Democratic Party

The Long Game: Payroll Taxes, Hostage-Taking, and Social Security

Richard Eskow — Tue, 29 Nov 2011 22:11:48 -0500

Yesterday Thom Hartmann and I discussed the proposal to extend and expand what Democrats have called the 'payroll tax holiday.' (Video is below.) There are no heroes in this debate, but there are certainly villains. There are several different ways this could end - and most of them aren't good.

By proposing to expand and extend this 'holiday,' Democrats have bypassed more efficient ways to help the economy, and have once again endangered Social Security. And by demanding tax breaks for millionaires while blocking them for the middle class, Republicans have once again demonstrated their willingness to blow up the economy for self-serving purposes.

The choice is either to back the highly flawed Democratic proposal or let the Republicans block it, which would plunge the economy into an even deeper hole than it's in right now. Imperfect as the proposal is, the alternative is unacceptable. If it failed the already-wounded economy would suffer even more, and millions of jobless Americans would be left without the unemployment insurance they need.

Hostages

This drama's being played out against a backdrop of political terrorism. Republicans have threatened to shut down the Federal government several times if they don't get what they want, and Democrats have violated the 'don't negotiate with terrorists' principle each time. That's encouraged them to keep it up.

That means every Democratic proposal is likely to weakened considerably before passage. And like other Democratic proposals, this one is born weakened. Today the government is operating under a temporary spending measure that expires on December 16. Guess what happens then?

This bill needs to support because there'll be havoc if something like it isn't passed. But we're being given no choice. The Democrats have their hostage scenario - and we have ours.

The Frame-Up

The bill opens up several avenues for ugly compromises. It would extend the current 'payroll tax holiday' for employees, increasing it from 2% of earnings to 3.1%. It would also cut the employers' contribution in half - from 6.2% to 3.1% - for the first $5 million in payroll, and would eliminate it altogether for newly hired employees (for the first $12.5 million in payroll).

What's wrong with that? The first problem is with the framing. The payroll (or FICA) contribution should be seen as a premium, not a tax, especially for employees. Working people are paying into a social insurance program, with the expectation that they'll collect benefits (primarily Social Security, though the tax also helps fund Medicare) from it when they're needed.

By calling their proposal a "tax holiday" and a "middle class tax cut," Democrats are reinforcing the idea that this is just another burden on working people - one that offers nothing in return. That's not true, and it's bad for Social Security.

Holidays in the Sun

Yes, the middle class needs a tax break right now. And we need to put more money into people's pockets to reduce unemployment. But there were and are far more efficient ways to accomplish that, including the Making Work Pay program which the Democrats abandoned last year in favor of the "payroll tax holiday." That program was a better way to stimulate the economy - and it was fairer to the working poor.

Here's why: A payroll tax cut applies to all income up to the tax cap (which is currently about $106,000). So a person making $100,000 will save $3,100, while a person making $20,000 will only save a few hundred dollars. The switch from Making Work Pay to the payroll tax cut actually hurt lower-income working families last year. And those lower-income families are the ones who are most likely to spend that money as soon as they get it, which makes it a more efficient way to help the economy.

Democrats are being a little misleading when they boast that their proposal will save "the average family" $1,500. That's technically true - but it will save higher-earners a lot more and lower-earners a lot less.

The Bottom Line

The tax break for employers makes even less sense. Corporations are already sitting on $2 trillion in cash. The reason they're not hiring people with that money is because there's not enough demand for their goods and services. So what good will a little cash in their hands more do?

Think about it: A 3.1% tax break on people you've already hired isn't going to do much. When I was in the corporate world we typically budgeted 2.5 times a person's salary to determine the total cost of employing someone. That includes salary, benefits, office space, and other expenses. That means this tax break is a savings of 1.24% for companies like mine. That's not going to change very many hearts and minds in the executive suite.

Eliminating the tax altogether for new hires is a better idea - but not much. If a large corporation doesn't think it makes financial sense to hire someone, reducing the cost of that hire by less than 3% isn't likely to change their mind. Overhead costs are much lower for small employers, especially in the age of telecommuting, but even a 5% or 6% reduction in costs isn't going to change too many business owners' minds in this economy.

Want to know a good way to use Federal funds to create jobs? Hire people with it. You know, government workers like cops and teachers. Invest it in our infrastructure. Or if tax policy's your only option, give most of the breaks to working people who will spend what they get

So why did Democrats choose this approach, rather than another? I might as well program that into my computer as a hot-key function, since the question needs to be asked so often. Could there be a Long Game here that involves cuts to Social Security?

That's speculation. But it wasn't very comforting to watch Sen. Dick Durbin playing the class-war game against Sen. Jon Kyl, since the once-reliable Durbin has started pushing aggressively for needless and harmful Social Security cuts.

The Long Game

EIther way, this proposal opens up avenues to a lot of unpleasant possible outcomes in upcoming negotiations. Here are a few of them:

Republicans could accept the tax cuts, but refuse the tax hikes for millionaires. If the Democrats cave on that issue, Social Security's Trust Fund will be funded with even larger money transfers from the overall Federal government's budget. That's a breach of the Trust Fund's firewall, which hadn't occurred in the program's 75-year history until last year. That's when Democrats, led by President Obama, introduced the payroll tax cut.

Which leads us to the next danger ...

Republicans could accept the tax cuts but insist that the Trust Fund's shortfall not be covered by general funds.That would turn Social Security's mild, easily remedied long-term imbalance into a more urgent problem -- which is just what the anti-Social Security crowd wants. That opens the door for politicians from both parties to raid the Trust Fund's $2.6 trillion surplus for other purposes.

Republicans might insist that some percentage of the 'tax cut' be invested in private Social Security accounts. Republicans have been trying to privatize Social Security for a long time. These ~~hostage negotiations~~ budget negotiations could give them the chance to finally get their foot in the door on that topic.

Democrats might 'compromise' on the COLA reduction, a Social Security benefit cut that both the White House and some other Democrats (including Dick Durbin) have been pushing all along. They call it an 'adjustment,' but their proposed method for calculating cost of living (COLA) adjustments is a benefit cut, pure and simple, that would lower an already-inadequate formula and take money out of people's pockets. It will probably be revived in these debates.

Fit to Be Tied

Where does this all leave us, the public? It leaves us in a position where it makes sense to call your representatives in Washington to push for this proposal - because the economy can't take the hit that it would take if this 'cut' expired, because the middle class needs the break, and because the unemployed deserve an extension in unemployment insurance.

But it also leaves us - some of us, anyway - frustrated as hell with a political system that forces us to choose between the inadequate and the insane. With regrets, for the moment I'm going with inadequate and backing this bill.

But if the Democrats want applause for this, they're going to be disappointed. I think I'm going to listen to that old Peggy Lee song instead. You know the one I mean, don't you?
______________________

Here's the conversation with Thom Hartmann. He sets it up with a good overview, and we start exchanging thoughts about 2:45 in:

A Super Committee "Failure" Wouldn't Hurt The Economy - But a "Success" Sure Would

Richard Eskow — Mon, 07 Nov 2011 22:47:26 -0500

Some Democrats have come under a lot of criticism lately, much of it deserved, for abandoning popular and important programs that were historically associated with their party. But some of the other Democrats -- the ones who are trying to act in the country's best interests -- are genuinely concerned about what will happen to the economy if the Super Committee fails to come up with a plan.

This message is for them -- and anyone else who has the same concern. You need to know that the evidence is clear: A Super Committee failure won't hurt the economy at all.

But its "success" almost certainly would.

Economic Y2K

Every month it seems as if there's another "bipartisan" process designed to impose austerity on the American people. And every month we're told there will be terrible consequences in the world's markets if it doesn't succeed. These predictions are the economic equivalent of "Y2K" -- always apocalyptic, never true, and all too frequently believed.

