By Richard (RJ) Eskow
Senior Fellow, Campaign for America’s Future
Only 6% of Americans think Congress should concentrate on reducing the deficit or changing the tax code, according to the latest CBS News poll. Nearly ten times as many people, 56%, want it to focus on creating jobs and fixing the economy. Guess which set of policies is the center of attention in Washington right now?
Pick up any newspaper or turn on any news channel and you’ll hear a lot of talk about the deficit. But creating jobs and spurring economic growth? Nobody’s even discussing it.
Call them the Six Percenters. When Americans were asked which problem Congress should “concentrate on first,” 4% said the deficit and 2% said taxes. That’s about one person in twenty. Yet the vast apparatus of state is about to devote most of its attention to this tiny minority and its agenda. The nation’s capitol is already obsessed with the Bowles/Simpson proposal, which calls itself a “deficit reduction” plan but is also focused on a tax overhaul that helps the well-to-do.
Is it surprising that over 70% of Americans are either “dissatisfied” or “angry,” according to the CBS poll? The government isn’t even making a serious effort to address what matters to them most – jobs and the economy. Instead, Washington is spending all its time debating deficit reduction and taxes. Worse, many opinion leaders are pushing precisely the wrong approaches to both policies. Those approaches will most Americans while benefiting the prosperous few. Meanwhile these Americans – call them the Silenced Majority – seem destined to sit and watch as their needs go unmet and their concerns go unvoiced.
If we take those CBS News poll findings and present them visually, it might help to convey the disconnect between Washington’s priorities and everyone else’s:
The Steelworker Active Organization of Retirees (SOAR) is asking President Barack Obama to remove Honeywell CEO David Cote from the Deficit Commission.
SOAR president, C. L. Entrekin, and director, James F. Centner, wrote the president Sept. 1 saying that no person demanding an end to health insurance for his company’s retirees, as Cote is, should sit on the National Commission on Fiscal Responsibility and Reform and decide matters such as whether to cut crucial programs like Social Security.
You can read the SOAR letter here. SOAR urges you to write the president as well.
By Mike Elk
A lot of attention recently has been focused on one of President Obama’s top advisors on Social Security – Former Senator Alan Simpson (R-WY) after he described Social Security as being “a milk cow with 310 million tits.” Perhaps attention should be focused instead on a much more sinister one of President Obama’s personal appointments to serve on his deficit commission.
Meet Honeywell CEO David Cote – the most dangerous man in America. David Cote is so dangerous that he’s willing to risk nuclear fallout in order to demand that uranium workers agree to cutting their retiree health care and pension plans.
Honeywell runs the only conversion facility in the world that can distill pure uranium in Metropolis, Illinois. On June 28th, Honeywell locked out its union workers during contract negotiations because the union, United Steelworkers (USW) Local 7-669, refused to accept the company proposal to eliminate retiree health care and pension plans for new hires and increase workers’ out of pocket health care to $8,500 a year. Good health care coverage for retirees is especially important to uranium workers who suffer rates of cancer ten times higher than the general public due to their daily interaction with radioactive material; thus the workers refused to give in to demands to cut their retiree health care coverage entirely.
In a major concession, however, the Uranium workers’ union refused to go on strike in the interests of keeping the plant safe and agreed to continue working under an extension of their current contract. Honeywell, which is already making record profits, decided they could make even more if they played hardball with their workers and risked a nuclear disaster. (more…)
When you think about it, Alan (“Tits”) Simpson is the ideal jester to deflect attention from the bigger joke — the fiscal reform commission itself. The problem is less Simpson’s dopey comments and more the idiocy of the rest of the commission.
Given what is happening to the real economy in the real world, the prospect of a double-dip recession and the prospect of a lost decade of high unemployment, the idea that the bigger menace is Social Security is just whacko. Let’s recall that Social Security is in surplus until 2037!
Yet the idea that the road to recovery leads though cuts in Social Security, Medicare, and other social outlays that are keeping the depression from worsening, if anything, is gaining traction among opinion elites.
