A Sensible “Deal for All” Challenges the Dreaded “Simpson-Bowles”

Left Margin

A Sensible “Deal for All” Challenges the Dreaded
“Simpson-Bowles”

By Carl Bloice – BC Editorial Board
BC
July 26, 2012

http://www.blackcommentator.com/482/482_lm_deal_for_all_share.html

The real losers would be seniors, sick poor
people, the unemployed, and people with
disabilities.

A highly placed journalist spoke up boldly over the
weekend on behalf of the country’s serious people,
“those of us who crave a little common sense,” who
are feeling a bit of “despair,” right now because the
nation’s capital has become “a sludge pit of
dysfunction.” This state of affairs, wrote New York
Times former executive editor. Bill Keller, could be
attributed to “Republican cynicism, Democratic
fecklessness or presidential disengagement.”

“Talk to any credible economist, wire any serious
politician to a polygraph, and you will hear at least
80 percent agreement on what is to be done:
investment to goose the lackluster recovery and
rebuild our infrastructure, entitlement reforms and
spending discipline to lower the debt, and a tax code
that lets the government pay its way without stifling
business, punishing the middle class or rewarding
sleight of hand,” wrote Keller in theTimes July 21.
The problem, he asserted, is the failure of the
responsible people to come up with a “grand
bargain,” the outline of which is pretty much
summed up in (a little drum roll here) our old friend,
the magic elixir; “Simpson-Bowles.”

It just won’t go away. Its promoters continue to use
a nonexistent “Simpson-Bowles” report from the
failed Presidential deficit reduction commission as
the code for what a powerful group among the
nation’s political and economic elite want to enact
by hook or by crook, whether we the people want it
or not.

Ask your member of Congress if he or she will also
co-sponsor the resolution.

What the country really needs is real investment to
spur the economy, changes in the tax code that go
beyond sloganeering and actually raise more money
and reduce the tax burden on working people. And
paring down the bloated military budget would
represent real “spending discipline.” However, the
real thrust of the proposed “bargain” lay in proposed
“entitlement reforms.” When and if this proposed
bargaining is concluded, the real losers would be
seniors, sick poor people, the unemployed, and
people with disabilities. That’s all spelled out in the
incessantly cited report that really only amounts to
the ideas of Mr. Simpson and Mr. Bowles.

Commission co-chair former Senator Alan Simpson
has been laying low in recent weeks. His acid tongue
hurling gross insults at senior and disability
advocates has clearly embarrassed those in high
circle for whom he speaks. But former Clinton
Administration operative, Erskine Bowles, has been
quite active of late. According to Keller, he’s been
going around “quietly” proposing that President
Obama treat the budget battle expected in January
as an opportunity to ram through “Simpson-
Bowles.”

“The president should head straight for the cliff and
let Congress know he’s prepared to take us over the
edge unless they build a bridge,” Keller wrote.

He continued, “In other words: President Obama
should declare now that unless Congressional
leaders come up with a serious bargain on fiscal
reform, something very like Simpson-Bowles, he will
allow all of the Bush tax breaks to lapse and all of
the draconian cuts to take effect.”

“.the Deal for All would end tax breaks for the
richest 2 percent, close tax loopholes for the wealthy
and special interests, and ensure Americans don’t
lose the benefits they’ve paid into for decades such
as Social Security and Medicare”

In essence, what Keller is proposing is that Obama
become the advocate of a plan that would seriously
undermine Medicare, Social Security and Medicaid
and then hold the budget process hostage until the
Republicans agree to it. That’s the scheme Bowles is
pushing and “some” of the President’s “fellow
Democrats are starting to warm to the idea.” (One of
them is House Speaker Nancy Pelosi who has
shocked and dismayed a lot of people in the district
she represents by expressing an inclination to
embrace “Simpson-Bowles”).

“But does Obama have it in him?” asks Keller, co-
director of the Center for Economy and Policy
Research. “This is the kind of tactic Lyndon
Johnson would have employed with relish. You can
imagine Bill Clinton pulling it off. President Obama,
whether out of diffidence or inexperience, has not
shown a comparable audacity or mastery of political
leverage.” The right answer is more likely that the
President is just showing good sense.

“Steven Pearlstein, the Washington Post business
columnist, often writes insightful pieces on the
economy, not today,” economist Dean Baker wrote
last Sunday regular blog, “Beat the Press.” “The
thrust of his piece is that we all should be hopeful
that a group of incredibly rich CEOs can engineer a
coup.”

“While the rest of us are wasting our time worrying
about whether Barack Obama or Mitt Romney is
sitting in the White House the next four years,
Pearlstein tells us (approvingly) that these honchos
are scurrying through back rooms in Washington
trying to carve out a deficit deal.

“The plan is that we will get the rich folks’ deal
regardless of who wins the election. It is difficult to
imagine a more contemptuous attitude toward
democracy.” “Thomas Friedman is once again
pushing to cut back those lavish $1,100 a month
Social Security benefits and to make seniors pay
more for health care”

“The deal that this gang (led by Morgan Stanley
director Erskine Bowles) is hatching will inevitably
include some amount of tax increases and also large
budget cuts,” continued Baker. “At the top of the
list, as Pearlstein proudly tells us, are cuts to Social
Security and Medicare. At a time when we have seen
an unprecedented transfer of income to the top one
percent, these deficit warriors are placing a top
priority on snatching away a portion of Social
Security checks that average $1,200 a month. Yes,
the country needs this.”

