Tag Archives: Erskine Bowles

Obama’s Fiscal Commission Prepares to Carve Its Turkey

The dread report of the White House’s National Commission on Fiscal Responsibility and Reform is due out this week.  One of the Commission’s co-chairs, the putative Democrat and consummate wheeler-dealer Erskine Bowles, has been up on the Hill flogging their plan to reduce the debt by cutting the country’s already skimpy programs for the old, the sick, and the poor. His partner, motor-mouth Republican Alan Simpson, continues his ranting and ravings against the greedy geezers who want to sink the entitlement-cutting ship before it’s launched. Both of them have taken to boo-hooing because no one appreciates all the work they are doing to save the nation from certain fiscal doom, and nobody is willing to pitch in to meet this noble goal.

Fiscal Commission's Plan: Starve the Old to Stuff the Rich

Personally, I’m still waiting to hear how Wall Street is going to pitch in and do its part–or the people with high six-figure incomes who claim they still aren’t rich enough to give up their tax cuts. Or, for that matter, Bowles and Simpson themselves, who retired on fat  pensions and don’t have a financial care in the world.  Since none of this is likely to happen any time soon, we’d better take a good hard look at what these sanctimonious old coots have come up with.

We already know a lot about what to expect from the Fiscal Commission Plan, since the co-chairs released their own preliminary proposals (as yet unapproved by the 18-member Commission) earlier this month. According to people with access to the Commission’s thinking, they seem to think their best bet is to achieve consensus on a proposal to change the way Social Security’s annual cost of living increases (COLAs) are calculated. What seems like a mere accounting adjustment would, in reality, severely affect benefits over time. The National Committee to Preserve Social Security and Medicare explains the impact of this scheme:

This proposal will affect current and future beneficiaries uniformly.  The impact would occur after benefits are initiated, with each COLA, as the yearly increase in benefits would be slightly lower than would have been the case without the change.  The impact would be greater with each successive COLA.  For example, the Social Security benefits paid to someone collecting benefits for 10 years would be about 3 percent lower, on average, if the chained-CPI was used for the COLA instead of the current CPI-W.  After 20 years this reduction would reach 6 percent and 9 percent after 30 years.

This is is bad enough–especially since old people’s cost of living increases faster than the national average because of exploding health care costs. But of course, there’s more, in the form of a plan that would raise the retirement age to 67 and eventually 69. Working until you drop dead or  literally are forced out of the labor market is utilitarian nineteenth-century thinking. But at that time, at least there was an expanding need for workers in a burgeoning industrial capitalist economy. The one big profitable industry surviving in America today is so-called financial services, which consists of a small number of overpaid people passing money back and forth amongst themselves. They certainly don’t need any more workers, and if they do, they’ll get them in India. Vermont Senator Bernie Sanders said of the idea that it was not only “reprehensible,” but “also totally impractical. As they compete for jobs with 25-year-olds, many older workers will go unemployed and have virtually no income.”

There was no such ringing takedown of the plan, of course, from Senate Majority Leader Harry Reid, whose mealy-mouthed statement tells us what we can expect from our Democratic Senate. “I thank the leaders of the bipartisan debt commission for their work,” Reid said. “While I don’t agree with every one of their recommendations, what they have provided is a starting point for this important discussion. I look forward to the full commission’s recommendations and to working with my colleagues on both sides of the aisle to address this important issue.”

Nancy Pelosi had somewhat stronger words, calling the preliminary proposals “simply unacceptable”–but then, she’s nothing but the soon-to-be-ex-Speaker of the House. In fact, co-chair Simpson has been predicting, with something close to glee, the “bloodbath” that’s likely to ensue next spring, when the new Republican House refuses to extend the debt limit and threatens to send the nation into default “unless we give ’em a piece of meat, real meat, off of this package.”

When all is said and done, there’s pretty much no way this so-called debate will end up without most of us, old and young alike, getting screwed. An already stingy program that ought to be expanded to cover elders as their numbers grow instead  is going  to be reduced, and the only question is how and by how much. It makes no sense, but it may well have political traction because the pols can sell it as an attack on rich grannies–“the greediest generation” as Simpson calls the old–while the young are hoodwinked into thinking it’s good for them. And since its full effect will take  years to be felt, the current crop of opportunistic politicians will be long gone into splendid retirement by the time these young people realize how wrong they are. Alan Simpson was frank about this fact in the Washington Post on Friday, using another one of his nauseatingly folksy metaphors:

 It takes six to eight years to pass a major piece of legislation. . . . On a piece of legislation that you know is going to go somewhere someday, you want to get a horse on the track. That might be not much. Then the next session you want to put a blanket on the horse. Nobody’s paying attention then. Then you put some silks on the horse. Then you clean the outfield and the infield. And then you put a jockey on the horse in the sixth year, and you can win it. Because the toughest part is to do the initial thing, and so it’s usually so watered down, it’s just gum, you could gum it. Then you begin to build it the next year, the next year and then you get it done. That’s what I see.