Exhibit A is a doubly dishonest column by the New York Times‘ new whiz-kid pundit, Matt Bai, who used a liberal congressman, Earl Blumenauer of Oregon, as a prop to make his misleading case.
According to Bai’s column, Security is like a giant lottery, based on IOU’s that will require a Ponzi Scheme of further debt. Now, it turns out that Bai is not just wrong on the issues, but Blumenauer doesn’t believe what Bai attributed to him. In attacking the progressive coalition Strengthen Social Security, Bai wrote:
The coalition bases its case on the idea that Social Security is actually in fine fiscal shape, since it has amassed a pile of Treasury Bills — often referred to as i.o.u.’s — in a dedicated trust fund. This is true enough, except that the only way for the government to actually make good on these i.o.u.’s is to issue mountains of new debt or to take the money from elsewhere in the federal budget, or perhaps impose significant tax increases… So this is sort of like saying that you’re rich because your friend has promised to give you 10 million bucks just as soon as he wins the lottery.
But this is total malarkey. In fact, the 75-year projection of Social Security’s finances shows that under fairly pessimistic assumptions about economic growth, the shortfall in Social Security’s finances is just over half of one percent of GDP. Lift the cap on earnings subject to Social Security taxes, and the problem disappears.
More importantly, get wage growth back to its historic trend of increasing as productivity increases (rather than the top getting the benefit of all the economic gains) and the problem vanishes without changing the tax code. Raise wages, and we could increase Social Security benefits.
Bai not only distorted the reality of Social Security, but he also distorted Blumenauer’s views, cherry picking quotes from two interviews to make it seem that the congressman favored such drastic measures promoted by deficit hawks as cutting benefits or raising the retirement age. But the quotes in the column don’t say that — only Bai’s gloss on them — and the congressman believes nothing of the sort.
The trouble is that too many legislators make Delphic comments about whether Social Security should be “on the table,” Bluenenauer’s past vagueness gave Bai an opening, and Bai is all too representative of opinion elites — including the Washington Post editorial page, columnists like David Broder, many Democratic as well as Republican congressmen, and some in the Obama administration.
It was former Budget Director Peter Orszag, seconded by chief of staff Rahm Emanuel and the pollsters, who persuaded President Obama that the fiscal commission was a good idea. The theory was that the commission would give the president “cover” and demonstrate that he was fiscally responsible.
But as events have played out, this premise totally backfired. The commission provides plenty of cover all right, as in burial cloth. Its proposals could bury both the economy and this presidency.
The commission has given a platform to clowns like Simpson. But worse, it has lent credibility to the idea that Social Security is somehow a drag on the economy — creating a vicious circle of hawkish legislators and dishonest pundits like Bai feeding on each other.
The reality, of course, is that if the economy (and Obama’s fortunes) are going down the drain, the reason has nothing to do with Social Security’s finances in 2037 — and everything to do with slow growth, high unemployment, and the lingering effects of a damaged banking system right now.
Yet the storyline being peddled by the commission, of a dire fiscal crisis, makes it politically more difficult for Obama to take the necessary steps to get a recovery going.
There is a whole other path to economic recovery and fiscal balance. That other path has five parts:
A lot more emergency federal spending now to create jobs and purchasing power.
Increased taxes on the top two percent.
A continued program of public investment in physical and social infrastructure
A real public option on health insurance, to restrain medical inflation, which is the prime driver of federal deficits in the long run.
A defense of Social Security as a key source of income for the elderly.
This strategy is better economics and better politics. Voters, by overwhelming margins, support Social Security. Over the years, Republicans have tried to tamper with it. And it is lunacy for Democrats to associate themselves with efforts to cut it.
But Obama’s own fiscal commission has painted the president into a corner. Virtually all of the remedies we need to get a strong recovery going are seen as fiscally too costly; and willingness to go after Social Security is being touted as the test of fiscal responsibility.
The campaign to fire Simpson has the right spirit but the wrong target. Obama should draw a line in the sand and make clear that if the commissioners propose cuts in Social Security, he will consider the whole exercise tainted.