Democratic officials and staffers are being bombarded by these predictions, delivered by think-tank operatives from their own party who have been steeped in the cult of austerity. It doesn't matter how many times they're refuted by impeccably constructed papers, or by the observations of Nobel Prize winners. And it doesn't matter how many times these predictions are proven wrong.

Some of the experts warning of doom if the "Super Committee" fails said the same thing about last year's Deficit Commission, too. What happened when that "bipartisan" body deadlocked, and the private plan put forward by its co-chairs went nowhere?

Nothing.

Now the same players are telling us the stock market will plummet without a Super Committee plan. They're saying there will be more downgrades of the US government by credit rating "agencies," and that this will bring disastrous consequences. And they're saying that international markets will lose confidence in Treasury bonds.

But recent history teaches us that the exact opposite is likely to happen.

Over-Rated

Here's the story the doomsayers like to tell about credit ratings: Without the committee's cuts, ratings agencies will stop believing that our country has the "political will" to handle its long-term deficit problem. (It must be remembered that these so-called "agencies" are actually for-profit, publicly traded companies whose clients are the very wealthy individuals and banks that benefit from austerity economics.)

Even so, Moody's has already said that it would be "informative, but not decisive" if the committee fails to come up with a plan. As for S&P -- well, it depends on which S&P is speaking today. Just a few weeks before it downgraded the US economy it was saying that it wasn't concerned about deficits for at least three years. That was a pretty good call, since we'll need about two to three years of government investment in jobs and growth to turn this economy around.

So why did they change their mind so suddenly? That's what a lot of people would like to know. Since S&P benefits from a lot of government regulations, Congress would be smart to hold hearings looking into that question. But there's no evidence that a Super Committee failure would lead to downgrades.

Still, what if it does happen? Fortunately, we already know the answer to that.

Summer Stocks

Today the austerity crowd has rewritten history to suggest that markets plunged when S&P issued its inexplicable downgrade over the summer. But that's not what happened at all. There was a big drop, all right -- after the President and John Boehner concluded an austerity deal to end the debt ceiling crisis. It's the first vertical line on this chart:

The second line marks the "downgrade apocalypse" we'd been hearing about for months -- the long-dreaded downgrade, a moment we were told would lead to a plunge in the stock market. What happened the next day? The stock market went up.

Investors know that austerity programs like that deal -- and the Super Committee's expected proposals -- inflict damage on a nation's economy. So when the last austerity plan passed, they did what any sensible investor would do: they sold. They'd already seen how destructive these programs had done to Great Britain's economy.

Austerity economics suppresses hiring and wages. That leaves people with less money to spend and less confidence about spending it. So companies that provide goods or services lose revenue. That makes investors lose confidence in sales and service-driven stocks.

Investors and other business people may be greedy sometimes -- but they aren't stupid.

The Name Is "Bonds"

What about the bond markets? Inexplicably, a lot of policy types continue to dread what Paul Krugman calls the "invisible bond vigilantes" and the "cruel bond cult," those ruthless -- and mythical -- skeptics of the dollar who will drive the value of our bonds into the ground unless we show political resolve by slashing Social Security and Medicare.

Prediction after prediction of bond-market disaster has proven false, yet the fear remains. Budget expert Stan Collender had it exactly right when he wrote this:

"In spite of the consistent warnings that they were about to unleash the hounds of hell on interest rates, there continues be no sign whatsoever that bond-market vigilantes have returned (or even really exist, for that matter). Quite the opposite might be true: Given the current fragile nature of the economic recovery, the bond and equity markets are just as likely to be spooked by the short-term federal spending reductions and revenue increases the super committee members might recommend ..."

That makes sense. An imploding economy, with unimproved or declining employment and wages, means a loss of tax revenue -- along with the possibility of social upheaval and political unpredictability. These "bond vigilante" scare tactics may create exactly the problem they're claiming to prevent.

The Austerians will tell you that these markets won't be satisfied with anything less than the sacrificial blood of America's seniors, even though Social Security doesn't contribute to the deficit, because entitlement cuts have long-lasting effects. But they don't. Benefit cuts are just as reversible as any other spending reduction -- and they're much more harmful to the economy.

If you throw Grandma from the train to impress somebody that doesn't exist, you gain nothing. But you're sure gonna tick Grandma off.

Stimulus/Response

Ben Bernanke is a Republican and a traditionally pro-market economist. But he's finally stating clearly that this is not the time to cut spending. Last month he said the economy "is close to faltering," that unemployment continues to be a "national crisis," and that "We need to make sure that the recovery continues and doesn't drop back and that the unemployment rate continues to fall downward."

This week Bernanke added this comment: "While I do not shirk the responsibility of the Fed having to do what it can to meet its mandate, obviously a broad range of policies can affect growth and employment and I hope that there will be a range of actions that will complement and supplement the Federal Reserve's efforts."

In other words: Government, get off the dime and start investing in jobs and growth.

Bernanke's Fed is not the only austerity-minded institution to accept the fact that we need more government spending right now, not less. The IMF, which is usually known for forcing austerity on client nations, has been urging European countries to "adjust their austerity programs to a changed situation and consider measures to drive growth."

IMF head Christine Lagarde also said: "If the United States launches a credible middle-term adjustment program (i.e., stimulus spending), there is possibly room to abandon the short-term austerity measures and to introduce some measures to drive growth."

In other words, don't be in a mad rush to do what the Super Committee is trying to do, which is to impose cuts that begin in 2013. That may sound far away. But the Simpson-Bowles austerity cuts sounded far away, too, when the two men proposed them last year. But if they had been enacted, they would have begun taken effect less than eight weeks from now.

The truth is it's reckless to propose arbitrary dates and dollar-figure targets, as the Super Committee is doing. A smart, balanced deficit program would be designed to take effect after the government has done what's needed to fix today's crisis. And it would not be based on figures that were established years before we knew what the overall economic picture was going to look like.

Failing Up

The other concern that policymakers have is political in nature. Democrats in particular are worried about appearing to have failed if they can't reach a compromise with Republicans, and they're afraid the voters will punish them for it.

That's only possible if they keep insisting that a Super Committee agreement is the only measurement of success. But if they make it clear that they weren't willing to accept destructive, one-sided cuts, the voters will reward them for it. Nothing would be more reckless than to pass a budget-slashing plan based on arbitrary dates and figures in an economy that's this stagnant and in this much danger.

Voters already believe that Obama has been acting in good faith to fix the economy, and that the Republicans are not. If Democrats defend Social Security in the process of saving their government, polls show that voters (including many Republicans) will reward them for it.

The committee's members are being warned that all of them will suffer in any future bids for leadership if the committee "fails" to put forward a plan. The economic and polling data make the answer to that clear: Not if they "fail" like leaders.

Now is the time for Democrats to explain why there are more important things at stake than peace at any price within the Super Committee -- and why the kind of deal Republicans want is worse than no deal at all.

Wanna See a Real Ass Kicking (Itself)? Read the Dems' Disastrous "Super Committee" Proposal

Richard Eskow — Thu, 27 Oct 2011 21:38:53 -0400

If you've ever questioned whether the so-called "Super Committee" represents a breakdown in the democratic process, yesterday's proposal from the group's Democratic members should put your doubts to rest. The system's seriously broken when unelected super-legislators from both parties keep trying to top each other in proposing inhumane and unpopular programs.

The party of the donkey is about to give itself a real ass-kicking.

Representatives from the "party of the people" want to cut Medicare and Social Security, and they're looking for bragging rights on who'd cut government more in a time of need.

If the regular folks' party is trying to impose this much pain on the elderly, poor, and disabled, what's the rich people's party going to do: sacrifice babies in Times Square on live television?

