Link to our statement on the Deficit Commission Report

FPC on DeficitCommissionReport

Slide show responding to the deficit commission’s chairmen’s report

Dan Froomkin, senior Washington correspondent for the Huffington Post, posted this slide show: http://www.huffingtonpost.com/2010/11/10/deficit-commission-proposal_n_781905.html#s179447. It’s worth a look.

Two important documents released today

The co-chairs of the president’s deficit commission made a surprise announcement of a press conference today. During the press conference they released a preliminary report–the “Co-Chairs’ Proposal”–on the commission’s potential recommendations, which have not been endorsed by commission members (or the president). The report calls for changing the way Social Security benefits are indexed, tying them to inflation rather than wages. Since the tax is on wages, it seems logical to tie the benefits to wages. A change to inflation would create significant cuts in benefits, particularly as many seniors’ expenses result from items such as prescriptions, which increase in cost far faster than the general inflation rate.

The report was leaked to Bloomberg and as a result, Bloomberg reported:

* Nobody but Bowles and Simpson endorses this

* The plan “will propose cuts to Social Security and Medicare, as well as reductions in income tax rates in exchange for curbing tax breaks,” according to a GOP aide who attended the meeting.

* Jan Schakowsky says “this is not a package I could support.”

* Durbin says there is not going to be “an up or down vote” on this.

You can read the document here:
http://www.fiscalcommission.gov/sites/fiscalcommission.gov/files/documents/CoChair_Draft.pdf.

It is odd that this press conference was held without prior notice and while the president is out of the country. Here’s the president’s press office response:

—————–

THE WHITE HOUSE
Office of the Press Secretary
___________________________________________________________
For Immediate Release                                           November 10, 2010

Statement on the Initial Bowles-Simpson Bipartisan Fiscal Commission Proposal

“The President will wait until the bipartisan fiscal commission finishes its work before commenting. He respects the challenging task that the Co-Chairs and the Commissioners are undertaking and wants to give them space to work on it. These ideas, however, are only a step in the process towards coming up with a set of recommendations and the President looks forward to reviewing their final product early next month,” said White House spokesperson, Bill Burton.

——————-

Note: This is certainly no endorsement of the proposal.

Exit polls from last Tuesday elections released today showed that the vast majority of voters do not want to cut Social Security benefits: http://tpmdc.talkingpointsmemo.com/2010/11/poll-voters-would-rather-tax-the-wealthy-than-cut-social-security.php

Finally, perhaps lost in the hullabaloo around the chairs’ draft report is this OTHER report, released today by the National Academy of Social Insurance (NASI), “Strengthening Social Security for the Long Run.” Janice Gregory, president of NASI, had an excellent OpEd in The Hill today, discussing some of the points of the report. Check out the report as well as a useful PowerPoint presentation from the NASI presentation this morning: https://www.nasi.org/events/126/event-presentations.

Sure seems as though it would be better to have the nonpartisan experts at NASI figuring out how to ensure Social Security’s longevity than the two chairs of the deficit commission, both of whom approached their work from a “we must cut Social Security” perspective.

Good news, bad news

We often ask ourselves, “What would Frances Perkins do?” as we watch the news from Washington. Here are two stories that bring up that question. You can easily guess what her response to each would be.

The good news first: President Obama is starting to speak out on the economy and jobs:

Mr. Obama’s newest proposals to help the flagging recovery, like his earlier proposal for a small-business bill, include ideas that typically have strong Republican and business backing. The new proposals, which the administration had previewed in the days before his speech on Wednesday, would increase and make permanent a tax credit for businesses’ research expenses, allow businesses to write off the full costs of equipment purchased through 2011, and provide $50 billion more for infrastructure construction projects. [from the NY Times]

It’s not a sweeping proposal on the scale of the WPA, but it’s a move in the right direction.

Unfortunately, behind closed doors, secret negotiations are taking place that may ultimately weaken and diminish one of the most effect economic programs the U.S. has, Social Security. According to Richard Eskow in the blog of the Campaign for America’s Future, back-channel sources say that:

the Deficit Commission is finalizing a deal that would increase Social Security benefits slightly for low-income recipients while cutting them for everyone else. The Commissioners apparently believe that putting this “progressive” gloss on a package of unneeded cuts would allow them to move forward with their predetermined anti-Social Security agenda. This new proposal would pit middle-class seniors against the elderly poor, forcing them to compete for a stripped-down pool of dollars. The end result would be the one that many Commission members have pursued for years: to cut the most stable and successful program in the Federal government’s history.

Here are a few reasons why this idea is such a bad one:

First and foremost: Social Security and the deficit don’t belong in the same sentence. The fact that this group is fiddling with Social Security is a travesty. Social Security BY LAW cannot run a deficit; therefore, it can’t contribute to the federal deficit.