Maybe we should be grateful for Simpson and his 310 million tits. If his antics lead serious commentators take a closer look at the commission, perhaps they will also look deeper into the fiscal foolishness of Simpson’s colleagues.
By Richard (RJ) Eskow
Senior Fellow, Campaign for America’s Future
Alan Simpson is the co-chair of President Obama’s Deficit Commission, which is charged with creating a bipartisan consensus for balancing the budget. Lately Simpson’s foulmouthed tirades have drawn at least as much attention as the Commission’s actual work. His latest rant — which includes denigrating an activist for women’s issues with remarks about “a milk cow with 310 million tits” — crosses the line once and for all. It demonstrates conclusively that he possesses neither the judgment, the ability, nor the emotional stability to carry out his mission. He’s become an embarrassment to the President and an impediment to his Commission’s objectives. He must resign immediately. If he’s unwilling to do so, the President must fire him.
Simpson’s notoriously thin-skinned, and he’s in the habit of pelting his critics with abusive monologues or emails. That argumentative streak, which has only gotten worse in recent months, leaves him spectacularly ill-suited to the mission the President laid out for him when he announced the formation of his Commission. The President said “I’m confident that the Commission I’m establishing today will build a bipartisan consensus to put America on the path toward fiscal reform and responsibility.”
Instead of building consensus, Simpson’s been showering skeptics with abuse, rather than persuasion. His run-in with activist Alex Lawson became an Internet sensation, both for Simpson’s unbalanced demeanor and for the sheer irrationality of his attempted counter-arguments. A Simpson email to Dean Baker read in part: “if this is the way that you do your reporting, I would think that you would have damn few fans or readers!” (He seems unaware that Baker’s a highly respected economist.) Simpson adds: “I loved the picture accompanying your piece. With chin in hand, I first thought of Rodin’s The Thinker — but after reading the piece I can see you haven’t done very much of that!” (more…)
Former Wyoming Senator Alan Simpson, the co-chairman of President Obama’s deficit commission, has sparked calls for his resignation after sending an offensive and sexist note to Ashley Carson, the executive director of the Older Women’s League. While such calls are reasonable — Simpson’s comments were certainly more offensive than remarks that led to the resignation of other people from the Obama administration — the Senator’s determined ignorance about the basic facts on Social Security is an even more important reason for him to leave his position.
I was also a recipient of one of Simpson’s tirades. As was the case with the note he sent to Carson, Simpson attached a presentation prepared for the commission by Social Security’s chief actuary. Simpson implied that this presentation had some especially eye-opening information that would lead Carson and me to give up our wrong-headed views on Social Security.
While I opened the presentation with great expectations, I quickly discovered there was nothing in the presentation that would not already be known to anyone familiar with the annual Social Security trustees’ report. The presentation showed a program that is currently in solid financial shape, but somewhere in the next three decades will face a shortfall due to an upward redistribution of wage income, increasing life expectancy, and slow growth in the size of the workforce. The projected shortfall is not larger than what the program has faced at prior points in its history, most notably in 1982 when the Greenspan Commission was established to restore the program’s solvency. (more…)
By Richard (RJ) Eskow
Senior Fellow, Campaign for America’s Future
There’s a battle going on between those who are defending Social Security – that is to say, the “good guys” – and those like economist Alice Rivlin and Wall Street banker/giveaway king Neel Kashkari, who would cut it. The attackers pretend to see nuances that don’t exist, slanting their arguments to make benefits reductions seem inevitable and even humane. True to form, Rivlin frightens Americans with the idea that we need to “save” Social Security, then proposes to “reassure” them … by cutting it.
Fortunately the defenders are getting reinforcements. A new coalition of organizations is uniting under the “Strengthen Social Security” banner, including major unions like the AFL-CIO, SEIU, and AFSCME, the National Organization of Women, MoveOn, and the National Education Association, as well as 60-plus other organizations representing over 30 million Americans. (Note: I am associated with that coalition through my affiliation with the Campaign for America’s Future.)
