Tag Archives: Pete Peterson Foundation

Obama’s Cat Food Commission, Alan Greenspan, and the Dancing Grannies for Medicare

President Obama’s Deficit Commission is all smoke and mirrors. Its members are making a big show of laboring over “painful” choices and considering all options in their quest to bring down the deficit. But  inside the Beltway everyone knows what’s going to happen: The commission will reduce the deficit on the backs of the old and the poor, through cuts to Social Security, Medicare, and Medicaid. Some opponents have taken to calling it the Cat Food Commission, since that’s what it’s victims will be forced to eat once the commission gets done slashing away at their modest entitlements.

In fact, the true intent of the Deficit Commission was evident before it was even formed. That intent was only driven home when Obama appointed as its co-chair Alan Simpson, who is well known for voicing, in the most colorful terms, what Paul Krugman calls the “zombie lie” that old-age entitlements will soon bankrupt the country.

So why the big show? Because neither Obama nor the Congress wants to get caught cutting Social Security and Medicare in public, certainly not before the November elections. (Medicaid will be cut as well, but politicians tend not to worry so much about poor people, since they don’t go to the polls in the numbers we geezers do.) So instead, they are foisting off this unpleasant task onto the Deficit Commission, showing what the lawyers call “due diligence,” sucking their thumbs and pretending to study how to cut the deficit. They’ve got $1 billion in walk-around money to pay for propaganda so the PR industry ought to be plenty happy. So too, should billionaire Pete Peterson, as he and his foundation lackeys push forward towards a victory in their longstanding attack on entitlements.

Quite frankly, if the Republican Right could get itself together and shove the Tea Party nuts back into their cave–as Reagan did with the crackpots hanging around him–they too could reap the benefits of the Cat Food Commission’s work. Ever since the New Deal, the Right has been kicking and screaming about Social Security. Things just got worse in the 1960s with Medicare and Medicaid. And now, thanks to our supposedly “socialist” president, they are within a few inches of cutting a nice hefty hunk out of the largest social programs this nation has ever known.

As one Capital Hill player recently wrote me: “Unfortunately, everyone in a position of power up here knows full-well the connection between Peterson, the commission and Simpson.  They either don’t care or are too afraid to say anything because they’ll appear ‘soft on deficits.’  It’s no different than their Iraq war votes…they believe they’ll appear ‘weak’ if they don’t jump on the bandwagon. The Democrats, (with the exception of Nancy Pelosi and only a handful of others–including commission member Jan Schakowsky), have no intention of taking on Peterson’s crew.  Congress may be  a lost cause on this issue, if the voters don’t get pissed off about the Commission fast.” 

Will enough voters get pissed off enough, soon enough to slow down the anti-entitlement juggernaut? It’s a long shot, at this point. There are signs of something like a small movement growing around the Cat Food Commission idea, and scattered protests (among them a demonstration dubbed the “Dancing Grannies for Medicare.”)

But it’s going to take a lot to waylay the likely course of future events:  The Cat Food Commission will undoubtedly recommend, and a lame duck Congress will pass, legislation that looks fairly innocuous: trimming Social Security a bit, maybe by upping the age by a few years, and cutting a little from Medicare–none of it affecting anyone who is over 65 right now. That will enable the politicians now in office to look like they are protecting seniors and fending off any drastic cuts, while at the same time appearing “tough” on the deficit. But the legislation, in the usual Washington mode, will gradually widen as the years go by, so that by the time this bunch of pols are retired (on their fat pensions) and out of the fray, the new rules will be eating  into entitlements in a big way.

The other side of this Faustian bargain would appear to be Congress passing some tax increases. “In setting up his National Commission on Fiscal Responsibility and Reform,” William Greider recently wrote in The Nation, “Barack Obama is again playing coy in public, but his intentions are widely understood among Washington insiders.” As Greider puts it, “The president intends to offer Social Security as a sacrificial lamb to entice conservative deficit hawks into a grand bipartisan compromise in which Democrats agree to cut Social Security benefits for future retirees while Republicans accede to significant tax increases to reduce government red ink.”

It remains to be seen how “significant” those tax increases actually turn out to be. But even former Federal Reserve Chair Alan Greenspan seems to be on board with this general plan. Greenspan’s credentials include chairing the first major entitlement-cutting commission back in the 1980s, as well as promoting the Bush-era tax cuts that helped the deficit grow to its current proportions. He still says that reductions to Medicare benefits are necessary–but in a recent interview in the New York Times, Greenspan also says that he now wants to remove all the Bush tax cuts. Seeing as it comes from the champion of “let them eat cake” economics, this pronouncement must be seen as predictor of how conservatives could end up voting. In short, the old and the poor will have to eat cat food, but the rich might kick in a few crumbs as well.