Change That Shatters

As I read the proposal I kept asking myself: Who are they trying to impress? Certainly not the electorate, which overwhelmingly rejects the positions they're advocating. And certainly not the Republicans, since even these Dems aren't naive enough to think their proposal will be accepted. So who?

The "Super Dems" are proposing twice as much in deficit cuts as the Committee's mandated to find. That bit of pointless grandstanding reinforces conservative notions that government spending is evil and deficits are our most urgent problem.

It's straight out of the Bill Clinton playbook. But Clinton operated in a period of artificially pumped up, bubble-fueled prosperity. Americans hunger for better policies now. That hunger helped Democrats win the White House and both houses of Congress in 2008. (Seems so long ago, doesn't it?) The Democratic Party website still proudly proclaims the Party's slogan: "Change That Matters."

Change? These are the same Republican Lite policies Clinton ran on in 1992. But we're a sadder and wiser nation now. We've reaped the bitter fruits of economic inequality and endured a disastrous crash as a result of these bipartisan policies. We've moved on, but these Democrats haven't. They're still slavishly (if meekly) echoing the failed conservative ideas of the past.

Indecent Proposal

Their plan calls for $400 billion in Medicare and Medicaid savings, half or which would come from benefit cuts for the seniors, disabled, and low-income people who rely on these programs. The higher out-of-pocket costs for these vulnerable populations would leave many of them with less to spend on necessities, taking billions out of the economy and creating even more economic stagnation. Not to mention the hardship and suffering ...

The other $200 billion would presumably be found by cutting provider reimbursements - which makes sense if done wisely, but which will only create shortages and access problems if done foolishly. (Wise or foolish: Bets, anyone?)

According to the Wall Street Journal, the Democrats also support moving the government to a "chained CPI" cost-of-living adjustment (COLA) calculation for Social Security. That would shortchange everybody receiving benefits, including people already receiving them.

The current COLA is already a raw deal for seniors, disabled people, and the poor, and now these Dems want to double down on it. The chained-CPI would also raise taxes on people who aren't already in the highest tax bracket by accelerating "bracket creep."

So let's sum up what we've heard so far: Democrats want to cut Social Security and Medicare, and they also want to raise taxes on everybody but the rich. Enjoy your "change," America.

Gestures

In a nod to their base, the Democrats are also proposing $300 billion in stimulus spending. But reports were vague on the specifics, with the Journal reporting only that "aides familiar with the Democratic plan say it also called for as much as $300 billion in spending for programs to create jobs and spur economic growth."

The Super Dems also also say they want $1 trillion in new revenue, but they don't say where it should come from. That means some or all of it could be raised by reducing or eliminating provisions like employer health and mortgage interest deductions that help the struggling middle class.

But then, why expend a lot of effort on a proposal you know is doomed from the start and which you don't intend to fight for? If that sounds too cynical, rest assured: We'd love to be proven wrong, and the Democrats on the Super Committee can prove us wrong with a word. That word is "no." If the Super Committee Dems announce that they'll say "no" to any plan that doesn't include stimulus funds, we'll gladly provide a full refund on the cynicism.

With interest.

A Smart Plan

What would an intelligent plan look like? It would be designed around three simple principles:

Arbitrary deficit reduction targets are meaningless and foolish. Why are we having a debate about whether to cut the deficit by $1.5 trillion or $3 trillion? We don't know how big our economy will become in the coming years. We don't know how much money will be coming in, or how much we'll need to spend.

The best way to ensure a healthy Federal budget is to ensure a healthy national economy. When more people have jobs, the economy improves. And when the economy improves, more people have jobs. So we should be talking about jobs, jobs, jobs: As the economy grows through government investment, more people will have them. People with jobs pay taxes, so the government's bottom line will improve.

Government needs to learn a fundamental business principle: Sometimes you have to spend money to make money.

No plan should take effect until we've achieved normal employment levels. Many of these proposals have been given start dates in coming years. But no plan to cut spending, especially spending that directly or indirectly affects employment, should take effect until overall employment returns to normal levels.

Now for a word from the party's sponsors: the voters who put them in office.

Reminder

When the Democrats were swept into office in 2008, here's what their platform said about Social Security: "We will fulfill our obligation to strengthen Social Security and to make sure that it provides guaranteed benefits Americans can count on, now and in future."

And here's what it said about Medicare: "We will protect and strengthen Medicare by cutting costs, protecting seniors from fraud, and fixing Medicare's prescription drug program."

Thought the Super Dems might want to tape this to the refrigerator or something before the next Committee meeting.

Ass-Kicking Time

It's like a Zen koan: What is the sound of one ass kicking itself? These proposals aren't just destructive. They're self-destructive. Pick a poll, any poll, and you'll see how unpopular these ideas are. Overwhelming majorities of Americans - including a majority of Republicans - oppose cutting Social Security or Medicare to fix the deficits. And strong majorities want higher taxes on the wealthy, a topic which the Super Dems are waffling about.

It's a political kamikaze stunt for Dems to adopt the GOP's "less government" theme. Ask yourself: If you want some government-cutting done, are you going to hire a Democrat or a Republican? If you want to fire government workers, are you going to hire Mitt Romney - who has a long track record of firing people - or Barack Obama? Every minute spent bragging that "we'll cut more" is a minute spent convincing people to vote for your opponent.

The President's repeating the mistakes he made during the healthcare and financial reform debates, and he's turning negotiations over to the same failed crowd. He's considered the leader of his party, but once again he's letting the party lead him instead. And when it's all over the GOP will run the same play it used last year, positioning itself as the party that defended Medicare. These Dems are helping them do it.

Which brings us back to the question: Who are they trying to impress? The big-money donors who have pivoted back to the GOP, but will still throw them a few bucks now and then? Billionaire Pete Peterson and the other foundations and think tank benefactors who might them sinecures after they retire? Their fellow inhabitants of a warped Washington culture that views Grandma-sacrifice as a totemic act of courage?

Stop them before they triangulate again

Maybe all of the above. But their self-preservation rests on getting re-elected. Do they expect a grateful nation will rush to the polls next year saying, "They didn't cut government enough, but at least they tried"? Twenty-four million Americans are un- or under-employed, and they all have family, friends, and neighbors. That's a lot of voters to convince that their misery is less important than who chose a bigger deficit-cutting number.

They Super Committee, the President, and other Democratic leaders need to get the message from voters, loud and clear. Maybe public pressure can save them from their self-inflicted impending doom. As Smokey the Bear might say, only you can prevent ass-kickings.

Any proposal they present will be defeated. They know that. So why do they keep offering watered down right-wing plans like this one? Why don't they start offering bold, courageous alternatives to the conservative economic madness that's failing in Europe and here at home?

People admire someone who goes down fighting, but they want to go down equivocating - or surrendering. In the end, they'll just go down. And if they aren't stopped they'll take the rest of their party with them. Strange. They know they can't succeed legislatively, yet they keep putting themselves on record as favoring destructive and unpopular policies.

It's sad but true: These guys don't even know how to fail right.

Occupy Wall Street Speaks For America: A "Centrist" Hit Job's Polling Data Helps Prove It

Richard Eskow — Tue, 18 Oct 2011 00:45:52 -0400

Thanks to a hit piece by one of those Beltway pseudo-"bipartisans" we can now state conclusively what many of us have long suspected: Occupy Wall Street speaks for the American majority. We've got the polling numbers to prove it. We now know where the real center lies.

It's easy to understand why people like Douglas Schoen are lining up to attack OWS. It shines a spotlight on their cardboard centrism - that think-tank designed, artificially-inseminated, vat-grown corporate ideology so widely rejected by the public at large. OWS represents the real American consensus, and that has them running scared.

But Schoen's Wall Street Journal editorial falls so far short of the mark that it elicits only a soft sense of pity. It illustrates nothing except the intellectual and moral bankruptcy of those out-of-step Democrats who sell themselves to conservatism under the 'centrist' or 'Third Way' banner.

