obama deficit commission

A Deficit Pitch Without Social Security--The Only Chance of Winning

Josh Rosenblum — Wed, 07 Sep 2011 09:36:45 -0400

This past Friday night in Washington, a New York Mets pitcher threw the type of pitch President Obama must use in his march to stop any new proposals to cut Social Security if he plans to make it through the game of the deficit talks and his reelection. In the recent past the President and his teams have pitched a slew of failed curveballs that would cut our Social Security. The number 43 Mets pitcher R.A. Dickey helped beat the Nationals 7-3 with his slow velocity, highly unpredictable knuckleball. The 44th President and his multitude of committees have taken an approach to cutting the deficit that replicates a tied baseball game, with no end in sight. Could knuckle balls from a President battling to win the game, save the economy, and win reelection save the tied ball game called the deficit debate? Let’s take a look at the tape.

R.A. Dickey has been pitching great this season, and has the best earned run average of the starters on the Mets but you wouldn’t know it by looking at his record of 7-11, which reflects injuries on the Mets but also the poorest run support from hitters out of all the Mets starting pitchers. It’s unclear to Mets fans why Dickey hasn’t gotten the run support he so deserves, just as it’s unclear to the general public why we haven’t gotten the support Social Security deserves from the administration.

If the President throws a Social Security curveball that cuts our benefits to the GOP team trying to beat him, he ought to get ready not to receive any run support, not just from Democrats and the left, but also from the independents and moderate Republicans his advisers are so intent on courting again. By attempting a pitch that doesn’t appeal to his base, independent voters, and moderate Republicans, he may lose the game, the season, and ultimately his Presidency.

But President Obama can still throw an amazing Dickey-like pitch to the GOP’s deficit, defeat the nonsense, not cut Social Security benefits, and win reelection. If Obama fights for Social Security, America’s fans will cheer for him and we’ll give him all the run support he needs to win in 2012.

Social Security has remained one of America’s most successful programs for 76 years. Before it existed and since it’s existed, Wall Street and right-wing conservatives have been telling us how much it stinks, hoping we might one day believe such lies through repetition. Even popular Republican President Dwight Eisenhower recognized how cutting it would be plain “stupid.” But that’s exactly what each of the deficit groups have attempted to do, each throwing their own curveball that would lead to Social Security cuts.

The President started his deficit pitching rotation with the grizzled, often irrelevant old-timers Bowles and Simpson, who proposed to cut Social Security with the indifference of players who knew their time had passed. He then hoped the journeymen Gang of 6 could take on the deficit, but the bipartisan group of men never seemed to materialize on the playing field. Obama’s team, “America,” never got far in the batting order without loading the bases against the “GOP Deficit” team, which lead up to another call to the bullpen. An enthusiastic reliever, Vice President Biden came charging on to the field to lead his bipartisan “gang of dudes” with every intention to save the game, and no ability to corral the Republicans who calmly watched every one of his pitches thrown for balls float by and hit every strike for an intentional foul ball, upping the pitch count until Biden’s arm had vanished.

Then came the President himself, rolling up his sleeves and bringing back the long vanished player-coach, determined to get the save for America, but giving the GOP a few hits and intentional walks in the process so he could get the job done. He’s out on the field and he appears determined to win for America, at any cost to his future as a pitcher and as our President, but the fans are hopeful he’ll win for his future and ours.

The President even told us about his curveball to the GOP, who seem determined to fight against America, 1 minute in to this video, when he acknowledges that he’d offered the Republican Speaker a deal to cut Social Security, which suggests he may throw the same bad curve again if the Supercommittee wants to take it up.

In the next couple of weeks President Obama may let loose with another Social Security curveballl, telling us we need a COLA cut for Social Security. But America isn’t certain whether player-coach Obama would put the important program on the chopping block again for the Supercommittee and the GOP Deficit. This pitch to the GOP Deficit leads to one place—a lost game for the President, and a lost future for Democrats. But a well-placed knuckleball that leaves Social Security out of the ball game and out of the deficit talks would help America and Obama win. If the President throws a slow, hanging knuckleball that’s tough for Republicans to hit but that his own team can cheer for, he’ll win the hearts of Americans including Democrats, independents and reasonable Republicans, whether the Washington Republicans try to screw over America again or not with attempted cuts to Social Security.

