Peterson, Conrad Weaken Democracy, Social Security, Medicare, & Recovery

On Monday morning, wealthy hedge fund mogul Peter Peterson and his Commission on Budget Reform will hold a press conference to issue a "Call to Action to Stem the Mounting Federal Debt." Their scary promotional material declares, "The ever-growing federal debt is spiraling out of control. If not addressed . . . Americans could be faced not only with a lower standard of living, but a real fiscal crisis."

Peterson's self-appointed deficit warriors don't really have a plan to cut debt and deficits - although most of them have a clear record of trying to cut America's meager Social Security and Medicare benefits. But they are selling a dangerous and undemocratic new budget process that would take the responsibility for budget-making away from the President and the committees of Congress and give it to a new commission charged with coming up with a plan to reduce the deficit and then jamming it through Congress on an up or down vote, with little debate and no chance for amendments.

This is not just an idea they are surfacing for debate. The Peterson event is part of a massive pr effort aimed at hijacking the US Senate until they get their way. Senators Kent Conrad and Judd Gregg have introduced legislation to create such a commission, called the Bipartisan Task Force for Responsible Fiscal Action Act of 2009 [1]. And, perhaps as early as this week, they may attach it to a must-pass piece of legislation, like the bill to lift the government's debt ceiling. So righteously do they believe in this crusade that they may be prepared to prevent the government from paying it's bills in a massive game of chicken the likes of which we haven't seen since Newt Gingrich tried to roll Bill Clinton over Social Security and the budget.

40 national organizations have sent a letter to Congress and the President [2] warning that the Conrad-Gregg budget "task force" idea represents a serious potential threat to Social Security and Medicare and to programs essential to poor and middle-class Americans. [Note: I helped write it. If your group wants to sign, click here [3]. To make a personal protest, click here [4].] The letter expresses concerns about the undemocratic nature of the proposed task force, and it notes that it will take a responsible democracy, not a rigid and undemocratic task force, to balance today's need for job creation with eventual focus on deficit reduction:

As unemployment continues to grow, we need a real debate about how to balance the need for economic recovery and productive public investment with the goal of long-term budget responsibility. The American people are likely to view any kind of expedited procedure, where most members (of Congress) are sidelined to a single take-it-or-leave-it vote, as a hidden process aimed at eviscerating vital programs and productive investment.

It is an odd time to be calling for a new focus on debt and deficit reduction -- and a dangerous time at that, given the still-fragile nature of the recovery. Did Peterson and friends protest vocally when George W. Bush's huge tax cuts to the very wealthy (like Peterson and his friends) blew a huge hole in the budget surplus Bush inherited from Bill Clinton? Where were they when Bush launched a long and costly war in Iraq and explicitly refused to pay for it? And why didn't we hear their outraged protests when Bush rammed through Congress the Medicare Part D drug program, (again, without any revenue to pay for it) - and whose prohibition against forcing the drug makers was a blatant invitation to the pharmaceutical companies to rip off the Federal government to the tune of billions of dollars in excess drug prices?

Peterson and friends choose to launch this Call to Action against the deficit at a time when our massive economic slowdown and rising unemployment has lowered tax revenues dramatically - and when our new president, who inherited both Bush's deficits and a potential economic collapse, has consolidated a majority consensus with the Congress that economic revival requires an official policy of public spending explicitly designed to increase the Federal deficit in order to stimulate the economy and put Americans back to work. Clearly Peterson and his Commission seek to undermine President Obama and confuse the American people, whose primary concern up to now has been rising unemployment and the costs of an economic collapse, which Obama's stimulus policies may have just avoided.

Some pundits [5] and even progressive bloggers [6], who are used to conservative hypocrisy, have counseled that we not worry about the Conrad-Gregg task force getting created. They note the task force members have to include Democrats and that, although when their proposals come to the floor, an up or down vote with no amendments and little debate is required, the task force would require a super-majority of its members in order for its proposals to get to Congress for a vote. Some even advise giving the conservatives their task force, let timid Democrats vote for it to give them cover against conservative attacks, and we can deal with the task force's recommendations in a year from now. Note: Other bloggers have attacked the whole idea. Here's mcjoan at Daily Kos [7], Robert Cruickshan at Calitics [8] and Chris Bowers at OpenLeft [9].

If it is passed, this Conrad-Gregg task force will be loaded with conservative lawmakers - so getting consensus might not be a problem among true believers. If it presents recommendations to Congress, heavy on spending cuts and light on tax increases as they are likely to be, Members will be under great pressure to vote for them to prove they are not soft on deficits and debt.