In this corner, hailing from the great state of Nevada …
Harry Reid told attendees at the Netroots Nation conference that “Social Security is the most successful social program in the history of the world,” while condemning the “fear tactics of those who say Social Security is going broke. It’s not.” That’s a good start. Nancy Pelosi was even stronger, and considerably more specific, telling conference attendees that she opposes raising the retirement age. Pelosi added:
“To change Social Security in order to balance the budget, they aren’t the same thing in my view. When you talk about reducing the deficit and Social Security, you’re talking about apples and oranges.” (more…)
Next month, Social Security, one of the nation’s most successful and important government programs, turns 75. It is the cornerstone of retirement security for tens of millions of Americans.
Next November, when the federal budget deficit commission makes its report, large chunks of that cornerstone may be chipped away if the panel recommends cutting Social Security benefits and raising the retirement age rather than addressing the real causes of the nation’s growing debt. (Click here to read AFL-CIO President Richard Trumka’s recent testimony before the federal deficit commission.)
A new study by the Center for Economic and Policy Research (CEPR) finds that if the benefit cuts and retirement age increases that have been most prominently suggested were adopted, they would have a substantially negative impact on low- and middle-income families. Says CEPR co-director Dean Baker:
There is a great deal of talk in policy circles about cutting Social Security, but very little discussion of the financial situation of those affected by the cuts….All of these proposals will result in significant cuts in income for low- and/or middle-income families. (more…)
A video of retired Sen. Alan Simpson’s foulmouthed rant toward activist Alex Lawson is making the Internet rounds, as well it should: The sheer audacity and rudeness of the guy makes this clip “must-see TV.” It’s a political bloopers reel (it can be seen at the bottom of this post).
But, while Simpson’s outrageousness makes the video entertaining, here’s what makes it important: Alan Simpson is one of two chairs of a bipartisan commission created by President Obama to study the Federal deficit. His comments reveal a number of very important things about his biases, his tendency to distort and mislead, and his ideological extremism. These traits are likely to taint the Commission’s work – work which has great implications for the future.
Simpson is the former Republican Senator from Wyoming, but those who hope that Simpson’s biases will be offset by his Democratic counterpart are probably in for a big disappointment. As Robert Kuttner reports, Clinton Chief of Staff Erskine Bowles was finalizing a deal with New Gingrich to cut Social Security when the Monica Lewinsky scandal derailed their agreement.
Alan’s one of the Wyoming Simpsons, although on this video he sounds more like one of the Springfield Simpsons. (D’oh!) Here’s what his comments reveal, besides an irascible personality: That he wants to create a sense of crisis around Social Security, that raiding Social Security to pay for other government expenditures is perfectly fine with him … even though he’s supposedly a “small government” conservative, that he’s entered an Orwellian world where cutting Social Security isn’t really “cutting” it, and that he’ll use absurd rhetorical games to defend his position. Jane Hamsher has the whole transcript, but here are the highlights.
The Shock Doctrine Without the Shock
Naomi Klein described the “shock doctrine,” where conservatives use a crisis to force unpopular ideas on the public. There is no crisis where Social Security’s concerned, but Simpson and other Commission members want us to think there is. That explains exchanges like this:
SIMPSON (regarding Social Security): It’ll go broke in 2037.
LAWSON: What do you mean by ‘broke’? Do you mean the surplus will go out and then it will only be able to pay 75% of its benefits?
SIMPSON: Just listen to me instead of babbling …
Simpson then goes on to affirm Lawson’s statement (without apology, of course.) But he resumes the fearmongering a minute later:
SIMPSON: … There is not enough in the system by the month … to pay out what comes in. In other words there is more going out than coming in. That happened 3 or 4 weeks ago.
And, a few minutes later:
LAWSON: … Social Security is separate, though, from the general budget, right? It’s totally in the green.
SIMPSON: But it wasn’t. Just four weeks ago, there wasn’t as much coming in as going out.
LAWSON: Except you’re not calculating the interest paid on the bonds, because, if you do include that, it’s still in the green this year.
SIMPSON: Well you can go through all the sophistry of babbling that you want to.
