Buying deficit reduction

In a Bloomburg article this morning, Peterson’s $1 Billion Investment Shows Returns as Deficit Concerns Mount, reporters Max Berley and Brian Faler take a look at Wall Street billionaire Peter G. Peterson’s largely successful attempt to influence the discussion around the deficit, Social Security, and other social programs.

Peterson has committed $1 billion of the fortune he made as co-founder of the New York-based private-equity firm Blackstone Group LP to his personal crusade: raising the alarm about the $13 trillion national debt, Bloomberg Businessweek reports in its July 5 issue.

He is paying the bills at a foundation that bears his name, supports a network of like-minded advocacy groups, backs The Fiscal Times, an online newspaper, formed a commission of experts, and organizes conferences with marquee guests such as former President Bill Clinton. The crusade appears to be in sync with the concerns of most voters, with a June 4 Gallup poll showing that the federal debt and terrorism were tied for first place (at 40 percent each) as the biggest threats to Americans’ future well-being.

It may be that fears about the future damage of the federal debt do worry Americans. However, Peterson’s prescription–cut Social Security benefits, Medicare, and Medicaid–may not receive the same level agreement.

His fortune also was the major funder of the America Speaks national town meeting, Our Budget, Our Economy, last Saturday, which I attended.

Interestingly enough, while Beltway officials and pundits may be falling for the Peterson rhetoric around cutting priorities, the general public seems less gullible. Yesterday, Tom Frank, in his Op-Ed, Avoiding the Austerity Trap: Deficit reduction is an unhealthy obsession in the Wall Street Journal reported the results of the town meetings:

The event took place as scheduled last Saturday, with thousands of citizens meeting in different cities. They duly absorbed a booklet alerting them to the danger of deficits. They deliberated. And then something funny happened on the way to the consensus.

According to a preliminary compilation of results, participants supported “an extra 5% tax” on incomes of greater than $1 million per year (by 68%) and an increase in the corporate income tax rate (59%). They thought a “carbon tax” was a good idea (64%) as well as a “securities transactions tax” (61%). On Social Security, austerity was nowhere in sight as 85% backed raising the limit on taxable income, and only a miserable 27% thought that we should “create personal savings accounts.” Majorities favored cutting defense spending and expressed support for further recovery measures even if they increase the deficit.

These liberal results have been brought to you in part by a distinctly conservative foundation—bipartisanship at its best. Will Washington listen? Probably not. One reason we are rushing to austerity these days is because that’s what the comfortable people who chat so amiably in the green room are utterly certain we ought to be doing. The deficit numbers, they think, are just too big, too frightening. And deep in their hearts, they also know that the costs of austerity will always be borne by others.

It’s up to you and Speaker Pelosi

It’s up to you and Speaker Pelosi to protect Social Security.

If you signed our petition against the Conrad-Gregg Deficit Commission, or attended our January 14th conference in New York, or have watched the videos of the panel discussions on our web site, you know that there is a move afoot in Washington to blame the current federal deficit on Social Security. The program’s foes are using this as an excuse to suggest raising the retirement age, changing the program from an insurance program for all to a welfare program for the indigent, or cutting benefits in other ways.

While our petition signers and thousands of other private citizens, along with more than 60 national groups, managed to defeat the Conrad-Gregg proposal, President Obama has created a similar commission through executive order. Its co-chairs are retired Republican Senator Alan Simpson, a longtime foe of Social Security who called the program’s beneficiaries “greedy geezers” back in 1995, and former Clinton Chief of Staff Erskine Bowles. You can read more about the commission on this blog.

Based on the commission’s rules, Social Security will need to have at least five strong advocates on the commission (out of the total of 18 members) to block benefit cuts and potential dismemberment of the program. Of the nine members named so far, only two, Senator Dick Durbin and SEIU President Andy Stern, are known to be staunch defenders of Social Security. Of the nine remaining to be named, six will come from the ranks of Congressional Republicans, not likely to be supporters. It’s up to House Speaker Nancy Pelosi to make her three choices from those who will fight to maintain Social Security benefits.