Simpson/Bowles: A Predawn Raid on the Middle Class

Richard Eskow — Fri, 12 Nov 2010 11:36:31 -0500

The following was co-written with Roger Hickey.

Wednesday, the Presidential Deficit Commission's co-chairs released a radically right-wing budget proposal. They acted without any prior announcement, just three weeks before the entire Commission was scheduled to deliver its collective report. Consider it as a sneak attack on the middle class, a pre-dawn raid on the American dream.

Many things can and will be said about this draft proposal, but first and foremost it must be considered an admission of failure. Erskine Bowles and Alan Simpson were asked by the President to lead a commission that was to agree on a set of proposals most of its members could endorse. This proposal is their admission that they've failed, and it should be read with that failure of leadership in mind.

It's also important to remember that this is not an isolated act. The release of their proposal today was the culmination of a highly coordinated and extremely well-funded assault led by deficit hawks willing to harm our already-weak economy in order to cut government, and who would slash important programs like Social Security and Medicare to advance their agenda.

And the timing of this proposal was no accident. Simpson and Bowles know they don't have the 14 votes they need to issue a report. Releasing this proposal may be a desperate attempt to pressure some of their Commission own members. Or they may be trying to deliver some "shock and awe" by issuing a proposal so extreme that any subsequent package of cuts, no matter how unfair, will seem reasonable by comparison.

Whatever their motives, the President who appointed this Commission is now in an ideal position to reject their conclusions. For one thing, endorsing them would violate his campaign promise not raise the retirement age or to cut Social Security benefits. (Check it our here.) Instead he should reiterate his argument that we need to reduce runaway health care costs, not cut or cap Medicare benefits, if we want to fix the deficit. As for Simpson and Bowles, this attempted end run around their own Commission shows they've failed to carry out the mission he gave them. It would have been more honorable if they had simply resigned. Since they haven't, the President should look elsewhere for good ideas.

Because of the covert way this was done, only their ideological allies were given a preview of the proposal. But an initial reading makes it clear that their agenda is a radical upward redistribution of national wealth and resources, with budget policy as the vehicle and "deficit reduction" as the rhetorical smokescreen.

The bald guy says everybody should get a haircut

It's the perfect metaphor for this proposal: The cue-ball-headed Mr. Simpson is proposing an "across-the-board 'haircut'" for public programs while saying absolutely nothing about Bush's tax cuts, a budget-busting bonanza for the ultra wealthy that Republicans are pledging to defend at all costs.

Their proposal calls for great sacrifices from the elderly, college students, and veterans. Surely, people will say, a plan that asks so much of those in need must also call for increased taxes on the wealthiest Americans. After all, their tax burden will be lower than it was for most of the 20th Century, even if the Bush cuts are allowed to expire. So they'll share in the sacrifice too, right?

Nope. When it comes to asking the super rich to pay their fair share, these deficit hawks suddenly go silent. If these Commissioners lack the political will to call for rolling back the Bush tax cuts, they should go back to Wyoming and North Carolina.

The US economy and the global economic system are still struggling to recover from the worst recession since the 1930s. The nation urgently needs more jobs and increased economic growth. Instead the co-chairs have laid out a reckless set of proposals that would impose crippling austerity on the US government precisely when we need a strong increase in public investment.

This plan is a recipe for pushing the economy into another recession.

In the past, Bowles and Simpson have given lip service to the reality that any spending cuts must wait until we've achieved a strong economic recovery and sustained growth. But the document they released today would send the economy right off a cliff. They're proposing major cuts to public spending that start in 2012, when most economists expect the economy will still be weak and fragile. Even if your only goal is a balanced budget, that's a bad idea. A smart deficit hawk would first work to create jobs, increase income, and expand business activity, all of which reduce deficits in the long run. These are not smart deficit hawks.

Co-Chairs Simpson and Bowles acknowledge that Social Security contributes nothing to the Federal deficit. That doesn't prevent them from pushing cost-of-living changes that would harm current retirees, along with future increases in the retirement age that would reduce benefits even more for those who retire in the years to come.

The Campaign for America's Future just conducted election day polling which found that strong majorities of Americans - including Tea Party supporters - strongly oppose the cuts they're proposing. Most voters of all political persuasions prefer eliminating the cap that limits the taxes wealthy individuals now pay for Social Security. The truly 'bipartisan' solution, embraced by Democrats and Republicans alike, is to lift the tax cap while protecting benefits. That's the exact opposite of what Simpson and Bowles have proposed.