Second: How does the president’s commission get off tinkering in secret with a program that touches every single working person in the United States? Any proposals changing the way Social Security is run should be made in the blazing sunlight. Its millions of participants need to know what is going on. In fact, we know how voters feel about Social Security — they don’t want to cut it. Eskow quotes some recent poll results.

Third: Social Security’s financial condition is monitored very closely. Every year, the trustees issue a report on its health. This year, the trustees stated that the system could pay full benefits for the next quarter century or so with no changes to the current system. There is no need to panic; there’s plenty of time to act prudently and cautiously. In addition, if new revenue is desired, the easiest change would be to lift the cap on contributions. Right now, if you make more than $106,800, you don’t pay Social Security tax on that additional income. Lifting the cap would be easy from an administrative standpoint and would provide enough income to take us well beyond the next quarter century.

Finally, I really like this point that Eskow makes:

If this were a public debate and not a secret one, this latest move could be used to start the debate we should be having: Why don’t we strengthen and increase Social Security, rather than cut it?

Is this a Saturday Night Live skit?

For months, advocates for Social Security have been decrying the appointment of longtime Social Security foe Alan Simpson as co-chair of the president’s deficit commission (which shouldn’t even be discussing Social Security, but that’s another issue).

Now they’re calling for his resignation.

In an email to Ashley Carson, who is executive director of OWL, written in response to a Huffington Post piece by Carson, Simpson characterized Social Security this way:

We’ve reached a point now where it’s like a milk cow with 310 million tits!

He also insulted Carson by suggesting that she should “call me when you get honest work.”

Simpson has already demonstrated a lack of knowledge of the program in a video rant (see below). His antics would be funny, if they didn’t threaten to harm the program that provides vital benefits to millions of Americans.

The National Council of Women’s Organizations is calling for Simpson’s ouster. You can read more about his offensive letter and their petition here.

Reason to be wary

Lori Montgomery, writing in the Washington Post this morning, explains why Social Security’s supporters (which actually include the vast majority of Americans), are concerned about the president’s deficit commission.

Commission members have declined to say what options they are considering, repeating the Obama mantra that everything is “on the table.” But options for Social Security are no secret: In addition to boosting taxes, the lengthy list includes raising the retirement age for people now in middle age and trimming benefits for the wealthy.

In a common refrain, Eugene Steuerle, a senior fellow at the Urban Institute, makes the claim that Social Security is taking money from future generations.  “Is your 20th year in retirement a higher priority than educating your kids in the schools?” he asks. But this argument misses the point: what will be the effect on future generations if they are asked to provide support for their aging relatives? In addition, a cut in benefits today means a cut in benefits for generations to come, as well.

Montgomery allows Social Security’s supporters to present their case:

At Social Security Works, Altman, a former tax lawyer who taught at Harvard University and assisted former Fed chairman Alan Greenspan on a 1982 commission credited with temporarily restoring Social Security’s solvency, argues that there are better options than cutting benefits. Raising the income cap for Social Security taxes or imposing a tax on Wall Street transactions, she said, would raise enough to keep the program solvent for years.

“This is not a crackpot side of the debate,” Altman said, citing polls showing broad public opposition to benefits cuts, even among conservatives. “My goal is not to further undercut people’s confidence in Washington. But I don’t feel like I can just be quiet when they are about to do what I feel is a real disservice to the American people.”

The president’s deficit commission can’t speak for me

The 18 commission members have been named to the National Fiscal Commission. Fait accompli. But that doesn’t mean that those of us who feel inadequately represented can’t point out the problems with the current cast. As a woman, I feel particularly invisible to this commission.

President Obama had the prerogative to name six commission members. Two of his appointees are women, Alice Rivlin and Ann Fudge. Republican Congressional leadership named six members, all male. Democratic Congressional leadership named six members, only one of whom is a woman–Congresswoman Jan Schakowsky–appointed by House Speaker Pelosi.

Does it matter?  You bet it does. In purely political terms, since it takes 14 out of the 18 members to make a recommendation, there aren’t even enough women members to stop the rest of the group from making recommendations that hurt the economic interests of women.

It matters also when it comes to perspective. Women make up more than half of the population and they rely disproportionately on Social Security and Medicare. Fifty-seven percent of all Social Security beneficiaries age 62 and older are women, and 69 percent of beneficiaries age 85 and older are women. Because we tend to have lower incomes with fewer resources and more chronic conditions than men, Medicare is a crucial source of our retirement security. More than half of all Medicare beneficiaries are women; among those 85 and older, 70 percent are women.

Yet, out of 18 commission members charged with looking at ways to cut the federal deficit with a focus on programs like Social Security and Medicare, only three are women. That’s a measly 17 percent speaking for more than 50 percent of the American population.

It took a strong woman, Frances Perkins, President Roosevelt’s secretary of labor, to win the fight for social insurance programs like Social Security back in the 1930s. She took on the job of secretary of labor because, she said, “The door might not be opened to a woman again for a long, long time, and I had a kind of duty to other women to walk in and sit down on the chair that was offered, and so establish the right of others long hence and far distant in geography to sit in the high seats.”