Oh, wait. It also provides enough data to undermine his entire argument - and possibly his entire ideology.  Before we look at the numbers we should take a closer look at these "centrists" and why they're trying to kill Occupy Wall Street.

How to Succeed in ~~Centrism~~ Conservatism Without Really Trying

Douglas Schoen is an excellent case study in the right-wing careerism that masquerades as 'centrism' in Washington today. The formula's simple: First get yourself some Democratic Party credentials. That's easy enough to do inside the party's corporate wing. Next, get a gig with one of conservative media outlets. And after that, start making proclamations 'against type' about how corporate-driven conservatism is the true heart of America. That's when the cash really starts rolling in. Then, like any good syndicate, the centrist Cosa Nostra will tell you it's time to return the favor with a hit job or two.

Schoen followed this easy-cash formula to a T (or "Tea"). Democratic Party credential? Check. He did polling for Bill Clinton, then the company he cofounded with Mark Penn went to work on the Hillary Clinton campaign. Cushy gig with a conservative media outlet? Check. He's a Fox News "analyst." Proclamation "against type"? Check. He co-wrote a book with Republican pollster Scott Rasmussen calledMad As Hell: How the Tea Party is Fundamentally Remaking Our Two-Party System.

Unfortunately for Schoen, the premise of their book required him to promote at least four massive falsehoods. The first was that Fox News is, in fact, "fair and balanced," and the second was that Fox did not aggressively promote the Tea Party. (Karl Frisch of Media Matters decimates these two claims.) The third was that the Tea Party was a spontaneous citizen uprising, not a heavily orchestrated corporate and Koch-founded process directed by Republican operatives. (See here and here, for starters.) The fourth falsehood is the claim that the Tea Party represents the views of most Americans. We'll get to that one shortly.

As for that final rite of "centrism" - the hit job - Mr. Schoen's editorial demonstrates that he'll happily don the ankle holster and squeeze off a round from his derringer whenever the signal's given. Luckily for the country, we're dealing with the gang that couldn't shoot straight.

Red Dawn

Mr. Schoen warns that "President Obama and the Democratic leadership are making a critical error in embracing the Occupy Wall Street movement--and it may cost them the 2012 election." He bases this statement on a survey of demonstrators which he says was conducted by an associate of his. Unfortunately, he doesn't provide either the questionnaire used or the raw data, so we're forced to settle for vague Red-baiting assertions instead of hard information. Fortunately, as with his Fox/Tea Party claims, he quickly undermines his own claims.

Summoning visions of 1970, when Democrats were undone by association with anti-war "hippies," Schoen writes that "the Occupy Wall Street movement reflects values that are dangerously out of touch with the broad mass of the American people--and particularly with swing voters who are largely independent and have been trending away from the president since the debate over health-care reform."

What, exactly, are those values? "What binds a large majority of the protesters together ...," Schoen writes, "is a deep commitment to left-wing policies: opposition to free-market capitalism and support for radical redistribution of wealth, intense regulation of the private sector, and protectionist policies to keep American jobs from going overseas."

In other words, they're Commies.

Now We Can Prove It: Occupy Wall Street Speaks for America

But the only actual policy positions Schoen mentions are these:

"Sixty-five percent say that government has a moral responsibility to guarantee all citizens access to affordable health care, a college education, and a secure retirement--no matter the cost. (emphasis mine) By a large margin (77%-22%), they support raising taxes on the wealthiest Americans, but 58% oppose raising taxes for everybody, with only 36% in favor. And by a close margin, protesters are divided on whether the bank bailouts were necessary (49%) or unnecessary (51%)."

Hmmm ... how "dangerously out of touch" are these views with those of the general public - and those all-important independent voters? We've prepared a handy chart illustrating that point, for your convenience (and Mr. Schoen's enlightenment). It's called Occupy Wall Street Represents America: The Polling Data (Unlike some folks, we show our work - even though, as you'll see from the attached, exact comparisons are hard to come by, especially given Mr. Schoen's vague wordings.)

Here are the highlights:

The public agrees with OWS on health care: 65% of protesters believe government should guarantee health care for all. In the last major poll on the subject, 64% of voters said the same thing.

The public agrees with OWS on taxes: 77% of OWS participants want to raise taxes on the wealthy; according to the Marist polling organization, 68% of all voters - including 68% of independents - agree with them.

The public agrees with OWS on a secure retirement: 65% of protesters think the government should guarantee a secure retirement. 70% of all voters - including 73% of independents - agree with them.

Schoen may have tried to hide or skew his information, but he's given us enough to know that the demonstrators are smack dab in the mainstream of American public opinion. Their tax views are supported by an overwhelming majority of the public. Their views receive the overwhelming support of independents and are often supported by a majority of Republicans too.

And what about that Tea Party that Schoen's been pushing as the "new center" in American politics? Does the public agree with them, too? Er, not so much. The latest CNN poll shows that 53% of Americans disapprove of the Tea Party movement and only 28% approve. Those are the lowest numbers since the pollsters began tracking Tea Party popularity last year.

Oops. Looks like Schoen and Rasmussen will need to write a new book.

(One other thing: That CNN poll also shows that Hillary Clinton is still the country's most popular public figure. Just think what she might have accomplished if she hadn't used the firm of Penn, Schoen & Berland to run her last campaign.)

The Real Center

No wonder the faux-centrist/"Third Way" crowd hates OWS. The protests put the lie to phony notion that the "center" agrees with the corporate-funded policies they espouse. And they illustrate the fact that the real "center" holds opinions that are usually stigmatized as "progressive" inside the Beltway . Douglas Schoen characterizes those opinions as "a deep commitment to left-wing policies" --

-- that are frequently supported by most Republicans. A few more revelations like this and their whole scam will be exposed. That's why we're seeing the glint of hatchets swinging in the Potomac sun.

Schoen represents that partnership of pampered elites that is Beltway Bipartisanship, but the OWS protesters represents real bipartisanship. They speak for the genuine American majority, that movement that speaks for the people who have been misused, abused, and refused by powerful insider from both parties.

Schoen speaks as if this were 1970 revisited, but the players have changes places. Occupy Wall Street speaks for this year's Silent Majority - the 99% who have been disenfranchised by the corporate-driven political environment that spawned and feeds Mr. Schoen and his ilk. The moment for the triangulated tactics of the Schoen crowd has passed. The real center is waking up. It's corporatist policies, not the politics of protest, that will hurt a party's electoral chances today.

Politically speaking, they're the hippies now.

The President and his party wouldn't be foolish to adopt the rhetoric of Occupy Wall Street. It would be foolish to think this movement can be co-opted by words that aren't followed up with action. But the most foolish act of all would be to listen to compromised advice from a cadre of failed insiders who are quickly being left behind by the irreversible and irresistible flow of history.

Raising the Medicare Age: Discussing this Terrible, Awful, Not-So-Good Idea With Sam Seder

Richard Eskow — Mon, 12 Sep 2011 22:53:45 -0400

Here's an interview we did with Sam Seder today (Monday) on his Majority Report show. It's about raising the Medicare eligibility age. Great discussion (it's always a great show):

Richard Eskow on Raising the Medicare Eligibility Age: Sam Seder's Majority Report 9 12 11

What can we say. Terrible idea. It's bad. Not good. Ech.

(the interview runs about 14 minutes, but who's counting?)

Lawrence O'Donnell Is Completely Wrong About Deficits and Entitlements [video clip]

Richard Eskow — Sun, 17 Jul 2011 14:38:55 -0400

On most issues Lawrence O'Donnell is on the side of the angels. But O'Donnell, who held senior staff positions on Capitol Hill during the 1990's, is one of many Democrats and liberals who think the way to fix today's problems is by recycling yesterday's solutions - even when those solutions didn't even fix yesterday's problems. Nostalgia for the great compromises of the 90's is going to sink the Democratic Party, not help it. More importantly, it will lead to the wrong policy decisions.