At a time when most Americans are worried about their jobs and everyone has just taken a huge hit to their retirement savings, any politician who embraces these proposals is committing political suicide. And any leader who has the public's best interests at heart will understand that these ideas must be rejected.

In Deficit "Town Meetings," People Reject America Speaks Stacked Deck

Roger Hickey — Sun, 27 Jun 2010 12:40:11 -0400

On Saturday, the group known as America Speaks (funded by Wall Street mogul Peter G. Peterson and two other foundations) brought together several thousand people in meetings in 60 cities. They gave participants misleading background information about the Federal deficit and economic options to achieve fiscal "balance" and future prosperity.

But Peterson cannot be pleased with the participants' mainly progressive policy choices, which will be presented on June 30 to the Deficit Commission that Peterson encouraged President Obama to create.

According to America Speaks own press release, when a scientifically selected group of participants picked up their electronic voting devices, they overwhelmingly supported proposals to

Raise tax rates on corporate income and those earning more than1 million.
Reduce military spending by 10 to 15 percent,
Create a carbon tax AND a securities-transaction tax.

This pretty progressive set of solutions emerged from the process many feared would be skewed to the solutions of conservative deficit hawks.

America Speaks was certainly not pushing the discussion in a progressive direction. The background materials - and policy options -- provided to participants were anything but fair and balanced, as analysis by economist Dean Baker demonstrated. Most egregious were the following:

Social Security. America Speaks gave participants no explanation of the fact that Social Security has its own source of funding, and thus does not contribute a dime to the deficit. Americans actually have been paying extra payroll taxes to create a trust fund that will make sure full benefits can be paid for decades into the future - and thus there is no rational reason to cut Social Security benefits (or raise the retirement age) in order to reduce the Federal deficit. But you wouldn't know that from the America Speaks materials or explanations. The Social Security program is simply presented as another big spending program and participants were presented with various ways to cut benefits. Given all this, a majority endorsed raising the retirement age for full benefits to 69 - a benefit cut for future retirees. But they also chose the progressive plan to raise the cap on taxable earnings subject to Social Security taxes, thus producing income for the system from greater portion of higher income peoples' wages.

Medicare and Medicaid. The America Speaks background materials actually did acknowledge that the rising budgetary costs of Medicare and Medicaid are driven by the fact that our whole health care system is broken - and costing both the private sector and government programs much more per person than in countries that have much better health outcomes. They even acknowledged that thoroughgoing reform - like single-payer health care system - is the only way to control those rising costs. However, when it came to options the participants were allowed to vote on, they were all variations on how much people wanted to cut Medicare and Medicaid benefits. At this point in the proceedings, the America Speaks founder and President, Carolyn Lukensmeyer had to acknowledge a rebellion in the ranks. People were demanding to have the option of voting for "single-payer" reform instead of cutting Medicare and Medicaid, and when she announced a complicated process of writing in that alternative, a roar of approval went up from the crowd in several locations. Their press release doesn't report how many people chose this difficult to select option, but the organization clearly had had to scramble to quell a revolt by participants. (Note: their press release states that people chose to "cut health care spending by at least 5 percent," but the choice was really to cut government health programs 5 percent - and my reading of the charts online was that only 21 percent of participants chose that option, with 71 percent choosing "no change.")

Austerity vs Growth. Finally, the organizers had heard enough protests from the Economic Policy Institute and the AFL-CIO that they felt they had to assure the audience that they were not prioritizing deficit reduction over the need for economic stimulus to get the economy to start producing jobs. But after that ritual disclaimer, they went on to devote the vast majority of the day to deficits as our defining economic program.

David Dyen, an LA participant, wrote in a post on firedoglake,

"While the cumulative effect of all this tends towards social safety net cuts rather than tax fairness, the crowd in Los Angeles, at least, wasn't biting at first. In surveying the discussion groups, most people seemed more concerned about the desperate need for more stimulus spending to move the economic recovery forward. They feared a double dip recession without job creation, and fretted about the lack of unemployment insurance extensions to help the less fortunate. "No one is talking about the long-term unemployed," said one participant. In the nationwide instant survey, taken by participants through electronic devices at all 19 America Speaks sites, 61% said the government needed to do more to strengthen the recovery, with only 25% opposed. Even with a push poll question asking if participants supported government programs to increase growth "if it increases the deficit," got a majority, 51%, of the nation-wide group of participants.

