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From the category archives: fiscal commission

Economic Recovery is Good for Americans - Bad for Anti-Social Security & Medicare Lobbyists' Crisis Strategy

Kudos to Nancy Cook at the National Journal for looking beyond the news release headlines and doom-and-gloom sound bites offered by the billion dollar anti-Social Security and Medicare lobby in Washington in her coverage of the deficit debate.  Fiscal Commission chairmen Erskine Bowles and Alan Simpson, leading their corporate-backed “Fix the Debt” campaign, certainly got plenty of attention this week for repackaging their plan to cut benefits to millions of  middle-class American in Social Security and Medicare, veterans, people with disabilities and more to cut the deficit.  Thankfully, Cook provides the desperately needed analysis and perspective missing in most of the main stream media coverage on why these men continue to push for deficit reduction on the backs of average Americans—especially now that many these same families are finally starting to see a dim light at the end of a long recessionary tunnel.  

The deficit is going down, health care cost growth is slowing and the economy is finally showing signs of recovery.  Deficit reduction isn’t the biggest challenge facing our nation in spite of years of doom-and-gloom prognostications from this well-financed anti-entitlement lobby.  Time clearly isn’t on the side of deficit-hawks who’ve seen this recession as their best chance in a generation to force drastic cuts to Social Security, Medicare, and Medicaid.  Kudos to the National Journal for recognizing this basic truth.

New Simpson-Bowles Plan Overstates the Deficit Problem - The National Journal

The country’s annual deficit is shrinking for now, but that hasn’t stopped the two most prominent deficit hawks from waging an ongoing campaign for the elusive grand bargain.

by Nancy Cook

Updated: February 20, 2013 | 4:17 p.m.
February 20, 2013 | 3:42 p.m.

Deficit hawks Alan Simpson and Erskine Bowles just don’t quit.

The duo unveiled the latest iteration of their deficit-reduction plan on Tuesday, which calls for $2.4 trillion in cuts over 10 years — yet another chapter in their ongoing debt campaign that has not gained much political traction since 2010.

At first, Simpson and Bowles' newest proposal comes across as innovative: they learned from the past, rejiggered their suggestions, and rolled out a new framework during a quiet week when Congress was out-of-town. The new framework acknowledges the elusiveness of the big budget deal and instead lays out incremental spending cuts and tax increases that could occur over the next few years and into 2018. "Just the idea of a 'grand bargain' is at best on life support," said Erskine Bowles, the former chief-of-staff under President Bill Clinton, at a breakfast sponsored by Politico.

Such reasonableness attempts to cast the pair as aggressive, yet savvy deficit hawks who have taken a different, more nuanced tact that’s more in sync with the political reality of a very divided Congress and White House.

Yet, that’s not necessarily an accurate portrait of the current state of Simpson-Bowles. In fact, it appears to be doubling down on deficit-hawkishness just as the economy is improving and the deficit is shrinking.

The new plan calls for a 3:1 ratio of spending cuts to tax increases, whereas previous versions called for a more balanced ratio. That means that Simpson and Bowles are calling for the majority of future deficit reduction to come from spending cuts at a time when a wide swath of economists, including a prominent conservative economist from the American Enterprise Institute, have warned against sudden austerity measures.

Simpson-Bowles and like-minded hawks also uphold the belief that solving the deficit is the headline economic problem of 2013. Just check out the new website Debt Deniers, funded by Fix the Debt, a Simpson-Bowles sister organization run by the same web of alarmists.

The Debt Deniers site, unveiled late last week, calls out people “who claim America has no debt problem.” In ominous red, black, and white writing and graphics, the site criticizes “debt deniers” (cough, cough — like economist and New York Times’ columnist, Paul Krugman) who argue that the debt will solve itself, thanks to the slowly recovering economy, tax increases from the fiscal cliff deal, and spending caps set by the Budget Control Act of 2011. There’s nothing wrong with this strategy politically, except that it does not jibe with current economic data.

The deficit is not the primary economic problem of 2013; it’s just at the forefront of the political battles. (See: long-term unemployment, stagnant wages, or a slow-to-recover housing sector if you want to see real economic problems). Through the year 2016, the annual deficit is expected to shrink. (The Congressional Budget Office predicts it will decrease to $476 billion in 2016, compared to $845 billion in 2013).

Part of the reason the deficit is going down, at least temporarily, is that the federal government is taking in more revenue (25 percent more in the next two years). The rate of health care spending has slowed down considerably, and the economy is recovering, which means that Americans can pay more in taxes and/or rely less on the federal government for costly social safety net programs such as unemployment insurance or food stamps.

The deficit will start to significantly rise again by 2021 — though that’s a demographic and health care spending problem rather than an all-out crisis involving just too much debt. By then, the baby boomers will start to sign up en masse for Medicare, and no one from either end of the political spectrum has figured out a way to constrain health care costs given the large spike in people who will suddenly take advantage of federal benefits.

