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Roger Hickey

By Roger Hickey
Co-Director of the Campaign for America’s Future

On Saturday, the group known as America Speaks (funded by Wall Street mogul Peter G. Peterson and two other foundations) brought together several thousand people in meetings in 60 cities. They gave participants misleading background information about the federal deficit and economic options to achieve fiscal “balance” and future prosperity.

Peterson cannot be pleased with the participants’ mainly progressive policy choices, which will be presented on June 30 to the Deficit Commission that Peterson encouraged President Obama to create.

According to America Speaks’ own press release, when a scientifically selected group of participants picked up their electronic voting devices, they overwhelmingly supported proposals to

Raise tax rates on corporate income and those earning more than $1 million.

Reduce military spending by 10 to 15 percent,

Create a carbon tax and a securities-transaction tax.

This pretty progressive set of solutions emerged from the process many feared would be skewed to the solutions of conservative deficit hawks.

America Speaks was certainly not pushing the discussion in a progressive direction. The background materials — and policy options — provided to participants were anything but fair and balanced, as analysis by economist Dean Baker demonstrated. Most egregious were the following:

Social Security. America Speaks gave participants no explanation of the fact that Social Security has its own source of funding, and thus does not contribute a dime to the deficit. Americans actually have been paying extra payroll taxes to create a trust fund that will make sure full benefits can be paid for decades into the future — and thus there is no rational reason to cut Social Security benefits (or raise the retirement age) in order to reduce the Federal deficit. But you wouldn’t know that from the America Speaks materials or explanations. The Social Security program is simply presented as another big spending program and participants were presented with various ways to cut benefits. Given all this, a majority endorsed raising the retirement age for full benefits to 69 — a benefit cut for future retirees. But they also chose the progressive plan to raise the cap on taxable earnings subject to Social Security taxes, thus producing income for the system from greater portion of higher income peoples’ wages.

Medicare and Medicaid. The America Speaks background materials actually did acknowledge that the rising budgetary costs of Medicare and Medicaid are driven by the fact that our whole health care system is broken — and costing both the private sector and government programs much more per person than in countries that have much better health outcomes. They even acknowledged that thoroughgoing reform — like single-payer health care system — is the only way to control those rising costs.

However, when it came to options the participants were allowed to vote on, they were all variations on how much people wanted to cut Medicare and Medicaid benefits. At this point in the proceedings, the America Speaks founder and President, Carolyn Lukensmeyer had to acknowledge a rebellion in the ranks. People were demanding to have the option of voting for “single-payer” reform instead of cutting Medicare and Medicaid, and when she announced a complicated process of writing in that alternative, a roar of approval went up from the crowd in several locations. Their press release doesn’t report how many people chose this difficult to select option, but the organization clearly had had to scramble to quell a revolt by participants. (Note: their press release states that people chose to “cut health care spending by at least five percent,” but the choice was really to cut government health programs five percent — and my reading of the charts online was that only 21 percent of participants chose that option, with 71 percent choosing “no change.”)

Austerity vs Growth. Finally, the organizers had heard enough protests from the Economic Policy Institute and the AFL-CIO that they felt they had to assure the audience that they were not prioritizing deficit reduction over the need for economic stimulus to get the economy to start producing jobs. But after that ritual disclaimer, they went on to devote the vast majority of the day to deficits as our defining economic program.

David Dyen, an LA participant, wrote in a post on firedoglake,

“While the cumulative effect of all this tends towards social safety net cuts rather than tax fairness, the crowd in Los Angeles, at least, wasn’t biting at first. In surveying the discussion groups, most people seemed more concerned about the desperate need for more stimulus spending to move the economic recovery forward… In the nationwide instant survey, taken by participants through electronic devices at all 19 America Speaks sites, 61% said the government needed to do more to strengthen the recovery, with only 25% opposed. Even with a push poll question asking if participants supported government programs to increase growth ‘if it increases the deficit,’ got a majority, 51%, of the nation-wide group of participants.”

My next-day posting here — claiming participants mostly rejected conservative nostrums — is based on watching the process online, from reports from people who attended events around the country — and on a fairly sketchy press release put out by America Speaks on Thursday, just after the town meetings. But America Speaks billed these events as a nation-wide scientific experiment in finding out what the “American people” think about the economic way forward. They are thus duty bound to publish a full report on the details of every single question — and voting results — that participants were asked to make decisions about. It is especially important that they put out this comprehensive report because they are also scheduled to summarize their findings before a special public meeting of the White House Deficit Commission on June 30. Only then can the people who participated in the process judge whether their surprisingly progressive decisions are being accurately presented to the Commission.

Note: Click here for a blog post on the Augusta, Maine America Speaks event by participant Barbara Burt, director of the Frances Perkins Center.

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Roger Hickey was a leader of the campaign to stop the privatization of Social Security, and he is a founder and member of the steering committee of Health Care for America Now. In the late 1980s, he and Jeff Faux created the Economic Policy Institute.

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Follow Roger Hickey on Twitter: www.twitter.com/rogerhickey

Roger Hickey

 By Roger Hickey
Co-Director of the Campaign for America’s Future

Anne Kim and Jonathan Cowan of Third Way took to the Politico Arena op-ed page (and website) on Thursday with the hoary slander that progressives care only about “expanding the entitlement state” and have no interest in economic growth or expanding wealth. Apparently blind to the worst economic downturn since the Great Depression, they then replay New Democrat staples from the 1990s as if they were somehow new or relevant. They get it wrong.