My next day posting here - claiming participants mostly rejected conservative nostrums - is based on watching the process online, from reports from people who attended events around the country - and on a fairly sketchy press release put out by America Speaks on Thursday, just after the town meetings. But America Speaks billed these events as a nation-wide scientific experiment in finding out what the "American people" think about the economic way forward. They are thus duty bound to publish a full report on the details of every single question - and voting results - that participants were asked to make decisions about. It is especially important that they put out this comprehensive report because they are also scheduled to summarize their findings before a special public meeting of the White House Deficit Commission on June 30. Only then can the people who participated in the process judge whether their surprisingly progressive decisions are being accurately presented to the Commission.

Note: Click here for a blog post on the Augusta, Maine America Speaks event by participant Barbara Burt, director of the Frances Perkins Center.

Deficit Commissions and Financial Transactions Taxes: Who Is Serious?

Dean Baker — Mon, 05 Apr 2010 21:36:25 -0400

Cross posted from Truthout

In the middle of the worst downturn since the Great Depression, with unemployment projected to remain at elevated levels for most of the next decade, we have the bizarre spectacle of a presidential commission on the deficit. The commission is supposed to issue a report to Congress by the end of the year on how to get the long-term deficit under control.

This commission contains more than a bit of the theater of the absurd. At the moment, the only force sustaining the economy and keeping unemployment from rising further is the large deficit being run by the government. If we snapped our fingers and eliminated the deficit tomorrow, we would see the unemployment rate rise well into the double digits. The deficit creates demand in the economy. It is really simple; if the government spends more money, then it will employ more people. If we cut back this support for the economy, fewer people would be employed.

But Washington politicians have trouble saying what is obviously true. So, instead of talking about putting 15 million people back to work, we are talking about curbing the deficit. This would be like creating a commission on water conservation as we struggle to get enough water to quench a fire threatening the capital. But that's where politics in the United States is right now.

The deficit commission's co-chairs, former Wyoming Sen. Alan Simpson and Erskine Bowles, a former chief of staff to President Clinton, insist that everything is on the table. In particular, they have both touted their willingness to support cuts in Social Security. It is always impressive to see wealthy and well-connected people who have the courage to take away benefits for which middle-income people have worked and paid.

As the Social Security trustees report shows, Social Security benefits will be fully funded by its designated tax through 2037. The Congressional Budget Office projects that the payroll taxes will be sufficient to pay full benefits through 2044. So, when Simpson and Bowles say that they are anxious to cut workers' Social Security benefits, they are pledging to take away benefits that these workers have already paid for with their taxes. These guys probably rip off employees on their wages too.

If Simpson and Bowles really gave a damn about the deficit, they would look to where the money is and support a tax on financial speculation. A modest set of financial transactions could easily raise more than $100 billion a year. A modest tax on trades (e.g. 0.5 percent on stock trades and 0.02 percent on trades of futures and credit default swaps) would have almost no impact on ordinary investors. In fact, such taxes would just raise transactions costs back to where they were in the late 80s or early 90s, years when the United States certainly had a vibrant capital market. However, even these modest taxes would impose substantial costs on traders who are actively speculating in these markets, and they could raise lots of money.

The United Kingdom raises the equivalent of $40 billion a year in the United States by just taxing stock trades. Applying the tax to trades of futures, options, credit default swaps, and other derivative instruments traded by banks would substantially increase this amount.

The opponents of this tax insist that it will not raise much revenue and that it is not possible to do without an international agreement. These objections are just excuses to protect Wall Street. The experience of the UK shows that the claims are not true (i.e. lies). The UK shows that it is possible to have the tax in one country and that it can raise plenty of revenue. When people tell us otherwise, we should just tell them to go collect their paycheck from Goldman Sachs and stop bothering us with nonsense.

So, when the deficit commission issues its report, if it comes with a recommendation to cut Social Security and without a recommendation for a FTT, we know what to do with it. Such a report would be worth as much as one of Lehman's Repo 105's or a credit default swap from AIG. Congress should send this deficit commission report back to Wall Street and tell them where to put it.

