Tuesday, February 24, 2009

The anti-Social Security summit

Or rather, that's what the anti-Social-Security jihadists wanted it to be. So the title is too harsh a label for what actually went on at the "summit" Monday. The Obama White House has been playing this down. And they certainly aren't giving any clear indications that cutting Social Security is something they intend to try. Still, it's disturbing that they set up an event that gives anti-Social-Security dogmatists a way to boost their credibility and respectability.

It's a good sign that FOX News is complaining about the number of what it sees as labor and other liberal groups invited to the Fiscal Responsibility Summit (Special Interests Dominate Fiscal Responsibility Summit 02/23/09).

C-Span has recordings of the actual Fiscal Responsibility Summit available. I'll reiterate again some of the main points of orientation I apply to looking at events and proposals along those lines.

Protecting Social Security from benefit cuts or increases in the retirement age is the key thing Obama and all the Democratis should make their first priority in this "fiscal responsibility" discussion.

Health care costs are the key long-term problem for Medicare and Medicaid (not for Social Security). That problem has to be addressed by developing a workable universal health insurance coverage.

A key part of the anti-Social-Security plan from Peterson and his allies is to have "nonpartisan" or "bipartisan" commissions come up with recommendations to roll back the Social Security program that are then submitted to Congress to vote on an up-or-down basis with no amendments allowed. This is undemocratic, which is precisely why they propose it. Any attempt to roll back Social Security needs a full and open debate in Congress so that such an attempt can be stopped dead in its tracks.

Obama's presentations are particularly important parts of the summit record. His opening and closing remarks are available on the White House Web site: Remarks by the President and the Vice President at Opening of Fiscal Responsibility Summit, 2-23-09 and Remarks by the President in question and answer session at the closing of the Fiscal Responsibility Summit.

I'm not fond of the deficit-hawk rhetoric. But that's been standard Democratic economics for way too long. The Democrats need to get over that now. But that part was no surprise. And Obama's commitment to forgoing some of the budget tricks that Cheney and Bush used is welcome.

More concretely, Obama committed to supporting "pay-go" rules like those in the 1990s:

And we will reinstate the pay-as-you-go rule that we followed during the 1990s -- the rule that helped us start this new century with a $236 billion surplus. In recent years, we've strayed from this rule -- and the results speak for themselves. The pay-go approach is based on a very simple concept: You don't spend what you don't have. So if we want to spend, we'll need to find somewhere else to cut. This is the rule that families across this country follow every single day -- and there's no reason why their government shouldn't do the same.
This is bad economics and bad politics. Fortunately, he didn't try to take that approach in the Recovery Act. "You don't spend what you don't have" is one of those favorite truisms that the Beltway Village loves. But the economy doesn't work on that principle, and neither do the family budgets, another stock comparison that doesn't serve the Democrats well to keep encouraging. When individuals and business use credit, the do borrow money they don't have. Loans are also a way of getting "money that you don't have".

And in a severe recession like this one, what we need is for the government to run deficits to stimulate the economy, i.e., to "spend what you don't have" by borrowing from China and other lenders. The Secretary of State was in China trying to ensure that relations stay good enough that we can keep that borrowing relationship with them going.

He did make a point of saying that health care is "the single most pressing fiscal challenge we face by far, to the long-term solvency of Social Security". I'm willing to assume he's trying to focus on health care as the real "entitlements" problem. But what he says there doesn't make any sense. Or rather, it's plainly not the case. The rising cost of health care affects Medicare and Medicaid, and not Social Security. Blurring those disctinctions only helps the anti-Social-Security crusaders.

He should also not encourage dishonest talk about Social Security "solvency". The program is set up so that if a point is reached where current benefits can't be funded from available Social Security funds, then benefits have to be cut to keep them within balance. In any case, the Social Security Trust Fund is currently running a large surplus to finance the baby boomer retirement demands in the coming decades. Talking about threats to the "solvency" of Social Security also plays into the game of the anti-New-Deal Neanderthals.

The most important thing missing from Obama's presentations was a straight-forward defense of Social Security. And that's a big part of what he was elected for. It's his job and that of the rest of the Democrats to defend Social Security against billionaire plutocrats and the Rush Limbaugh cheering squad. And I'm not seeing that in Obama's presentations from Monday. Instead, there was this Mugwump statement from the public session at the end:

There was a healthy debate on Social Security, but also a healthy consensus among some participants, including Congressmen Boehner and Hoyer as well as Senator Graham and Senator Durbin, that this was a moment to work in a bipartisan way to make progress on ensuring Americans' retirement security. And I think one of the things we want to do is to figure out how do we capture that momentum.
With Pete Peterson's well-funded drive to wreck Social Security going on, and with Peterson's wreckers even being invited to the Fiscal Responsibility Summit instead of being shunned like the bubonic plague, vagely platitudes about working "in a bipartisan way to make progress on ensuring Americans' retirement security" just doesn't cut it. Working in a bipartisan way on Social Security means slashing benefits. And that would be the worst kind of betrayal of the Democratic base if Obama gets drawn into something like that.