“Just about everything in Pearlstein’s piece is
upside down,” wrote Baker. “Of course the major
problem facing the country at present is massive
unemployment. If the economy was near full
employment we wouldn’t have a big deficit. The
long-term story behind the deficit projections is of
course projections of exploding private sector health
care costs, as every budget analyst knows. That
should lead to a discussion about fixing the health
care system, not a discussion of the budget.”

Bowles appears to have recruited another finance
titan to his cause. On July 17, Lloyd Blankfein, CEO
and chairman of Goldman Sachs, wrote inPolitico,
“Realistically, while few expect a fiscal reform
agreement before the November election, we should
not discount the value of a declaration by
congressional leaders of both parties, as well as
President Barack Obama and former Massachusetts
Gov. Mitt Romney, that Simpson-Bowles will be the
basis of future reform. Simpson-Bowles presented a
serious, responsible and bipartisan effort to improve
the long-term fiscal outlook. Embracing its broad
conclusions will send the right message to investors
and corporate managers that we will make progress
on our long-run budget challenges – and that now is
the right time to commit capital and invest in the
U.S.”

Blankfein made a sizable contribution to the 2008
Obama Presidential campaign. He reportedly has
thus far made no donations in this year’s race. On
the day after his Politico article appeared, he had
lunch with the President’s chief of staff, Jack Lew,
who was once a honcho at Citigroup, where he
oversaw a hedge fund.

Interestingly, a major portion of Blankfein’s
commentary dealt with another reoccurring theme
in the program of the high finance rulers of the
universe: loosing the country immigration rules to
allow in more skilled technical workers.
Coincidently, New York Times columnist, Thomas
Friedman, wrote July 1: “If we can just get a few big
things right today – a Simpson-Bowles-like grand
bargain on spending and tax reform that unleashes
entrepreneurship, a deal on immigration that allows
the most energetic and smartest immigrants to
enrich our country and a plan on energy that allows
us to tap all these new sources in environmentally
safe ways – no one could touch us as a country.
Connect the dots for people, Mr. President – be the
guy taking the risk to offer that big plan for
American renewal, and Romney will never be able to
touch you.”

“Thomas Friedman is once again pushing to cut
back those lavish $1,100 a month Social Security
benefits and to make seniors pay more for health
care,” economist Baker wrote the same day. “That is
the implication of his enthusiastic support for the
proposal set forward by Morgan Stanley director,
Erskine Bowles, and former Senator Alan Simpson.

“This plan calls for Social Security cuts of roughly 3
percent for near retirees by reducing the annual cost
of living adjustment. It promises further cuts down
the road by rising the retirement age and reducing
benefits for middle income workers like school
teachers and firefighters. It would also sharply
reduce spending on Medicare, which could lead to
seniors paying much more for their care.”

A new elite group, “Fix the Debt,” has come into
existence for the expressed purpose to pushing
“Simpson-Bowles.” It held a press conference July
17 and the Washington Post reported, “Later that
evening, at Honeywell’s Washington office, over a
salmon dinner with the floodlit Capitol dome as a
backdrop, the executives huddled with their
political co-conspirators: Simpson and Bowles,
Warner and Saxby, and Rep. Steny Hoyer, the No. 2
Democrat in the House. Also on board: Simpson-
Bowles commissioners Dick Durbin, the No. 2
Democrat in the Senate, and Andy Stern, former
president of the Service Employees International
Union.”

The Post said the group, plans to raise up to $100
million, “mostly from big corporations, to build
public support for a debt deal and flush out its
details so it can be acted on by Congress sometime
after the November elections.”

The right answer is more likely that the President is
just showing good sense.

Congressional Progressive Caucus leaders Reps.
Raul Grijalva, D-Ariz., and Keith Ellison, D-Minn,
recently issued a joint statement that said,
“Congress is gearing up for high-stakes tax and
budget negotiations, and we’re standing with
working families to make sure we build a stronger
and fairer economy. While both parties will need to
make sacrifices, we cannot do so at the expense of
economic growth or the middle class. A balanced
approach like the Deal for All would end tax breaks
for the richest 2 percent, close tax loopholes for the
wealthy and special interests, and ensure Americans
don’t lose the benefits they’ve paid into for decades
such as Social Security and Medicare.”

As described by Isaiah Poole, editor, OurFuture.org
at the Campaign for America’s Future, the “Deal for
All” proposal would protect Social Security,
Medicare and Medicaid; contain “serious revenue
increases,” including corporate tax loopholes and
higher tax brackets for the highest-income earners;
significant reductions in defense spending; and
“strong levels of job-creating Federal investments in
areas such as infrastructure and education.”

Last week, Poole noted that The “Deal for All”
“stands in sharp contrast to the Bowles-Simpson
deficit reduction plan, ” and concluded, “Many
Democrats are being pushed into believing that
such policies are necessary to keep the government
and the economy from falling over a `fiscal cliff’ by
the end of the year. Fortunately, some of these
Democrats are pushing back, arguing that this is
the time to end flawed tax policies that favored the
wealthy at the expense of working-class Americans,
and reject the austerity policies that we see failing
miserably in Europe.

“So far 38 members of the House have signed on to
the resolution. Ask your member of Congress if he or
she will also co-sponsor the resolution. The answer
will tell you a lot about whether you are represented
by a lawmaker who sides with rebuilding the middle
class on a platform of shared prosperity or one who
is all too happy to make a `grand bargain’ with the 1
percent that shafts the rest of us.”
______________

BlackCommentator.com Editorial Board member
and Columnist, Carl Bloice, is a writer in San
Francisco, a member of the National Coordinating
Committee of the Committees of Correspondence for
Democracy and Socialism and formerly worked for a
healthcare union

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