Nowhere is this more evident than in the current deficit debate. When O'Donnell accepted Esquire's challenge to create his own "deficit commission," he was already reinforcing the mistaken idea that deficits are the nation's number one concern. I hosted The Young Turks broadcast (America's #1 online news show, I'm told!) for three days this week. The clip below shows O'Donnell's last comments on the deficit debate, along with our comments.

The short version of our reaction? Lawrence, we love ya, but you're completely wrong on this one. And this is exactly the kind of thinking that will drive us over a cliff if we stick with it:

The "Social Security Chain-CPI Massacre": Underhanded, Unnecessary, Unfair, Un-American

Richard Eskow — Thu, 30 Jun 2011 22:16:04 -0400

Do you hear a noise like power saws cutting away at your Social Security benefits? That's the sound of the politicians working on the "Chain Gang."

They're promoting the "chained CPI," Washington's latest gimmick for tricking voters and cutting their hard-earned benefits to protect the wealthy. That may sound like inflammatory rhetoric, but the numbers don't allow for any other conclusion. People retiring today could lose more than $18,000 in benefits over their lifetimes - and people who are already retired will feel the pain too.

What's wrong with this idea?

1) It's an underhanded way to cut Social Security benefits (its true intent).
2) It's unnecessary.
3) It's unfair to women, the poor, minorities, and the very elderly.
4) It reflects a un-American political culture of pessimism and lost faith in the future.

Any politician who signs onto a "chained CPI" approach to Social Security will feel the wrath of the voters - and deserves to.

No math required.

Although they're using hocus-pocus to make the idea sound complicated, it isn't. The government calculates the cost of living in order to do things like determine next year's Social Security benefits. The "chained CPI" approach would alter that calculation by including changes in the way people spend their money when prices go up.

As a government agency explains, "Pork and beef are two separate CPI item categories. If the price of pork increases while the price of beef does not, consumers might shift away from pork to beef." So if people can no longer afford pork, they're spending less. Under a chained-CPI approach cost of living adjustments (COLAs) would then go down.

See where this is going? If not, stick around.

Underhanded

The "chain gang" insists that this wouldn't be a benefit cut, just a more accurate calculation. That's an attractive argument with only one flaw: It's wrong. The "chained" approach would understate the cost of living for the elderly and disabled people who rely on Social Security.

In plain English, it would gyp them.

In fact, even the current system for calculate COLAs gyps them. Retired and disabled people pay twice as much for healthcare as the average person. Healthcare costs have been rising three times as quickly as overall inflation, so their living costs are already understated. Transportation costs are a much bigger piece of their budget, too, which changes the numbers.

What's worse, two of the areas targeted for additional government spending cuts are ... healthcare and transportation!

The chained CPI would kick this gypping process into overdrive by reducing the increases in their benefits. And while younger Americans might make cuts in their travel and health budgets, that's usually not an option for the elderly or the disabled, so the calculations will be even more inaccurate under this system.

The math is what makes the chained-CPI approach a benefit cut.. But the chain gang knows that a lot people are intimidated by math, so they hope voters -- and a lot of lawmakers and journalists -- won't understand what's being done to them.

That's what makes it underhanded.

Unnecessary

It bears repeating, since so many politicians want you to forget it: Social Security doesn't contribute to the deficit. It can't, by law. It's completely self-funded through the payroll tax (which is what makes the choice of the payroll tax for a tax 'holiday' so insidious).

What's more, the dollars involved are trivial when it comes to the budget debate. Politicians say they're looking for $4 trillion in cuts over ten years. Even if benefits did contribute to the deficit the chained CPI would only save $122 billion, a mere 2.8% of the target.

That's peanuts for them. But it's not peanuts for the average woman on Social Security. She only receives $890 per month. By the time she turns 80 this program will be taking $45 dollars out of each month's check - nearly $500 a year. Why would Democrats (or Republicans, for that matter) agree to use her spending money to balance the budget? They'd help an old lady across the street -- then pick her pocket. Why?

Because that's how you show you're fiscally "serious" in today's bizarre Beltway culture. This warped "bipartisan" value system was spawned in large part with money spread around town by people like billionaire Pete Peterson. They see cuts in Social Security and other spending as a way to shrink government and keep taxes low for folks like ... well, like billionaire Pete Peterson.

Remember the expression about "robbing Peter to pay Paul"? Cutting Social Security is a way of "robbing Pa to pay Peterson."

Unfair

The effects of the chained CPI are cumulative, so the longer you live the worse it gets. By the time you're eighty your benefits will have been cut by nearly 5% per year. Some chained-CPI supporters propose a "birthday bump" - small benefit increases after you've been retired for twenty years - but they wouldn't offset the cuts you will have endured before then, and they'll only benefit people who live long enough to "enjoy" them. (Minorities and lower-income people have shorter life expectancies, too, so the "bump" would unfairly benefit wealthier and whiter beneficiaries.)

The chained CPI would be unfair to women, who receive less in benefits on average than men and can least afford the cuts. They live longer than men, too, so they're more likely to see their benefits dwindle with every year that passes. (And remember, the "bump" won't offset those cuts.)

It would also be unfair to the middle class, which has has seen its retirement savings (much of which was invested in their houses) disappear because of Wall Street's shenanigans. And ir would be unfair to lower-income working people who are the least likely to have retirement savings or pension plans.

Un-American

Remember the paragraph about how the chained-CPI figure goes down if people can't afford pork? That's not a sound way to calculate the overall cost of living. If I can't afford cable TV and stop watching it, Time Warner's prices don't go down. But under this plan, my misfortune also becomes my little contribution to next year's benefit cut.

How would this work for Social Security? Let's see: If old people stop buying pork their "chained CPI" benefit will go down. If that forces them to live on catfood, their benefit goes down again. And if that forces them to switch to the local supermarket's cheap generic brand instead of the tastier cat foods (Fancy Feast's "Grilled" line was my late cat's favorite), benefits would go down even more.

It's a death spiral. Soon we'll be calculating the cost of survival, not the cost of living. It's a process that leads nowhere but down, until even survival is factored out of the equation.

Besides, what would it mean if we adopted the chained-CPI mentality? What are we saying about ourselves if we calculate our cost of living by subtracting out all the things we can no longer afford? The chained CPI is institutionalized pessimism. It's a way to prefabricate our own shrinking future, to accelerate an ever-diminishing way of life while hiding the truth from ourselves.

That's why it's un-American. We've always been a nation of optimists who believe in growth. The chained CPI reflects a new and diminished political culture - one that believes in a future of dwindling resources, increasing deprivation, and inability to meet our own promises.

Voters in both parties and across all demographic lines oppose Social Security cuts. They'll see this for what it is - a sucker punch to the middle class and the most vulnerable among us. If our leaders sign onto it they'll be making a tragic mistake that we - and they - will come to regret.

________________

REFERENCES

For more on the chained CPI's impact on women, see this report from the National Women's Law Center.

For more about its impact on disabled and elderly recipients, see the National Association for Social Insurance.

For more on the different rates of cost inflation for the elderly vs. the general population, see this Congressional Budget Office report.

For a thoughtful criticism of the chained-CPI approach from a conservative who served in the Social Security Administration under President Bush and supported Social Security privatization, see this piece by Andrew Biggs on the website of the American Enterprise Institute.
.

When A Socialist Speaks For Most Republicans, Who Speaks For You?

Richard Eskow — Tue, 28 Jun 2011 23:45:33 -0400

How broken is today's political debate? The only politician standing up for most Republican voters on today’s most burning political issue is. … a Socialist.