Arguably, that’s where Simpson and Bowles should expend their energy instead of talking about a deficit crisis that has yet to arrive on Washington’s doorstep, or by rejiggering a well-worn plan that’s made them wise, talking heads in Washington who still lack political juice.


Here they go again: the Latest Bowles Simpson Proposal tells Seniors “Pay More and Get Less”

While touted as a “new” plan by the mainstream media, the latest Bowles/Simpson (BS) deficit reduction proposal is really just more of the same -- requiring middle-class benefit cuts and tax hikes to reduce the deficit. 

“Their plan once again calls for cuts that are out of sync with middle class American’s priorities. Adopting the chained CPI, as Bowles Simpson propose, would mean an immediate benefit cut of $130 per year for the typical 65-year old retiree and would grow exponentially to a $1,400 cut after 30 years of retirement. This chained CPI proposal isn’t a “tweak” or an “adjustment,” it’s designed to cut benefits and raises taxes, largely on the poor and middle class, totaling $208 billion over ten years.  $112 billion of those benefits cuts come from Social Security alone with up to $24 billion coming from VA benefits and civilian and military retirement pay cuts. That’s a lot of money…out of the pockets of those who can least afford to sacrifice even more. “…Max Richtman, President/CEO

While BS claims a goal of “shared sacrifice” let’s not forget that already 75% of deficit reduction has come from benefit cuts. Their latest version simply doubles-down on that formula asking for $2.4 trillion dollars more in savings, again largely from middle class Americans.  Think Progress breaks it down:

Between the budget deals in the spring of 2011 and the Budget Control Act, which averted the debt ceiling crisis that same year, spending has been cut by $1.5 trillion and interest payments reduced by another $200 billion. Then the American Taxpayer Relief Act, which solved the impasse over the “fiscal cliff,” raised $600 billion in new tax revenue.

So if Simpson-Bowles are interested in “building upon” what lawmakers have already achieved, the logical thing to propose is another $1.4 trillion in spending cuts plus another $2 trillion in additional tax revenue. Or if they’re happy with their new $4.8 trillion target — rather than the original $6.3 trillion — their new proposal should heavily favor tax increases, since deficit reduction so far has favored spending cuts by three to one. Instead, Simpson and Bowles are proposing $1.8 trillion in new spending cuts and reduced interest payments, and only $600 billion in additional revenue.

It’s also worth noting that the additional revenue, once again, does not target those who’ve benefited most in this economy.  Instead, BS will hit middle-class Americans with higher taxes while lowering tax rates for corporations and the wealthy:

“They’re still singing the gospel of revenue increases funded by “closing loopholes,” an amorphous plan that’s likely to hit the middle class with much more force than it would higher earners. They claim that the tax code is “riddled with well over $1 trillion of tax expenditures – which really are just spending by another name.”

And then they repeat their call for lowering tax rates for corporations and the highest-earning individuals.

Their $1-trillion-plus target for “tax expenditure” elimination can only be reached by targeting employer health plans, home mortgage interest deductions, and other policies that would disproportionately hit the already-beleaguered middle class.

Their approach would convert a social insurance program into a welfare program – but one which is solely funded on income below the payroll tax cap (roughly $110,000 at the moment). That plan targets everyone BUT the wealthy in the name of deficit reduction. That fact, coupled with Simpson and Bowles’ continued insistence on lowering tax rates for corporations and the wealthy, illustrates the right-wing thinking that underlies this supposedly “bipartisan” approach.”  Richard Eskow, Our Future Blog

Once again, BS ignores the fact that according to the  latest Congressional Budget Office (CBO) projections, Medicare spending over the 2011-2020 period has already fallen by more than $500 billion since late 2010.  This inconvenient truth undermines the Bowles/Simpson meme that Medicare must be radically overhauled and seniors’ benefits slashed to lower costs.  Allowing time for health care reform’s full implementation, given the lower spending costs already reported, is only reasonable.  However, it simply doesn’t fit the BS frame that the only way to cut the deficit is to cut seniors’ benefits.  The deficit reduction debate and Congress’ many self-induced fiscal crises provide anti-entitlement crusaders the best opportunity they’ve had in a lifetime to radically overhaul America’s retirement and health safety net.  They know time is of the essence because reports of economic recovery and federal health savings undermine their campaign to blame our nation’s economic woes on Social Security, Medicare and Medicaid.

We don’t have to slash benefits to the middle-class and poor Americans to reduce the deficit.  The BS plan to cut COLA’s and raise taxes through the chained-CPI, cutting Medicare benefits by further means testing and eliminating Medicare eligibility for millions of younger retirees is not shared sacrifice.  It’s not fiscal responsibility and it’s certainly does not represent the economic priorities of the vast majority of Americans of all ages and political parties.