And just in case you thought it couldn’t get any worse, consider this warning from Allan Sloan, Fortune’s senior editor, who wrote an op-ed in the the Washington Post on Thanksgiving day:

[P]rivatizing Social Security, slaughtered when George W. Bush proposed it five years ago, seems about to rear its foul head again. You’d think that the stock market’s stomach-churning gyrations – two 50 percent-plus drops in just over a decade – would have shown conclusively the folly of retirees’ having to bet their eating money on the market. But you’d be wrong. Stocks have been rising the past 18 months, and you can bet that we’ll see a privatization push from newly elected congressmen and senators who made it a campaign issue.

Why is privatizing Social Security such a turkey? Because retirees shouldn’t have to depend on the market’s vagaries for survival money. More than half of married couples older than 65 and 72 percent of singles get more than half of their income from Social Security, according to the Social Security Administration. For 20 percent of 65-and-older couples and 41 percent of singles, Social Security is 90 percent or more of their income. That isn’t projected to change.

Arrayed against these grim prospects are a small group in Congress, led in the Senate by Bernie Sanders and Sheldon Whitehouse of Rhode Island, and in the House by Jan Schakowsky of Illinois. Says Shakowsky

Social Security has nothing to do with the deficit. Addressing the Social Security issue as part of the deficit question is like attacking Iraq to retaliate for the 9/11 attacks – there is simply no relationship between the two and attempting to conflate them does a grave disservice to America’s seniors. Taking money from Social Security retirees whose average total income is $18,000 per year and average benefit is $14,000 ($12,000 for women) is simply wrong. It places them at fiscal risk and hurts the economy because they will be unable to purchase the goods they need.  Americans in poll after poll have indicated their opposition to benefit cuts – particularly at a time when Wall Street bankers are making record bonuses.’

Schakwosky has her own plan, which will be an antidote to whatever the Fiscal Commission comes up with. But her ideas are unlikely to make any headway in the lame duck Congress or with the Democratic leadership, as they wait, already on bended knee, for the coming of the Republicans.

Petition to Stop the Entitlement-Cutting “Catfood Commission”

Readers of Unsilent Generation may be interested in a new online petition directed at members of Congress, concerning the work of the National Commission on Fiscal Responsibility of Reform, which I’ve written about here many times before. Here is the introduction to the petition, which was started by Alternet. You can read the text of the petition, and sign it, here at Change.org

Right-Wing “Deficit Hawks” and their enablers are on a march to destroy the social safety net we built for our seniors and retirees. Shockingly, some of the most notorious advocates are actually in charge of the presidential commission that will soon determine the future of Social Security and Medicare. We need to stop them in their tracks! Join us in calling on Congress to Stop the Catfood Commission.

The National Commission on Fiscal Responsibility and Reform has been dubbed by progressives the “Catfood Commission” because its goal appears to be cutting benefits so drastically that retirees will only be able to afford to eat pet food. It’s hard to tell exactly what the commission is planning because its meetings are closed to the public and the press. Based on past statements and the background of its members the proposals are likely to include raising the retirement age to 70, turning large portions of Social Security over to Wall Street, and cutting Medicare benefits.

The commission’s co-chairman Alan Simpson, a former Republican senator from Wyoming, has stated he believes the founders of the Social Security program never expected anyone to actually live to 65 and collect. “People just died,” he has said. “Social Security was never [for] retirement.” Erskine Bowles, the other co-chairman, negotiated a secret but ultimately unsuccessful deal between Bill Clinton and Newt Gingrich to cut Social Security benefits. Any chances that the commission would make cuts to the US defense budget in its pursuit of fiscal responsibility seem slim owing to the fact that the CEO of Honeywell, a major defense contractor, is a member of the panel.

We can’t sit back and count on a Democratic-controlled Congress to protect our social safety net. Just a day before the July 4th holiday weekend, the House of Representatives passed a measure that would guarantee an up-or-down vote on the Catfood Commission’s recommendations in the current session of Congress if they pass the Senate. With this measure House Speaker Nancy Pelosi relinquished her power to prevent the vote from coming to the floor.

Your representatives need to hear from you NOW.  Let’s stop the Catfood Commission from raiding the Social Security trust fund and slashing medical benefits for current and future retirees.

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Simpson to Geezers: Bugger Off

On Tuesday President Obama formally launched a new commission that is supposed to bring down the national debt, in large part by investigating how entitlement programs, including Social Security and Medicare, can be cut back.

Obama told reporters at the White House he wouldn’t discuss the options at for bringing down the debt at this point. “We’re not playing that game,’’ Obama said. “I’m not going to say what’s in. I’m not going to say what’s out. I want this commission to be free to do its work.”

 The new commission, which is to file a nonbinding report by Christmas, has two co-chairs. Erskine Bowles, a former investment banker and Clinton chief of staff, is one of them. Alan Simpson, the quirky, conservative, longtime senator from Wyoming, is the other. The commission is supposed to be objective. But Simpson already has signaled that whatever happens, he wants to keep old people out of the process.