Pete Peterson and the other conservative ideologues behind the task force on deficits are clearly trying to undermine President Obama's emphasis on jobs and reviving growth - which, if successful is the best way to balance the budget. They are also aiming a dagger in the heart of active government. After economic recovery progressives will want to campaign for a strategy of investment - in green technologies, infrastructure, and human capital. And that will require progressive taxes sufficient to finance that investment AND bringing down the deficit. If Peterson, Conrad and Gregg can define the solution as cutting spending, not public investment and progressive revenues, they will have crippled our ability to build a productive economy over the long term.

If the budget task force gets established, with Federal funding and staffing, it will become a publicity vehicle that will take over the conservative work the Peterson Foundation that is financing Monday's press conference.

President Bill Clinton, under pressure from conservatives who wanted to privatize Social Security, called for a year-long debate on the future of Social Security, complete with government-sponsored public forums. The result: the enemies of Social Security who wanted to privatized our most important retirement and anti-poverty program got one-half of a very-powerful public megaphone. Eventually, after a huge progressive mobilization, Clinton turned against privatization, but the enemies of good policy got an enormous boost. We don't need to give a new government-sponsored platform to the enemies of useful government investment.

Those who doubt that the Peterson-Conrad-Gregg deficit task force represents a threat to democracy and public investment should read a timely warning from Senate Finance Committee Chairman Max Baucus, delivered on the Senate floor

Floor Statement of Senator Max Baucus (D-Mont.)
Regarding the Task Force for Responsible Fiscal Action Act of 2009
(as prepared for delivery)

Mr. President, commenting on the budget process in the 1980s, former CBO Director Rudy Penner said:

"The process is not the problem; the problem is the problem."

The Chairman and Ranking Republican Member of the Budget Committee have proposed another new budget process.

No one has shown greater zeal in taking on the budget deficit than the Chairman and Ranking Republican Member of the Budget Committee. I commend their good intentions.

But we should reject this process. Instead, we should solve the problem.

In their press release yesterday, Senators Conrad and Gregg said: "everything needs to be on the table, including spending and revenues." But why stop there?

If Congress is going to outsource its core fiscal responsibilities, why stop with just those responsibilities? Why not cede to this commission all of the legislation in the next Congress? Why don't we just outsource the entire year's work, and then adjourn for the year?

Come to think of it, if we do cede all of our powers to this commission, what is to stop them from inserting any and all business for the next Congress into the commission's one, non-amendable, omnibus vehicle?

There's the rub. For if the commission were merely a farce, then we could be satisfied with merely ridiculing it.

But this commission and its new fast track process are truly dangerous. If we were to cede all of our responsibilities to this commission, and we were to tie our hands so that we could not amend its recommendations, then we would risk setting in motion some truly terrible policy.

Under the proposed fast-track procedures, we would not be able to amend the proposal. What if we didn't like the commission's recommendations? We would not be able to replace the commission's recommendations with our own.

And it is clear from their press release that Senators Conrad and Gregg have painted a big red target on Social Security and Medicare. That's what this commission is all about. It's a big roll of the dice for Social Security and Medicare.

Advocates of the task force say that the regular order is not working. They say that we need a new process to address our long-term fiscal challenges.

But they're wrong. The regular order is working.

We are enacting health care reform. And serious people know that controlling the costs of health care is the central path to addressing our long-term budget challenges.

The lion's share of the reason why deficits are projected to grow so much in the long-run is the enormous increase in the costs of health care. We are doing something about it.

We are doing it the right way. We held open hearings. We legislated in committee. We are voting on amendments. We are legislating.

The Congressional Budget Office says that health care reform will cut the deficit $130 billion in the first 10 years and $650 billion in the second 10 years. That's nearly $800 billion in CBO-certified deficit reduction in health care alone.

And next year, we will legislate fundamental tax reform.

But some appear to want to throw in the towel. Some want to punt our responsibilities away.

I can see that a commission may be attractive to some. After all, it's the easy way out. It takes away our accountability for what we do. Senators can blame it all on the commission. Senators can say, "The commission made me do it."

But this is no time to abdicate responsibility. This new administration and this Congress are less than a year old. We should not shirk our responsibility. Rather, we should do the job that our constituents sent us here to do.

And luckily, we already have a process to address the budget. It's called "the Congressional Budget Process."

Here's a novel idea: Why don't we use the budget process to address the budget deficit?

If the Chairman and Ranking Republican Member of the Budget Committee are in such broad agreement on their goals, why don't they just skip the commission and go straight to their recommendation? That is exactly why Congress created the budget resolution and the reconciliation bill.

We don't need a commission to do our work. We don't need a new process to solve the problem. To solve the problem, we just need to solve the problem.

I urge my Colleagues to reject this commission. Let's get back to solving the problem. Let's get back to enacting real health care reform.

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