The question is whether we reduce the deficit only through spending cuts, or also by raising taxes on the rich. This should be an easy issue for Democrats to stand on ... and run on. A recent New York Times/CBS News poll showed that 72% of of those surveyed agreed that federal taxes should be raised for households making more than $250,000 - including 55% of Republicans. Yet even with the GOP leadership far to the right of the country on this issue, Democrats haven’t taken an unequivocal position.

Who's speaking for this Republican majority (and most everybody else) in Washington? Only Sen. Bernie Sanders, Socialist from Vermont. Sanders has unequivocally said that he won't support a deal to raise the debt ceiling unless it includes higher taxes on on the rich. Where are the Democrats? Nancy Pelosi's been marginalized from the discussions, even though a deal won't be possible without the support of Democrats in Congress. The White House and Harry Reid have refused to take a firm stand.

Sanders laid out his position in a speech in the Senate chamber yesterday with a “shared sacrifice" theme:

"The wealthiest Americans and the most profitable corporations in this country must pay their fair share. At least 50 percent of any deficit reduction package must come from revenue raised by ending tax breaks for the wealthy and eliminating tax loopholes that benefit large, profitable corporations and Wall Street financial institutions. A sensible deficit reduction package must also include significant cuts to unnecessary and wasteful Pentagon spending."

The Republicans insist on rejecting a majority of their own voters, as well as 74% of Independents and 83% of all Democrats, by pushing for a plan that would reduce government deficits exclusively through spending cuts - cuts that affect the middle class, poor people, and everyone who hopes to receive Social Security and Medicare benefits someday.

The "shared sacrifice" principle expressed by Sanders also included demands that there be no cuts to Medicare or Social Security. The 50/50 goal is a reasonable one, which makes it surprising that others haven't embraced it already. In fact, the only problem with a 50/50 split is that it may be too reasonable, now that the rich have become so much richer and the rest of the country has been forced to struggle so much.

But it's a mature and balanced approach, and it should be embraced by other politicians quickly. The radical right has already skewed the national debate so effectively that a nation wracked by joblessness, wage stagnation, and broad pockets of recession is only hearing about deficit reduction from its leaders. If we must obsess about deficits to the exclusion of more pressing problems - which tragically seems to be the case - then it's time to make sure that discussion is a sensible one.

The Sanders speech makes a number of excellent points, although at 90 minutes it's too long for its own good. (The Senator won national acclaim for a filibuster of the tax deal last year, but that doesn't mean every speech needs to be a filibuster.)

While the Republicans represent the radical right and Sanders represents the American majority, there are some ringers in the debate, too, like the Senate's Gang of Five (formerly the Gang of Six -- at this rate they'll soon be the Gang of Four). The Gang may show its colors soon, pretending to be “balanced” by pulling a sneaky rhetorical trick favored by the right-wing Pete Peterson crowd.

Here’s how the trick works: When discussions turn to raising taxes on the wealthy you'll hear them use phrases like "tax expenditures" instead. That's a code word for ending deductions that primarily benefit the middle class, like those that apply to mortgages and medical benefits. These "centrists" (who retain the name despite being far to the right of most Republicans) will try to convince people that this is a reasonable substitute for tax hikes on the rich. It's not.

There’s a reason why the Republicans, with their gift for manipulative phrasing, keep repeating the mantra “government spending … government spending … government spending …” They don’t want the discussion to include revenues as well as spending. But if it does, then they’ll throw the middle class under the bus with targeted reductions in tax expenditures that don’t favor the wealthy (reductions that always manage to exclude the wildly unpopular corporate tax breaks for oil and gas companies).

Republicans are playing chicken with the US economy. Like the dumb kids in Rebel Without a Cause they’re willing to drive the car off a cliff (with us in the back seat) – that is, unless the Democrats don’t cave first. Unfortunately, that’s too often been the response.

We’ve said that the “shared sacrifice” concept may be too reasonable – but not if it’s used as a line in the sand rather than another way for Democrats to negotiate against themselves. In fact, it may be the perfect way for Democrats (and any responsible Republicans) to say “this far and no further.” The President may want to avoid a showdown, but there can be no deal without Democrats in the House and Senate. They’re the ones on the front line. They’re the ones who must confront the reckless Republicans, those would-be rebels who really don’t have a cause … except further enriching their wealthy patrons.

The vast majority of Americans, including a majority of Republicans, are going unheard in this debate. This may be one of those moments when a reminder from a constituent ... or a flood of them ... is the only thing that can make our representative democracy act a little more representative.

______________________________

Tell your Representative to demand a fair deal here.

You can find more information on the unrepresented American Majority here.

Wanted: An Opposition Party, Not a Center/Right Coalition

Richard Eskow — Mon, 25 Apr 2011 22:45:24 -0400

Only two budget proposals are being 'taken seriously' in Washington right now. One adopts the rhetoric of "austerity economics," that grab-bag of right-wing misconceptions that's weakened the British economy and wounded its ruling coalition.

The other comes from the Republicans.

There's a third budget plan, too. It reflects the views most Americans hold - including, in some cases, most Republicans . But it's either being ignored or contemptuously dismissed by the People That Matter, apparently for that most traditionally British of reasons: it doesn't come from "the right sort of people."

What this country really needs right now is an opposition party, one that refuses to accept stale and discredited conservative ideas. The President and other Democrats have been governing as if they were in a coalition government with Republicans - and sometimes like the junior partner in that coalition. There are better ways to serve themselves, their party, and their country.

Fight Club

The front page of a Los Angeles weekly published last week illustrates just how skewed the American debate has become:

That's how the debate's being presented: In this corner, a center/right proposal which adopts some unpopular conservative ideas. And in this corner, a radical right proposal with ideas that majorities of all political persuasions hate. But the center/right proposal is described as coming from the "left," which may help explain why the left isn't very popular these days.

Granted, the Los Angeles Jewish Journal isn't a Beltway opinion shaper (although my colleague Marty Kaplan is a columnist there). But their headline shows how the Washington consensus has distorted public perception outside the Beltway. To many people President Obama represents the 'leftmost' side of the spectrum, even though his budget plan borrows liberally (you should forgive the expression) from a right-leaning philosophy that's rapidly losing credibility.

Oy.

President Clegg?

We're having a crucial national debate about our priorities and governing philosophies. That's a heck of a time for President Obama to position himself as the American Nick Clegg. Clegg, the leader of Great Britain's centrist Liberal Democrats, formed a coalition government with the Conservatives and gave their austerity program an aura of reasonableness and a dash of youthful vigor. Like Obama, Clegg strikes a Januslike pose, with rhetoric that faces left and compromises that face right. Clegg and his senior partner, Prime Minister David Cameron, even embraced a favorite slogan of the President's when they said they would "agree to disagree" on crucial matters.

It's not going well. While the British Conservatives are far more civilized than their American counterparts, they're still happy to undercut Clegg whenever it suits them. Clegg's posture of "reasonable centrism" has cost him both his base and swing voters, and has left him holding the bag as the economy flounders. Only 9% of likely voters now say they'll vote for a Liberal Democrat, down from a high of 30% one year ago. The Labor Party, which suffered what might be called a "whuppin'" last year, now dominates the polls at 39%. The Conservatives are holding steady at 35%, but austerity measures have cost Mr. Clegg's party most of the country's 'persuadable' and independent voters.

As well they should. As the New York Times reports, retail sales have fallen 2.5% in the year since Great Britain's austerity program began. Household income is projected to fall another 2%. Hundreds of thousands of jobs are being lost as a result of the cuts, triggering fears of another recession.

Of course, Great Britain is not the United States. Conservative leader Cameron is well to the left of American conservatives, and in many ways he's to the left of President Obama too. Cameron supports the country's national health system and is resisting calls to lower the top tax rate for high earners from its present level of 50%. President Obama, by contrast, is proposing to raise the top rate to 39.5% and offered only lip service to the public option.