You remember the last time we corrected Social Security, and people calling me.  Let me tell you, everything that Bush and Clinton or Obama have suggested with regard to Social Security doesn’t affect anyone over 60, and who are the people howling and bitching the most? The people over 60.  This makes no sense.  You’ve got scrub out (of) the equation the AARP, the Committee for the Preservation of Social Security and Medicare, the Gray Panthers, the Pink Panther, the whatever.

In other words, the geezers should all shut up, since they will all be dead by the  time any entitlement reductions kick in. And what if they wanted to stick up for other old people in generations to come? Well, too bad. By the time those suckers hit retirement age, it’ll be too late to do anything. 

 

Obama’s Stealth Entitlement Commission

Less than a month after the Senate rejected a proposal for a bipartisan entitlement commission, President Obama has created his own version by executive order. It is not, of course, called an “entitlement commission”–that unsavory term has been banished from the political lexicon, since it clearly frightens the geezers. Instead, it is called the National Commission on Fiscal Responsibility and Reform. (Who wouldn’t support that?) The shorthand names are the “deficit commission” and the “debt panel.” This last term is remarkably similar to the much-maligned “death panels”–which seems appropriate, since its primary purpose is to pull the plug on old-age entitlements. Despite protestations to the contrary, the commission exists primarily to make cuts to Social Security and Medicare.

The commission’s slant is evident from the choice of its two co-chairs: former Wyoming Republican senator Alan Simpson, a long-time foe of entitlements, and Erskine Bowles, the middle- right former Clinton chief of staff. The rest of the 18-member commission will include 6 Republican and 6 Democratic members of Congress, and four more members named by Obama. They are supposed to make a report and recommendations to the president in December, after the fall elections, and Obama is expected to forward the recommendations to Congress.

In the best-case scenario, Congress will do the same thing it has done with all of Obama’s other proposed reforms–i.e. nothing. Because if it acts at all, it will almost certainly decide to pay down the deficit at the expense of the social safety net. While Social Security may be the proverbial “third rail” of politics, the other debt-reducing options–raising taxes on the rich, or making corporations pay their fair share–will be seen as even more deadly in the current political climate.

An aggressive move to cut entitlements is, of course, a long-cherished conservative goal. The Heritage Foundation has been promoting the idea for decades, and was a major cheerleader for creation of a Congressional entitlement commission. Billionaire anti-entitlement activist Pete Peterson has bankrolled a huge lobbying effort for a commission that could ready the cuts, then ram them through Congress on a fast track yes or no vote. When that idea ran into heavy opposition in the Senate, Obama came up with his comparatively toothless version.

The driving force behind the commission—in addition to Peterson’s determined lobbying– is a group of conservative Blue Dog Democrats, some of whom would most likely be just as happy to see Social Security privatized. They will likely join with Republicans to support cuts in Medicaid, Medicare, and Social Security.

This same alliance will also be key to a scaled-back health care reform, which looks to bypass altogether the so-called liberals in Congress. Instead, it depends upon senior conservatives in the Republican party, led by retiring New Hampshire Senator Judd Gregg. Gregg has said he thinks the health care system needs changing, and he wants to engage in “constructive dialogue” with the president on reform. But any plan Gregg champions will have to be relatively meager and inexpensive. The fiscally conservative Gregg  joined with Democrat Kent Conrad to support the Congressional version of a debt commission, and he now seems to making common cause with the perennial Democratic health care compromiser, Max Baucus.

The long and the short of this situation is that  the Democratic administration, along with a small group of conservative Democrats in Congress, may make considerable headway toward doing what neither Ronald Reagan nor George W. Bush was able to pull off. They will likely make cuts to Social Security, while at the same time advancing Obama’s government-subsidized “automatic IRA” scheme, which would divert people’s earnings into 401K-style retirement accounts. These, of course, would be invested by Wall Street, helping to rebuild the finance industry. So in the end, we could see a de facto privatization of a portion of Social Security–the ultimate conservative dream, brought to us by the Democrats.

By the same token, the Democratic-led health care reform is likely to bring about some cuts to Medicare and Medicaid–the only single-payer health care this nation has ever known. It will do so while preserving the power and wealth of the health care profiteers who are largely responsible for skyrocketing costs.  The corporations, once again, are set to emerge victorious.

Meanwhile, the old, sick, disabled, and poor, who rely on entitlement programs, will bear the weight of the national debt. The low- and middle-income people still reeling from the recession–who need more, not less, government spending–will be left out in the cold, victims of what the Center for Economic and Policy Research calls “the deficit hawks who distract the public and policy makers from the policies necessary to bring the economy back to full employment.” 

The people and policies responsible for running up the deficit look like the only ones who won’t be taking a hit. In a report released on Wednesday called “Where Today’s Large Deficits Come From,” the Center on Budget and Policy Priorities added up the numbers and found: “In fact, the tax cuts enacted under President George W. Bush, the wars in Afghanistan and Iraq, and the economic downturn together explain virtually the entire deficit over the next ten years.”