retirement accounts have gained back much of their value, the anger among senior citizens hasn’t disappeared.
“So many older investors have been taking it on the chin when it comes to their investments,” said Mary Liz Burns, a senior manager in media relations for AARP. “A lot of our members have been very upset over what’s happened.”
AARP is pressing the Senate to include a Consumer Financial Protection Agency in legislation that would be devoted to protecting consumers from abusive financial products and unfair practices.
The group is also pressing for tougher language on fiduciary duty standards. That puts the AARP up against lobbyists for brokerage and insurance agents, who argue tougher rules on their industries would raise their costs and hurt consumers.
AARP’s original goal was to eliminate the broker-dealer exclusion from the Investment Advisers Act. While financial advisers must provide clients information on what investment products are best for their situation, brokers are excluded from this rule.
The Senate bill does not eliminate the exclusion, but it does call for the Securities and Exchange Commission to study the matter and then issue new regulations.
AARP isn’t satisfied, as it believes the SEC will lack the authority to promulgate meaningful rules to toughen the standards for brokers.
Martin-Firvida said the group is working with Sen. Robert Menendez (D-N.J.) on an amendment to ensure that the SEC has authority to issue meaningful rules.
Whether Obama’s signing of a Wall Street reform bill can cure all that ails the Democrats with seniors is a big question.
The Battleground poll showed Democrats down 15 points to Republicans among senior voters. In 1994, when Democrats lost their majority, they didn’t face that kind of gap with Republicans on seniors, Wasserman said.
He sees the problems for Democrats, and the importance of the senior bloc, as particularly acute in Florida as well as the Rust Belt states of Ohio and Pennsylvania.
According to The Hill’s ratings of House races, Democrats have more than a dozen difficult seats to defend in those three states.