Dean Baker is the Co-director of the Center for Economic and Policy Research

Social Security Works for Veterans

Alex Lawson — Mon, 05 Apr 2010 13:34:24 -0400

This is the fifth installment in our Social Security Works series. So far, we have seen how Social Security works for America, how Social Security works for women, how Social Security works for people of color, how Social Security works for people with disabilities, and today we will show how Social Security works for Veterans.

Veterans and their families make up almost 40 percent of the adult Social Security beneficiary population. This means two out of every five beneficiaries either are veterans or reside with family members who are veterans.

• Nearly one out of every four adult Social Security beneficiaries has served in the military

• Of the 23.1 million veterans, 9.4 million veterans collect Social Security benefits

• The largest number of veterans receiving Social Security benefits served during World War II: there are 3.6 million such veterans

While the overall Social Security beneficiary population doubled from 1968 through 2004, the number of veterans receiving Social Security more than quadrupled, increasing from just over 2 million to 9.4 million veterans, during the same period.

• The percentage of Social Security beneficiaries who have served in the military has approximately doubled since the late 1960s

Number of Social Security beneficiaries and the percentage who are veterans, 1968–2004

There is a low incidence of poverty and near poverty among veterans compared to nonveterans.

• Among veterans aged 62-74, only 3.5 percent are poor and only 11.5 percent have income below 150 percent of poverty

• For older veterans aged 75-84, 3.6 percent are poor and 15 percent have income below 150 percent of poverty

• In the oldest age group, veterans aged 85 or older, only 2.9 percent are poor and 12.8 percent have income below 150 percent of poverty

• Ninety-seven percent of veterans receiving Social Security are male compared with only 43 percent of all Social Security beneficiaries

• Social Security benefit amounts are higher among veterans than among nonveterans, even when the sample of nonveterans is restricted to men

• Among the veteran population receiving Social Security benefits, 73 percent are married and about 83 percent have finished high school, significantly more than for the overall Social Security beneficiary population where 54 percent of beneficiaries are married and 73 percent of beneficiaries have finished high school

Military personnel have been covered under Social Security since 1957, and those who served in 2001 or earlier receive special credits that augment their earnings for the purpose of computing Social Security benefits. Congress has also provided special credits for veterans who served before the military was brought under the Social Security system.

• For each month of active-duty service from September 1940 through 1956, a person is credited with $160 of earnings for the purpose of computing Social Security benefits

• For those who served between 1957 and 1977, credits equal $300 for each quarter of active-duty pay

• Those serving between 1978 and 2001 receive credits equal to an additional $100 in earnings for each $300 they receive in active-duty pay (total credits may not exceed $1,200 a year)

Social Security works for Veterans, Social Security works for America.

This blog series is a joint project of America's Future and Social Security Works and is jointly written by Alex Lawson and Todd Pinkus..

Obama Packs Debt Commission with Social Security Looters

Matthew Skomarovsky — Mon, 29 Mar 2010 20:31:30 -0400

This post originally appeared on AlterNet.org.

The most generous bank bailout in history has amplified Wall Street's considerable political influence, and the economic implications of this democratic calamity go well beyond bloated bonuses. Over the past year, the financial propaganda machine has set its sights on Social Security, launching a massive assault on one of the nation's most important economic programs. But rather than push back against the flawed economic assumptions of the nation's financial elite, President Barack Obama appears to be advancing their arguments, and is now poised to repeat George W. Bush's politically perilous efforts to gut Social Security.

A decade of wars, tax cuts for the wealthy, and the fallout from Wall Street's housing bubble have almost tripled U.S. public debt since 2001, from $5 trillion to $14 trillion. Big, scary numbers like this, along with carefully timed downgrade warnings from Wall Street's obedient rating agencies and continuing worries about the financial collapse of Greece, Portugal and other nations have changed the political climate in Washington, breathing new life into decades-old schemes to slash Social Security and Medicare entitlements.

Defending Social Security does indeed sound like yesterday's issue -- a fight the people won when they defeated Bush's attempt to privatize the system in 2005. Our Social Security program is currently solvent through 2037, while millions of Americans are unemployed, millions more are losing their homes, and still millions more are struggling to meet soaring health insurance costs after watching their retirement accounts dwindle in the financial collapse. Would the entitlement wolves -- primarily Wall Street executives who stand to reap billions from Social Security privatization -- really have the gall to go after Social Security now? In a word, yes.