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Pete Peterson’s Anti-Entitlement Juggernaut

When Obama’s new deficit commission gets going, it intends to be “partnering“–in the words of executive director Bruce Reed –with outside groups. Among them will be the foundation run by Wall Street billionaire Peter G. Peterson, who on Wednesday will upstage the president with his own fiscal summit in Washington. Obama insists he is keeping an open mind about how to deal with the deficit and national debt–but as I’ve written before, he’s already stacked his own commission with people who lean heavily toward one particular solution: cutting entitlements. And now he is working hand-in-glove with a wealthy private organization whose central purpose is to cut Social Security and Medicare. Talk about foregone conclusions. 

Pete Peterson: Beating a Dead Horse

Peterson, according to Forbes, was the 149th richest man in America last year, with $2.8 billion in assets. During his long career he has been, among other things, CEO of Bell & Howell,  head of Lehman Brothers, a co-founder of the Blackstone Group, and head of the Council on  Foreign Relations. He was Nixon’s Secretary of Commerce, and in 1994 served on a Clinton bipartisan commission on entitlements and tax reform. He launched his own Peter G. Peterson Foundation with a grant of $1 billion.  

A fiscal conservative, Peterson has long been issuing dire warnings about the the nation’s skyrocketing debt. The key cause of the problem, in his analysis, is that entitlement programs–primarily Social Security and Medicare, but Medicaid as well–are out of control; the only solution is to cut them. Peterson is the self-appointed head of what some people have begun to call the “granny bashers,” who argue that greedy geezers are ruining the lives of younger generations with their unconscionable demands for basic healthcare and a hedge against destitution. (Peterson himself is in his eighties–but of course he’s too rich to worry about such things.)  

The granny bashers’ real agenda, of course, is to cut the social safety net programs that they have long abhorred–but they have gained far more ground with their intergenerational inequity claims than they ever would with a straight-out attack on Social Security and Medicare. The majority of the Washington punditry seem to have fallen for it–and so too, apparently, has the White House. A year ago in Newsweek, Peterson wrote: 

For the first time in my memory, the majority of the American people join me in believing that, on our current course, our children will not do as well as we have. For years, I have been saying that the American government, and America itself, has to change its spending and borrowing policies: the tens of trillions of dollars in unfunded entitlements and promises, the dangerous dependence on foreign capital, our pitiful level of savings, the metastasizing health-care costs, our energy gluttony. These structural deficits are unsustainable. Herb Stein, who served alongside me in the Nixon White House as chairman of the Council of Economic Advisers, once drily observed, “If your horse dies, I suggest you dismount.” And yet, we keep trying to ride this horse. 

In June, according to the Washington Post,  Obama’s deficit commission will be participating in a 20-city electronic town hall meeting, put together by an organization called America Speaks. It is financed by Peterson, along with the MacArthur Foundation and Kellogg Foundation. This is a truly unusual event because it marks the first time a presidential commission’s activities are financed by a private group that has long been lobbying the government on the very subjects the commission is supposed to “study.” 

The Peterson summit is crammed with luminaries in finance and government. First there’s the keynoter, Bill Clinton. Then there’s Alan Greenspan, the Federal Reserve chairman widely credited with getting us into our current economic mess, and Paul Volcker, his conservative predecessor at the Fed. Robert Rubin, Clinton’s secretary of the Treasury, and another pillar of the current economic debacle, will speak. So will Republican Congressman Paul Ryan, a leading GOP guru, who among other things wants to replace Medicare with a system of vouchers and tax breaks. Judd Gregg, the senior and probably most important conservative senator when it comes to finance, will be featured as well; he is a keen  proponent of Peterson’s entitlement cuts. 

The heavy hitters are all to be interviewed by big names in mainstream media: ABC’s George Stephanopolous will question his old boss Clinton; Leslie Stahl will speak with presidential commission co-chair Erskine Bowles, one of Clinton’s a White House chiefs of staff. Ranked below the big guys are a slew of lesser lights including some liberals like Lawrence Mischel of the Economic Policy Institute, Robert Greenstein of the Center for Budget and Policy Priorities, John Podesta of the Center for American Progress (and another former Clinton chief of staff), and former Congressional Budget Office head Alice Rivlin. 

All-in-all, it seems to be dominated by Clinton-era officials, who oversaw much of the Wall Street deregulation that nearly drove the country broke. These are the people who will now try to make up the losses on the backs of the poor and the old by rewriting the hard-won entitlement programs created during the New Deal and the War on Poverty. 

Meanwhile Obama–who seems to have learned nothing about strategy from the health care wars–will not say what he thinks about any of it. Instead, he prefers to sit on the sidelines and see what these people come up with–as if that horse wasn’t already out of the barn.

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