Fix the Debt says Cutting Social Security is as American as...

What do you do when the vast majority of Americans, of all ages and political stripes, disagree with you?  If you’re part of the well-financed anti-Social Security, Medicare lobby, you simply spend a portion of your billion dollar investment on a massive nationwide advertising campaign designed to convince Americans that cutting middle-class benefits is as American as…let’s see…McDonald’s hamburgers.  

    Burson-Marsteller subsidiary Proof Integrated Communications has launched a massive campaign for the Fix the Debt organization. The campaign includes images that are parody recreations of well-known advertising slogans with taglines like “I'm fixin' it,” “Got debt?” and “Just fix it.” Johanna Schneider, MD of Burson's DC office, said this is the biggest public policy campaign she has seen in some time.

This new campaign is in addition to the PR blitz already underway led by PR agencies DCI Group, Glover Park Group, and Dewey Square Group, which is also paid for by the same Pete Peterson funded anti-entitlement campaign.  

How ironic that as Alan Simpson continues to attack seniors’ groups like ours for daring to represent their membership (and at $12 per year membership you can be sure we don’t have a billion dollars to spend) his big business and Wall Street funded “Fix the Debt” campaign is preparing an all-out advertising onslaught geared to buy the debate and silence the middle-class Americans who will actually pay the price for their failed fiscal policies. Representing seniors -- BAD, representing big business -- No problem!

The American people simply don’t believe cutting Social Security benefits for a senior living on an average $14,000 while lowering tax rates for corporations and the wealthy is fiscally responsible.  They don’t believe the nation’s disabled, veterans, survivors and their families should pay the price for a deficit Social Security didn’t create. 

However, as we’ve already seen,  this Wall Street backed propaganda campaign has succeeded  in  convincing many on Capitol Hill that if millionaires lose even a penny of their tax cuts then the middle-class and poor must pay an even bigger price.   

The question is will this massive ad blitz fool the American people into accepting massive benefit cuts with their fries?  

Breaking Down Plans to Cut Medicare & Social Security

As we've reported here many, many times conservatives in Congress continue to demand cuts to Social Security, Medicare and Medicaid to reduce the deficit.  There are a myriad of bad ideas that they've proposed to do this. 

Here are some (hopefully) easy to understand infographics on some of the proposals currently being debated in closed-door Congressional deficit talks. You'll note that many are based on the Bowles-Simpson (BS) report, which is the bible for corporate CEO's and the well-funded fiscal hawk lobby. You can also find all of these on the National Committee's Lame Duck website. 

We're also asking you to sign the online version of our "No Cuts" petition here.  We will have more than 65,000 petitions to deliver to the Senate soon...please add your voice to the debate.






Wanted: A Political Intervention for Alan Simpson

We wrote yesterday about Fiscal Commission Co-Chairman and former Senator Alan Simpson’s latest diatribe against seniors – this time launched at the Alliance for Retired Americans in California. For anyone who’s been in Washington for awhile, these rants are really just déjà vu all over again.  But even as a “charter member of the Simpson tongue-lashing club” our President/CEO, Max Richtman, found this latest attack simply too much.  So he wrote Senator Simpson a letter asking him to cease and desist his hate-filled attacks on seniors:

May 24, 2012

Dear Senator Simpson,

We’ve both been in this business for a long time and we’ve certainly had our share of fundamental disagreements about America’s priorities and how to protect them.  As you well know, I’m a charter member of the Simpson tongue-lashing club going back to my time as Staff Director at the Senate Aging Committee and since.

However, after reading your letter to seniors in California, who simply dared to oppose your reforms for Social Security and Medicare, I feel compelled to ask you to refocus this debate where it belongs. Call this a political intervention, if you will.

The American people deserve and expect a true dialogue in which retirees are more than “greedy geezers” and those with opposing world views aren’t treated with the total disrespect you hand out so freely. After thirty years, isn’t it long past time to elevate the conversation beyond personal and profane attacks on those you simply disagree with?

I know this letter is likely an exercise in futility.  However, I’m writing to you today with one simple request – please cease and desist with the mean-spirited, denigrating, and hate-filled personal attacks on America’s seniors.  Sure, some in the press still love the profanity laden poison-pen letters and insulting sound-bites,  but it only denigrates the serious policy work many honest and caring people on both sides of the debate perform each and every day, not to mention the American people who will ultimately be impacted by the reforms being debated.

No doubt you consider all of this “blather and drivel” or even your favorites “horse or bulls**t”.  However, that fact has absolutely nothing to do with the serious business at hand.  Please refocus your attention to what really matters – your proposed reforms and the American people who will be affected by them.


Max Richtman


The National Committee to Preserve Social Security & Medicare

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