As Barack Obama took charge of an economy in free fall, progressives urged the new administration to undertake the largest investment-led stimulus in our history. Third Way Democrats worked to make it smaller and weaker. Despite that, the recovery act did stop the fall and begin to pull the country out of recession. With unemployment still nearly at 10%, progressives continue to push for more job creation and aid to the states to forestall brutal cuts in teachers and police and other vital services.

Looking towards the new economy that we must build out of the ruins of the old, the president has it right. We can’t go back to the old bubble-bust economy built on debt and speculation. We need to build on a new foundation. That includes public investment in areas vital to our future: education and training, a 21st century infrastructure, research and development, new energy. It includes a new global strategy and industrial policy to insure that we make things in America once more. And it should include an extension of our basic social contract, insuring retirement security, affordable health care and education, a living wage and safe working conditions, first rate public education to all Americans. On that foundation, we can build an economy – as we did after World War II – that works for working people, and revives America’s broad middle class.

Kim and Cowan recycle the conservative canard that progressive support for the Obama health care plan is motivated by a desire to turn the US into (gasp!) Denmark, where (they think) everyone lives on “entitlements.” Apparently these Third Way Democrats reject the argument advanced by their Democratic president that health care reform, in addition to being a matter of economic justice, is also the first step toward getting control of health care costs — which every economist agrees is the real driver of long term public deficits. (Denmark, with a more comprehensive public healthcare system spends only 9.8 percent of it’s GDP on health care. The US spends 16 percent. Far from luxuriating on entitlements, the Danes have the most extensive worker training program in Europe, successfully sustaining a high wage economy that enjoys a trading surplus with its neighbors. Denmark has also outpaced the US in exports. They have a 2.2 percent trade surplus compared to the 5.2 percent US chronic trade deficit.

There is one thought in the Kim-Cowan op-ed that every progressive completely agrees with: they say we can deal with growing deficits “only if we generate the kind of supercharged economic growth we had in the 1950s and mid-60s.” Exactly.

But how do these Third Way Democrats propose to achieve that kind of growth? Their program is austerity for the paycheck class (cutting spending on vital domestic investments) and tax cuts for business and the wealthy.

Right now, conservative Democrats, especially in the Senate, are resisting efforts to invest in more job growth – and efforts to help the states who are cutting back spending and firing public workers, making the economy worse.

Progressive Democrats are pushing for more spending on jobs. But Third Way austerity advocates in the Congress (and in the President’s deficit commission) want to slash spending (and cut Social Security and Medicare). All this threatens to choke off a still-fragile economic recovery. Their tax cuts for the wealthy reflect a trickle down economics that led us into our present straits, and ignore the reality of a tax code in which Warren Buffett, one of America’s wealthiest men, admits he pays a lower tax rate than his secretary. Kim-Cowan might want to check the tax rates of the 50-60s (which included a 90% upper tax bracket) before touting that as their model.

You would think Third Way Democrats, who post “growth and wealth creation” on their op-ed banner would spend a little time explaining the economic crisis that has just seen massive and dangerous economic contraction — and destroyed several generations of wealth. Instead they blame progressives who pushed for “entitlements.”

For three decades, government economic policy has been dominated by a conservative ideology that is not so much pro-business as obsequious to a set of business interests that ultimately had little to do with the long-term health of the national economy. It was an ideology that said we could send much of our manufacturing base overseas; see millions of living-wage jobs disappear and not be replaced with other secure, living-wage jobs; and still somehow prosper on a economy largely based on finance, information and services. It was an ideology that has given us an historic concentration of wealth at the very top — 65 percent of the income growth since 2000 has gone to the wealthiest 1 percent of the population, while median household incomes have dropped 4 percent when adjusted for inflation.

As it turns out, there is nothing pro-growth about tax cuts that further enrich the wealthy but starve our schools and allow our infrastructure to crumble. There’s nothing pro-business about having regulatory agencies turn a blind eye to Wall Street greed, in the mistaken belief that addicted gamblers will police themselves amid the glittering lights of the Wall Street casino. There is certainly nothing pro-wealth in the decades-long effort by conservatives to weaken unions and otherwise disempower workers; the “experiments to eliminate teacher tenure” that Kim and Cowan apparently applaud are but one example of the effort to treat workers as disposable and suppress their wages.

And it is more than a little bizarre to recycle the New Dem 1990 agenda for the economy coming out of the mess. “Experiments to eliminate teacher tenure” is but idle chatter at a time when literally tens of thousands of teachers, tenured or not, are facing layoffs in the brutal budgets of states and localities. Kim-Cowan support affordable college–but fail to note that despite passing the greatest increase in student aid since the GI Bill, soaring tuitions are pricing college out of the reach of more and more students.

The old nostrums of the right have been tried and failed. The New Dem/Third Way conservative light program offers no remedy. This country must, as the president has stated, build on a new foundation. The Kim-Cowan call to go back to the 1990s won’t get us there.

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Roger Hickey was a leader of the campaign to stop the privatization of Social Security, and he is a founder and member of the steering committee of Health Care for America Now. In the late 1980s, he and Jeff Faux created the Economic Policy Institute. 

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Follow Roger Hickey on Twitter: www.twitter.com/rogerhickey