LAWSON: It’s not sophistry. It’s just what the SSA says. So I’m just going on the numbers.
Alex is absolutely right, and Simpson’s the one engaging in sophistry (if by “sophistry” you mean, to use Simpson’s word, “bulls**t.”) If the interest is paid as agreed on those bonds, Social Security is still in the black. And if the government pays back what’s it has taken out of the Social Security coffers, benefits can be paid in full until at least 2037. But about that borrowed money …
Big Government Alan
It’s fascinating to watch Simpson suddenly defend big government expenditures, even when (make that only when people’s own insurance payments – money they’ve paid to cover their retirement is borrowed and then left unpaid:
LAWSON: … (W)hat about the $180 billion in surplus that (Social Security) brings in every year?
SIMPSON: There is no surplus in there. It’s a bunch of IOUs.
LAWSON: That’s what I wanted to actually get at.
SIMPSON: Listen. Listen. It’s 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been setup.
LAWSON: Two wars, tax cuts for the wealthy.
SIMPSON: Whatever, whatever. You pick your crap and I’ll pick the real stuff. It has to do with the highway system, it was to run America. And those are IOUs in there. And now there is not enough coming in every month …
Simpson’s capable of mustering an eloquent defense of government spending when it suits his argument (although he opposes it when it’s actually being proposed). And welching on an IOU sounds just fine to him, too.
We didn’t cut your benefits! Now be quiet and eat your cat food!
SIMPSON: In the year 2037, instead of getting 100% of your check, you are going to get about 75% of your check. That’s if you touch nothing. If you like that, fine. You’ll be picking with the chickens yourself when you’re 65.
So we want to take care, we’re not cutting, we’re not balancing the budget on the backs of senior citizens. That’s bullshit. So you’ve got that one down. So as long as you’ve got those two things down, you can’t play with anymore, that we’re not balancing the budget of the United States on the backs of poor old seniors and we’re not cutting anything, we’re stabilizing the system.
LAWSON: Thanks for being so frank. My question is: raising the retirement age, is actually an across-the-board benefit cut?
SIMPSON: There are 15 different options being discussed in here today, and why nail one of them…[inaudible]…if you would like to get one of them that pisses your people off.
LAWSON: Alice Rivlin was just on CNBC saying that that was one of the favorite methods.
SIMPSON: There are 15 of them in there.
I like the folksy “cutting with the chickens” line (although I don’t know what the hell it means.) But this is the thinking: “we’re not cutting , we’re stabilizing.” Expect to hear the word “stabilizing” used to mean “cutting” many times in the month to come – and expect your Social Security to be “stabilized” when it’s time for you to retire if this ideology prevails.
Run that by me one more time?
Simpson asserts that Social Security wasn’t originally intended to pay for people so far into retirement because life expectancy was low in 1935, when SSI was created. That’s true … but the program’s been modified since then to adjust for increased life expectancy. That leads to this whopper:
LAWSON: —(I)t’s my understanding from actually looking at the 1983 commission (which revamped Social Security), they actually started prefunding the retirement of the baby boom by building up that huge surplus.
SIMPSON: They never knew there was a baby boom in ’83.
Really? They didn’t there was a baby boom … in 1983?? They didn’t know how many babies had been born in the years 1948-1964? Here’s the real reason Alan Simpson says outrageously false things like that:
Read my lips: We’re cutting your benefits so that we don’t have to pay new taxes!
Here’s the bottom line. Simpson doesn’t want to force the government to pay those bonds back, because it will probably require new taxes to pay for them. The Commission’s likely to recommend some new taxes, but the Simpson crowd wants those increases to be a small as possible. Here’s an example of that ideology in action:
LAWSON: The government doesn’t actually own the bonds, it’s the government owing…
SIMPSON: Let me say things in a way so your fans will understand this, so you can go and be a hero. There is not enough in the system … So, what do they do? They go to that trust fund and say, ‘We need the IOUs out of it.’ And they say, ‘You can have them, but you have to pay for them’ …
Paying for them … which means more taxes … is exactly what Simpson and his comrades don’t want.