And Great Britain has three major parties, not two. That means voters who aren't happy with the Conservative/Liberal Democratic coalition have an alternative.

The Loyal Opposition

Great Britain is a parliamentary democracy with a tradition of the "loyal opposition." As Clegg triangulated, the Labor Party assumed that role. And as the Liberal Democrats' fortunes have fallen, Labor's have risen. Where's our loyal opposition, our alternative to unpopular and failed austerity policies?

It might surprise most newspaper readers or cable news watchers, but there is one. It's in a subset of the Democratic Party called the Progressive Congressional Caucus. They've released a budget proposal that's more fiscally responsible than Ryan's, and which more accurately reflects voters' preferences.

But their budget plan has a serious problem: It has the word "progressive" attached to it. That immediately provokes an attitude of contemptuous dismissal from the media herd. (See the ever-predictable Dana Milbank for one of the saddest examples of this. I fear for his state of mind if he ever realizes his impact on the national discourse. That's not "snark." I really do.)

If the "P word" were stripped from its title page and this budget was given a dummy name (like the "American Business and Stability Council Plan For Economic Growth"), it would poll like gangbusters and be met with the appropriate journalistic genuflections. But the "P" is there (and so is the unfortunate name "the People's Budget"). That's one of the reasons that reporters are either mocking it Milbank style or, more typically, ignoring it altogether.

A Plan That Works

The Progressive Caucus budget actually cuts the deficit, which Paul Ryan's extremist plan fails to do. And where Ryan's budget was rejected in polling, polls suggest that the policies in this proposal would be even more popular than the President's. On the revenue side, for example, it creates additional brackets for very high earners and it establishes a more progressive estate tax that asks a bit more from the Paris Hiltons among us. In other words, this proposal does exactly what the public wants: It raises taxes on the rich.

The Progressive budget also addresses Social Security in the manner that's supported by strong majorities in both parties and among Tea Partiers and independents - first, by separating that program from an overall deficit discussion, and then by eliminating the payroll tax cap for employers and raising it for employee contributions. The proposal cuts more from the defense budget, which is also highly popular, and it restores the public option for health care (which received wide public support last year, including from a slim majority of Republicans in swing districts).

The Progressive budget also provides funds for creating jobs. Post-election polling showed that jobs are a much higher priority for the public than deficits, and recent polling confirms that.

Weak Tea

Obama's budget, by contrast, embraces the unpopular personal proposals from Erskine Bowles and Alan Simpson. It embraces the right-wing formulation of "two thirds spending cuts and one-third revenue increases," which ignores the stimulative effect of government spending. While the President's rhetoric is powerful, his proposal only offers a nebulous, Clegg-like cloud. The Republican Ryan budget, on the other hand, is clear and direct. (The President's proposal does, of course, have the virtue of not being pathologically destructive to the American dream - but that's setting the bar a little low, isn't it?)

Obama's proposal would be considered center/right by any reasonable measure. Now it's being upstaged by negotiations among the Senate's "Gang of Six," a group of three center/right Democrats and three Republicans. They're using the leverage given to them by that body's undemocratic structure to attempt a "compromise" - between the far-right GOP proposal, and the position of Democrats like Dick Durbin, who tacked to the right of the President even before negotiations begin.

That's not what the public wants. But if the progressive proposal's such an exciting road to fiscal and political success, and is supported by Democratic House leader Nancy Pelosi, how did the Jewish Journal come to believe that Obama represents the "left" side of the political spectrum?

Marginalized

I'd have to agree with the argument which says the progressive proposal is getting ignored because it won't get passed or even influence the final outcome. Its invisibility seems to say more about our media's "who's in/who's out" mindset than it does any Pravda-like suppression of dissident ideas.

But it's only treated as irrelevant because the Congressional Democrats have been marginalized by their own party, starting at the top with the White House and extending to the Senate. The President and the Senate leadership don't believe for a second that House Democrats will refuse to pass a budget that's been hammered out by President Obama - or by the Gang of Six, for that matter. They could probably defeat it if they did, but it's assumed that they'll be "responsible."

What's more, the White House has pre-empted and marginalized the progressive representatives with its centrist budget and talking points. As The Hill reports, "This year's budget battles have forged a loose bond between President Obama and Steny Hoyer (D-Md.) while revealing some distance between the White House and Nancy Pelosi (D-Calif.)." Hoyer's right-leaning opinions and longstanding intention to cut Social Security are unpopular with the general public, but they make him a handy ally for the Simpson/Bowles White House.

That leaves proposals like the Progressive Caucus budget out in the cold, even though they reflect majority opinion. Most people don't even know it exists. A Google News search on the phrase "Gang of Six" came up with 4,280 hits today, while "Ryan budget" came up with more than 16,000. "Progressive caucus budget" got 363 hits.

Choices

The President's lofty "the parties should stop squabbling" approach to the budget debate seems to be part of his approach toward winning re-election (although it's more likely to backfire). But it's no way to lead in a two-party democracy.

There's no doubt that the President can lead. As McClatchy reported, "Support for higher taxes rose by 5 percentage points after Obama called for that as one element of his deficit-reduction strategy last week. Opposition dropped by 6 points." But if he raises expectations only to abandon them without a serious fight, he won't be serving his country or his own future very well.

Voters don't want radical austerity that supports the newly rich, and they don't want "austerity lite" either. The President and his party should consider the fate of Nick Clegg and his Liberal Democrats before committing themselves to joining with the right in a "coalition government" that's doomed to fail. Sure, they'll eventually have to compromise to keep the government running. But before they do they should offer voters a real alternative, not just a cup of weak tea whose best quality is that it's not Republican cyanide.

This post was produced as part of the Curbing Wall Street project and the Strengthen Social Security campaign.

Why Progressives Keep On Losing and the Right Keeps On Winning

Richard Eskow — Sat, 09 Apr 2011 13:45:59 -0400

Congratulations! The "grand compromise" will cut nearly thirty nine billion dollars in needed government spending, which proves how "serious" everyone is about reducing the deficit. The grand compromisers could have cancelled the next ten years of tax subsidies for oil companies and cut the deficit by forty billion, but apparently that's not how serious people do things.

If the Republican Party were singing to its base today, the song would be the theme from Friends, "I'll Be There For You." And the Democrats would be singing "You Always Hurt the One You Love." We're being told we should celebrate a "compromise" in which Democrats gave up $38.5 billion in spending cuts, when the original Republican demand was for $32 billion. That means the Democrats only gave the Republicans 20% more (20.2135%, to be precise) than they originally demanded.

Okay, guys. You get an extra 20% -- and not a penny more!

Once again the unpopular views of a minority have been imposed on the majority. Others will rant and rave about the Democratic leadership, and in fact that process has already begun. But progressives in this country should be asking themselves a serious question: Why does the Tea Party seem to be so much more effective than the left as a movement?

It's a complicated question that deserves in-depth discussion, but some of the things that may be impeding progressives include excessive party loyalty, the desire for a charismatic leader (the "XFK phenomenon"), and the urge to prematurely celebrate accomplishments that are flawed and incomplete.

Why?

Why did Tea Partiers win such a major victory? Money, for starters. The Tea Party's generously funded by billionaires like the Koch Brothers, and ultra-conservative policies are given "nonpartisan" ideological cover by right-wing billionaire Pete Peterson and his network of allies and paid savants. Corporate campaign financing, now made limitless by the GOP's ideological packing of the Supreme Court, allows the mega-corporations of the U.S. Chamber of Commerce to impose policies that crush the middle class and smaller businesses. And decades' worth of funding for ad campaigns and "conservative think tanks" (an oxymoron, perhaps?) continue to lay the groundwork for destructive moves like the one we saw last night.