Global deficit jitters and U.S. political uncertainties associated with Scott Brown's surprise Senate victory in Massachusetts have helped fuel the fire at propaganda campaigns like the Wall Street tycoon-funded IOUSA and Fiscal Times. The White House is now either on the budgetary defensive, or exploiting the moment to exact unpopular entitlement cuts it was already preparing to make. Regardless, this week's New York Times' front page confirms that "reforming" Social Security could very well be a top priority for Obama in 2010. According to anonymous White House officials and budget analysts, because the Medicare cut under the health care reform bill "effectively takes those fast-growing entitlement programs off the table for deficit reduction … [Social Security] now stands as the likeliest source of the sort of large savings needed to bring projected annual deficits to sustainable levels."

In other words, because rapidly rising Medicare costs were not effectively contained by health care reform -- it would have hurt the health care industry -- slowly rising Social Security costs will instead have to get the axe. Instead of weaning corporations—banks, insurance companies, war contractors—off the federal teat, the administration is seriously considering punishing seniors.

The Debt Commission

In January, pressure from a broad spectrum of activist groups killed an amendment by senators Kent Conrad, D-North Dakota, and Judd Gregg, D-New Hampshire, to create a special bipartisan commission that would submit a broad deficit-reducing plan to Congress for an up or down vote by year-end. The commission's bipartisan makeup, its procedural restrictions in Congress, and the timing of its recommendations – arriving just after the midterm elections – were all designed to insulate the decision-makers from popular pressures that might take entitlement "reform" off the table. Moreover, because the 18-member commission (10 Democrats, eight Republicans) would require 14 votes for in order to report its recommendations, giving both parties veto power, cuts to Social Security and Medicare were widely assumed to be a necessary component of any consensus. In order for the commission to accomplish anything, Democrats would have to concede such cuts to Republicans in return for tax increases.

After the defeat of the Conrad-Gregg commission, groups defending Social Security had little time to rejoice before Obama resuscitated the plan, creating the National Commission on Fiscal Responsibility and Reform by executive order. While the Commission's proposals will not be limited to an up or down vote in Congress, it's otherwise exactly as Conrad-Gregg envisioned, and Pelosi and Reid have promised to put them to a vote before the end of the current session of Congress.

Obama's deficit commission is actually much older than Conrad-Gregg. Its history as a vehicle for reforming Social Security goes back to 1981, when it was given life under President Ronald Reagan as the Greenspan Commission (guess who chaired it). The commission's first act was to raise Social Security payroll taxes across the board and lower benefits via changes to cost of living adjustments. Bill Clinton revived the commission many times during the '90s, each time with a slightly new name and slightly new members, always stacked to recommend partial privatization, which critics on the left mocked as "a solution in search of a problem." But Clinton thought it politically risky to proceed with its recommendations on his own, and in a little-known chapter to that story, his chief of staff, Erskine Bowles, helped negotiate a secret pact with Newt Gingrich in late 1997 to unite behind the commission's proposals to raise the Social Security retirement age and begin privatization.

The pact collapsed when the Monica Lewinsky scandal broke just days before Clinton was set to announce it. George W. Bush quickly reconstituted the commission in 2001 and adopted its core proposal – Social Security privatization – as the centerpiece to his second-term agenda in 2005. The developing quagmire in Iraq and Bush’s consequent unpopularity gave Democrats, with public outcry behind them, the confidence to unite against it, even though Democratic leaders had supported similar measures in the '90s, and the plan was soon declared dead.

Obama Stacks the Deck

The seasoned networks of money and influence behind the commission's apparent immortality, including "Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly," have been outlined by noted economic journalist William Greider, among others. What's received comparatively little attention so far, however, is the composition of Obama's picks for the commission, what interests they represent, and what that reveals about the White House’s own strategy.

While some optimists have predicted that the 14-vote requirement guarantees gridlock, Obama may have already given Republicans the votes needed to put Social Security under the knife.