There’s more, and you should read/watch the whole thing, but that’s the gist of it. It’s frightening to consider the implications of Simpson’s reaction – the fierceness, the ideological drive, and the closed-mindedness. Remember, his Commission has been entrusted with determining your financial future. That means your economic fate is in the hands of an angry ideologue … and, for “balance,” he’s been partnered with somebody who worked with Newt Gingrich to try cutting Social Security.
It’s astonishing, watch the video to see Alan Simpson, Co-Chair of the National Commission on Fiscal Responsibility and Reform (“Deficit Commission”) explain that buyers of US T-Bills don’t necessarily need to get paid back because the money has “been used”!
Background: In the 1980s the Social Security payroll tax was increased, supposedly to set aside funds to cover the retirement of the post-WWII baby-boomer generation. But this extra revenue was instead used to give huge tax cuts to the wealthiest Americans. (Yes, that’s right, they taxed working people and used the money to cut taxes for the rich.) So now that the boomers are retiring the money is needed. They want those bonds paid back now to cover Social Security payments.
The Commission: Now there is the Deficit Commission looking into how to raise money to cover what the government handed out as tax cuts to the rich. Rather than get the money from where the money went, the plutocrats are instead trying to convince people that it would make more sense to just cut Social Security instead, so they don’t have to pay it back. The commission is meeting in secret, preparing to recommend cutting Social Security benefits. Hence the nickname for the Commission: “Catfood Commission,” because cutting Social Security would force as many as 1.5 million old people into poverty and eating cat food for dinner because it costs less.
After Bush and Wall Street destroyed the economy older people were laid off in waves (because they’re past a certain age), can’t get jobs (because they’re old), now have been denied extended unemployment and denied COBRA subsidies. Now they’re called “lazy”. They’re threatened with the humiliation of drug tests. And finanlly, the Catfood Commission, meeting in secret, threatens any retirement security they have. Digby calls it “simple cruelty.” And, as sTiVo pointed out in a comment at Open Left yesterday,
Since raising the retirement age is now on the table as a solution to the non-problem of Social Security, it is VITAL to raise this issue. WHAT JOBS????
Here is a simple idea for the deficit commission: everyone knows — every one of us knows — that the deficit was caused by tax cuts for the rich and huge increases in military spending. So to fix the deficit … Duh? Can we connect the dots?
Connect the dots:But connecting those dots between the obvious causes of the deficit and the way to fix the deficit is beyond the mental abilities of people in “The Village.”
The Simpson Video: Alex Lawson of of Social Security Works confronted Simpson leaving one of the secret meetings Thursday with a video camera and asked some questions about this. The video is above, transcript excerpts below: (h/t Jane Hamsher)
LAWSON: But what about the $180 billion in surplus that it brings in every year?
SIMPSON: There is no surplus in there. It’s a bunch of IOUs. … It’s 2.5 trillion bucks in IOUs which have been used to build the interstate highway system and all of the things people have enjoyed since it has been set up.
Simpson starts from the premise that the Treasury will default on the bonds issued to the Social Security trust fund, because all the best people apparently know that it’s better to default on America’s senior citizens and plunge them into poverty than it is to default on, say, the Chinese.
. . . The commission is also looking into cutting Medicare benefits, because the deal guaranteeing no-bid Medicare contracts to the pharmaceutical industry by both Republicans and Democrats can’t possibly be abrogated. The committee claims it’s independent, but it’s not THAT independent. So, old people, too bad for you.
This is really important. They increased the Social Security tax on working people, gave the money out as tax cuts for the wealthy, created deficits on purpose to defund government, created a huge debt mess, and now the next stage of this plan is to gut social programs.
This is what the Deficit Commission is about. Tax cuts for the rich and military spending caused the borrowing and raising taxes on the rich can stop it. But the plan was to force a perception of a debt emergency to stampede people into accepting a dismantling of government that works for We, the People, and provides for us, empowers us and protects us. This is the confrontation of plutocracy vs democracy. We can’t let them get away with it.
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