On the other hand, vague bipartisan platitudes are just that. And it's very possible that he was trying to put the best face on an ill-conceived feel-good meeting. He certainly stressed that controlling health care costs was his priority: "Over the longer run, putting America on a sustainable fiscal course will require addressing health care." And that means expanding health care coverage, not hacking up Medicare and Medicaid, and certainly not touching Social Security.

The White House transcript includes the statements by participants on whom Obama called. Obama recognized that bold Maverick McCain to talk about cutting Pentagon waste - something with which McCain has actually done some constructive things. But the major savings in defense would come from substantive changes in foreign policy that reduces our plans for intervening in all kinds of conflicts all over the world. And one that recognizes the limits of American power. (Two heavily overlapping considerations.)

The best thing in either transcript about Social Security is from Heidi Hartmann, President of the Institute for Women's Policy Research, who said the Social Security panel had a consensus there should be increases in benefits, at least for some of the lower-income recipients.

William Novelli, CEO of the AARP, focused on how controlling health care costs as the key issue. Obama has a White House Health Care Summit scheduled for next week.

John Castellani, President of the Business Roundtable, talked nicely but vaguely about the need for health care reform.

Andy Stern, President of the Service Employees Internation Union (SEIU) said nice things about Castellani and Novelli.

I heard a couple of Republican Members of Congress pitching for "bipartisanship" while complaining about Obama's alleged failure to promote it enough on the Recovery Program.

Obama responded to one of those complaints, "On the one hand, the majority has to be inclusive. On the other hand, the minority has to be constructive."

For me, that was his best moment of the day!

David Walker, head of billionaire Social Security opponent billionaire Peter Peterson's foundation dedicated to abolishing the New Deal, was also there, sad to say. Obama asked him to make a comment - Andy Stern was the one he called on next - and here was Walker's response:

You touched in your remarks on our balance sheet. As a former comptroller general of the United States I can tell you we're $11 trillion in the hole on the balance sheet. And the problem is not the balance sheet, it's off the balance sheet -- $45 trillion in unfunded obligations.

You mentioned in January about the need to achieve a grand bargain involving budget process, Social Security, taxes, health care reform. You are 110 percent right. We need to do that. The question is, how do we do it? Candidly, I think it's going to take some type of an extraordinary process that engages the American people, that provides for fast-track consideration. And with your leadership, that can happen. But that's what it's going to take, Mr. President.
The Peterson group are clean-shaven reactionaries, not the Republican hate-radio bloviator types. But they're putting big bucks into trying to destroy Social Security. Special processes, in the Peterson respectable Neanderthal vocabulary, is a euphemism for those "bipartisan" commissions making up-or-down recommendations to Congress. (Apologies to our long-extent cousins the Neanderthals for associating them with the anti-Social-Security jihadists.)

That highbrow bum Walker also said on CNBN that "extraordinary processes" were needed to get the bipartisan agreements required to "reform" Social Security, Medicare and Medicaid. He also said we need to reform Social Security and make it "more savings-oriented". And also, "The last thing you want to do is expand entitlements."

Actually, Mr. Anti-New-Deal Reactionary, incresing Social Security benefits and expanding the kind of medical coverage available through Medicare and Medicaid are probably the most important economic moves we need to make.

Cokie Roberts on NPR managed in commenting on the summit managed to reproduce the crackpot notion that Social Security is in financial trouble in this NPR broadcast.

I know that the politics stemming from the Republicans' newly-rediscovered arguments about the horrors of budget deficits - if you believe they're serious about that I need to tell you about an opportunity to help the son of an African dictator smuggle money - and the Blue Dog Democrats concern about the same. The Blue Dogs position, sadly, is probably more seriously held than by the Republicans.

Still, the Democrats need to push hard to dissipate this conservative fixation on the virtues of balancing the budget. How widespread this toxic notion has become is illustrates by this discussion on the PBS Newshour, where even the two pro-Obama participants are insisting on the virtues of budget-balancing: Obama's Vow to Halve Deficit Puts Focus on Budget Plan 02/23/09.

If Jamie Galbraith is right - and he usually is about these things - this deficit-hawk nonsense is spectacularly misguided.

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