Progressives can't change the money equation without campaign finance reform, so that needs to be a priority.

And progressives can't be blamed for helping to elect a president who either misrepresented his positions on a number of issues or reversed himself once he was elected. (A sample: the health excise tax, which he opposed and later actively worked to enact; the individual mandate for health care coverage, which he opposed and then supported; some matters of civil liberties; and science policy).

But it's not as if progressives don't have any cards to play. Their policies are very popular, while those of the Tea Party and the Republicans are equally unpopular. Strong majorities in both political parties oppose cuts to Social Security and want to see the payroll tax cap raised, for example. Most people want the government to do more to create jobs. Only six percent of those polled think that reducing the deficit is Congress' highest priority. More people would like to see more done to end poverty.

If these popular positions weren't always being labelled "progressive" in the media, they'd probably be even more popular. The White House and other Democrats would be forced to respond to public pressure.

Despite the naysayers, the nation elected a President who presented himself as an unambiguous progressive and gave him both houses of Congress too. So it can be done. So what keeps going wrong, over and over?

24-Hour Party People

I didn't vote for Ralph Nader in 2000 or 2008. I've always believed that political change is best effected in this country through the two-party system. But that idea can be taken too far. The Democratic Party is a tool, a means to an end and not an end in itself.

And there's a world of difference between supporting the Democratic Party and supporting incumbents in the Democratic Party. The Tea Party did a very smart thing last year: They kicked out a few independents who didn't support them politically. Too many progressives followed the President's lead and pledged their fealty to Democratic incumbents who had devoted themselves to undermining causes supported both by progressives and the majority of Americans across the political spectrum.

Not everyone did that, of course. Progressive groups like Blue America are doing a brilliant job of targeting problem Democrats and promoting progressive challengers, and the union movement performed a valuable service for all Americans by supporting Sen. Blanche Lincoln's challenger in the Arkansas primary.

Challenging incumbents doesn't just help the progressive cause. Paradoxically, it helps the Democratic Party too, by forcing it to clarify its "brand" and espouse more popular positions than those it now holds.

Remember what Harry Truman said, which we will liberally paraphrase as follows: In a race between a Republican and a Republican, the Republican wins every time.

If progressives want to identify and work within the Democratic party, that's a worthwhile endeavor. But their relationship to the party should mirror what Thoreau said about his relationship to the world: Be in it, but not of it.

Premature Exhilaration

Progressive activists should celebrate accomplishments in health care and financial reform, but they should never forget what went wrong and why. Progressives were much too quick to celebrate both the health care and financial reform bills before they were done, and while issues of critical importance were still being debated.

We heard it during the financial reform debate. Progressives were all too quick to label the draft bill a success, even while it lacked (and continues to lack) critical provisions on "too big to fail" banks and the so-called Volcker rule. That removed any leverage the left might have had to win a better bill that had more restraints on banks (and would therefore have been more popular with the public).

As so often happens, we heard lectures from Democrats and some progressives about "what's politically possible." Yet when progressive measures found their way into open debate -- a process that was often blocked by Democrats like ex-Senator (and now film industry lobbyist) Chris Dodd -- we saw right-wing stalwarts like Sen. Tom Coburn and establishment Republicans like Sen. Chuck Grassley cross the aisle to support them. We also saw the Senate's only Socialist, Bernie Sanders, team with right-wing libertarian Ron Paul on a measure to audit the Federal Reserve.

The progressive inclination toward "premature exhilaration" over flawed Democratic bills is often matched with a flawed sense of what's politically possible... and politically popular.

The Right likes to call the health bill "Obamacare." A better name would be "BaucusConradNelsonLincolnLiebermanAndSomeOtherSenatorsCare." The president maintained a characteristically hands-off approach as the details were being worked out in the Senate, only stepping in at the last minute to push a provision he had specifically opposed as a candidate. If Democratic Senators had been under the same kind of political pressure that the Tea Party is now applying to Republicans, we'd have a significantly better (and significantly more popular) bill.

Instead the left was eagerly applauding a bill before it was finished, despite the fact that it was (and is) seriously flawed. Those of us who were strongly criticizing its weaknesses were subjected to a barrage of harsh and often personal attacks from progressives who accused us of undermining the President.

Once when I was on The Young Turks, a liberal writer said "If it's such a bad bill, why does Bernie Sanders support it?" I explained that Sanders held out for a long time and only signed on after he was given billions of dollars in additional funding for community health clinics. My answer then (and now) was this: "Bernie Sanders got billions of dollars for clinics in return for supporting this bill. What did you get?"

Tea Partiers instinctively understand that kind of strategy. In exploring the question "Was John Boehner bluffing all along?" Steve Kornacki also illustrates how a movement that places its goals over a political party's success can get results that are disproportionate to the popularity of those goals.

The "XFK" Phenomenon

Then there's something that might be called the "XFK Phenomenon." Progressives of a certain age recall the exciting days when JFK became president (I was six, so the memory's vague) and when RFK energized disillusioned young people and a broad range of other Americans. (I was fourteen then and very political, so I certainly remember that.)

A lot of progressives have been waiting, through decades of gloom and disappointment, for the next Kennedy-esque figure to lead them out of the gloom and rescue a suffering nation. This charismatic figure has no name, face, race, or gender. He or she is an "X" to be filled in with the dreams and yearning of a movement that longs for leadership.

A lot of people thought that Barack Obama might be that "XFK." I'll confess, I eventually came to think so myself. Other people thought it might be Hillary Clinton, or even (odd as the thought seems now) John Edwards.

Isn't it time to let go of that yearning? Activists succeed when they stop following leaders and start acting for themselves. The Tea Party is seen as a leaderless movement. By having no alliance to a party or a politician, it holds a credible veto threat over the Republicans and their leadership. There's something to learn from that.

Whatever your feelings about President Obama, he's not "XFK." XFK never existed, and like Clifford Odets' "Lefty," he ain't comin'. Activism starts at the ground floor, not at the top. While the President may not be today's JFK, much less its FDR, like any politician he's open to persuasion from progressives and the Democratic base. But progressives have to be willing to persuade - as gently or as strongly as the moment demands.

2021 Vision

Say what you will about Rep. Ryan's budget proposal, it's a vision. By proposing to dismantle Medicare for people retiring in 2021 and afterwards, he's laid out a radical alternative to today's policies. By slashing taxes for the wealthy and proposing deregulation for all industries, the Ryan plan envisions a future America: one where the environment is despoiled, the poor go unfed, and the middle class faces a lifetime of financial insecurity following by an old age of sickness and penury.

It may not be a good vision, but it's a vision.

Where's the progressive vision for 2021? Where's the dream people can seize upon and make their own? Where's the ideal that can energize activists? Where's the extreme position from which the Democrats can be "bargained down" so that they, too, can only get 20% more than they asked for when the negotiations began? If they're not going to do it, we have to do it for them.

Here's a start: First increase Social Security retirement benefits by 15%, across the board, by lifting the payroll tax cap and imposing a financial transactions tax. Second, increase income taxes on a sliding scale that goes up to 60% for the highest earners in the country. (It's been as high as 90% during periods of our greatest prosperity.) Third, add $500 billion to our stimulus spending over the next two years, and keep adding it until unemployment is down to 4%. Fourth, immediately add a public option, "Medicare For All" plan that's voluntarily available to Americans of all age brackets.

Have fun. Add your own visions. Dream. Then demand your dream. It's working for the Tea Party, and it can work for you.

One thing's for sure: The old definition of insanity, "doing the same thing and expecting different results," still holds. Whatever the progressive movement's doing right now, it's not working as well as it should. It's frustrating, but it's no reason to give up. Like a guy with a guitar said a century ago: Don't mourn, organize.