We have written a letter to Speaker Pelosi, urging her to choose carefully and wisely:

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Dear Speaker Pelosi:

In the year of the 75th anniversary of Social Security–the centerpiece in the array of transformative social programs instituted by President Roosevelt and Labor Secretary Frances Perkins–we are concerned that this most successful government program is under attack.

Deficit hawks in Congress and inside the Beltway have found that Social Security is a fine scapegoat for the deficit, even though the program has contributed nothing to the current deficit. To the contrary, Social Security has helped to keep our country from falling into a Depression by providing income to millions of people who would otherwise be destitute. As you surely know, more than one-third of all people 65 and older rely on Social Security for 90 percent or more of their income.

The fiscal commission formed by President Obama’s executive order contains a number of known foes of Social Security. Some of them have stated, even before the commission has convened, that their goal is to reduce Social Security benefits or cut the program in some substantial way.

As House Speaker, you will choose three of the committee’s members. We urge you to select three representatives who understand and care deeply about the needs of working and retired Americans and their families, three members who will fight any efforts to raise the retirement age, lower benefits, drop benefits for children and spouses, enact an income cut-off, privatize, or in any other way diminish this great American program that has improved life for millions of Americans and been such a shining example of American values.

We know you hold these values and the program that embodies them as a sacred trust with the American people. Please ensure that your three choices will be a bulwark against the efforts of those who don’t share that trust or those values.

Respectfully yours,

Barbara Burt, Executive Director

The Frances Perkins Center

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Let Speaker Pelosi know how you feel about protecting Social Security today. Please write your own letter or feel free to adapt and personalize this one. You can send it to Speaker Pelosi at http://www.speaker.gov/contact.

Thank you for your help. Your voice makes a difference.

Washington Post parrots the Peterson “deficit reduction” line

In what’s turning out to be an embarrassing misstep, on December 31st the Washington Post printed a story created by The Fiscal Times, a paper funded by Pete Peterson, Wall St. tycoon, founder of the Concord Coalition and the Peter G. Peterson Foundation, and longtime opponent of social insurance programs such as Social Security.

Peterson has been one of the main forces behind a push to force a fast-track commission on the Congress that would propose cuts in social programs in the name of deficit reduction. He reportedly is spending tens of millions to influence members of Congress to support the commission.

The Washington Post article, Support grows for tackling nation’s debt, included this statement:

“I think there’s more interest in the proposal not only in Congress but at the White House because there’s a growing realization the deficit and the debt are reaching such levels they can’t be ignored any longer,” said Robert L. Bixby, executive director of the Concord Coalition, a nonpartisan group that advocates entitlement reform and balanced budgets.

Note that the spokesperson is the executive director of the Concord Coalition — another Peterson connection. The Post later appended this statement to their article:

Correction to This Article
The article by the Fiscal Times, about growing congressional support for a bipartisan commission to address the nation’s debt, contained a statement supporting the concept by Robert L. Bixby, the executive director of the Concord Coalition. The article should have noted that the Concord Coalition receives funding from the Peter G. Peterson Foundation. Peterson, but not his foundation, also funds the Fiscal Times, the independent news service that prepared the article.

The article’s attribution ran thus:

This article was produced by the Fiscal Times, an independent digital news publication reporting on fiscal, budgetary, health-care and international economics issues. Fiscal Times staff writer Adam Graham-Silverman contributed to this report.

After an outcry by many experts and organizations — many of whom have sent letters to Congress and the Administration opposing the establishment of a so-called deficit reduction commission — the Post’s ombudsman is looking into the issue.

The story has been picked up by many progressive blogs. Yesterday it hit the mainstream media: in its Media & Advertising section, the New York Times ran this article, Sourcing of Article Awkward for Paper.

The Times article reported on the conflict-of-interest angle but didn’t mention that the conflict of interest led to an inherently incorrect article, points of which has been soundly refuted. Here’s an excerpt from a letter signed by many social insurance experts and sent to the Post’s ombudsman:

Consistent with the bias of the founder, the story reports glowingly of the increasing support for a commission, failing ever to mention that over forty national organizations, including the AARP, the AFL-CIO, SEIU, National Organization for Women, Common Cause, to name just a few, have been outspoken in their opposition to the proposal.  Indeed, most readers would have no idea from this story that there was any opposition to the proposed commission whatsoever.