I know there are some good men among the commission members who will watch out for the economic interests of women. But I thought that by 2010 we would be beyond the days of looking for good men to take care of us. Paternalism is passé. It’s time to let us speak for ourselves, to let more of us sit in the high seats.

Federal deficit found to be an accounting error

The president had some positive news for the nation this morning in his breakfast address from the Rose Garden. “There is no deficit,” he said. “A CBO staff member had placed a negative sign in front of a large sum when transferring figures from another column.”

When asked the effect of this news on his plans, the president conceded that there was no need for the Fiscal Commission that he has recently assembled.

For more, read here.

Social Security foes named to president’s Fiscal Commission

As feared, the Republican picks for the deficit commission are avowed opponents of Social Security. House Minority Leader Boehner has named Reps. Dave Camp (MI), Paul Ryan (WI) and Jeb Hensarling (TX) to join the 18-member commission. Ryan has already made his position clear with his earlier-released  “Budget Roadmap,” which Jonathan Chait in the New Republic characterized this way:

Ryan’s plan would make the federal tax code regressive, especially at the top, on top of an already-regressive state and local tax base. According to the Tax Policy Center, the richest 1% of all taxpayers, who earn more than 21% of the national income and currently pay about 25% of federal taxes, would pay 13% of federal taxes under Ryan’s plan. (Ryan’s response argues that the corporate income tax he’d eliminate is already born by consumers anyway, a contention most economists including the CBO reject, and even if true would only chip away slightly at the overall critique of his plan’s regressive nature.) Ryan’s tax plan alone would amount to the greatest shift of resources from the non-rich to the rich in the history of the United States, by far.

And that is just the beginning. Ryan would impose a series of dramatic social policy changes that would all push in the same direction. He would blow up the employer-based health care system, pushing workers into an under-regulated individual market. Instead of sharing medical risk with their fellow employees, they’d bear it entirely by themselves, which would be good for the healthy but bad for the sick. He would convert Social Security into primarily a network of individual investment accounts [my emphasis]–meaning that some workers would do well and others poorly. And he would convert Medicare into a voucher system, capping the value of each voucher at well below the rate of medical inflation, which would make the elderly bear a far greater share of medical risk.

It seemed as though Ryan’s Republican colleagues were distancing themselves from his plan, but now it has been fully legitimized by his appointment to the commission.

On the Senate side, Minority Leader Mitch McConnell has named Senators Gregg (NH), Crapo (ID) and Coburn (OK) to the commission. Gregg and Crapo are known fiscal hawks.

We await the word on Speaker Pelosi’s three appointees.Here’s what USAToday said at 3:15 this afternoon:

Pelosi spokesman Nadeam Elshami said the speaker “is discussing with a number of members who have expressed interest in serving on the commission because of their commitment to fiscal responsibility. The speaker will make those appointments when she has completed those discussions.”

Commitment to fiscal responsibility? What about commitment to social responsibility? So far, out of the 15 named to the commission, only one is a woman and none are non-white. More than half of Social Security recipients are women, and certainly more than zero of recipients are non-white. Only two of those commission members named so far are known to be strong supporters of Social Security. It looks like the fate of this hugely important and successful program is in the hands of a group of officials who hold it in disdain.

The program’s defenders, like us, have a big fight on our hands. Who will be today’s Frances Perkins to lead the battle for our side?

Pressure on Pelosi regarding her commission picks

On Monday we sent out an email to friends of the Frances Perkins Center asking people to write to Speaker Pelosi and urge her to choose three staunch supporters of Social Security for the president’s fiscal [deficit] commission. You can read why here.

There’s some news on that front–evidently the Blue Dogs are trying to pressure her to give them a seat on the commission. In return for what? A yes vote on the healthcare bill, perhaps?

So, if you were thinking of writing to Speaker Pelosi about her choices, please do it today. There isn’t a minute to waste!

CQ POLITICS NEWS
March 10, 2010 – 1:33 p.m.

Blue Dogs Push for Seat on Fiscal Commission

Leaders of the fiscally conservative House Democratic Blue Dog Coalition have asked Speaker Nancy Pelosi to appoint at least one member of their group to the president’s fiscal commission.

…

“As Blue Dogs, we strongly supported this commission as a necessary mechanism to tackle the fiscal challenges we face,” leaders of the 54-member group said in a letter to Pelosi. “We believe a member of the Blue Dog Coalition would bring the invaluable contributions and a critical perspective to the recommendations sent to Congress before the end of the year.”

The coalition is made up of centrist Democrats who have made deficit reduction and balanced budgets their organizing principle. Many represent districts that are prime targets for Republicans this fall, and they are bracing for GOP attacks on their party.

Pelosi has so far kept close counsel on whom she will select for the panel. There is a lot of interest among the rank-and-file in serving on the panel, aides said.

Read the entire article here.