Starting at the top, the commission's two co-chairs are both veteran Social Security hawks. The Democrat is Erskine Bowles. Described by Business Week in 1998 as "Corporate America’s Friend in the White House," Bowles is president of the University of North Carolina and a venture capitalist with close ties to Wall Street. He sits on the board of Morgan Stanley and General Motors, both of which have received multi-billion dollar government bailouts since the start of the financial crisis. The finance, insurance and real estate (FIRE) sector was by far the largest donor to Bowles in his unsuccessful Senate campaigns in 2002 and 2004, donating over $3 million. His wife, Crandall Bowles, is on the board of JPMorgan Chase, making the couple two of the biggest beneficiaries of the government's financial welfare over the past two years. Crandall Bowles also gave over $14,000 to Obama's 2008 presidential campaign. Both are members of the Business Council, a prestigious association of major CEOs.

Bowles' Republican co-chair, Alan Simpson, is a former Republican senator who pushed (unsuccessfully) for a back-door benefit cut to Social Security benefits in the '90s by tampering with its cost-of-living adjustment and attacked AARP for its defense of Medicare. Simpson's former Senate aide, Chuck Blahous, is a prolific crusader against Social Security and was executive director of Bush's commission in 2001. In a warning sign for Social Security advocates, Blahous and Robert Reischauer, another policy insider who penned a memo in 2009 with fellow Brookings Institution elites calling for Obama to take "action to stem the growth of Social Security and Medicare," were recently nominated by Obama to be Social Security Trustees. (The Blahous pick he apparently owed to Senator Mitch McConnell.)

Reischauer has close ties to economic wrecking ball Robert Rubin, the Goldman Sachs chairman who became Clinton Treasury Secretary and pushed through radical deregulatory banking laws, then went to Citigroup to score $120 million for driving his company into the ground. Rubin and Reischauer knew each other at both the Harvard Corporation and the Clinton White House, where Reischauer was director of CBO. Reischauer is on the advisory board of Rubin’s Hamilton Project, and the two most recent CBO directors have come straight from Hamilton.

One of Reischauer's co-signers of the Brookings memo, Alice Rivlin, is another fox Obama has put in charge of the Social Security henhouse. Former Vice Chair of the Federal Reserve under Greenspan at the peak of the tech bubble, and also a Hamilton Project board member, Rivlin will likely make another great Wall Street ally on the commission. In 2004 Rivlin co-authored (with Obama's current Office of Management and Budget Director Peter Orszag, among others) a 138-page Brookings report titled "Restoring Fiscal Sanity" advocating $47 billion in entitlement cuts, including an "increase in the retirement age under Social Security" and "more accurate inﬂation adjustments to Social Security beneﬁts."

Keep in mind that she supported this plan before most of Bush's military expenditures, before the Great Recession, and before the financial bailouts. If that's not enough, Rivlin, who gave roughly $10,000 to Obama's 2008 campaign, was also on the board of Public Agenda with Peter G Peterson, the private equity kingpin who has devoted literally billions to destroying Social Security during his lifetime. Public Agenda has organized research and events to refine elite strategies for pushing deficit reduction, including entitlement reform. From a recent Public Agenda forum titled Trillions of Reasons to Get Serious About Our Fiscal Future:

"Panelists agreed that the key word when talking about reducing the deficit should be 'sacrifice' and not just for the wealthy, a message to which most Americans might respond negatively."

That's three out of three votes for "sacrifice," and we haven't even gotten to Obama's other Republican pick, David Cote, who is CEO of Honeywell, a major defense contractor with millions in profits at stake in maintaining our out-of-control military budget. Cote is also a former executive at GE, another big military contractor, and director of JPMorgan Chase. Obama has named Cote, who supported the stimulus bill, as one of his favorite CEOs. He is additionally a senior adviser to KKR, the infamous leveraged buyout firm, and a member of the Business Roundtable, a powerful association of CEOs that has spent millions fighting for Social Security.

Obama's fifth pick is Ann Fudge, a major campaign bundler who already spends a bit of time around tables with the American banking elite. Fudge was chairman of the board of advertising firm Young & Rubicam Brands, which includes former Bear Stearns CEO Alan Schwartz, until 2006. She's now on the boards of Brookings and Rockefeller Foundation, both teeming with top Wall Street elites (including Prince, Parsons, Gupta, Hutchins, Johnson, Rubenstein and Wolstencroft, to name a few), as well as GE and Novartis Pharmaceuticals. With her extensive marketing experience, perhaps she'll be the one who figures out how to sell the commission's "sacrifices" to the public.

Bruce Reed, whom Bowles and Simpson recently named as the commission’s executive director, can help Fudge brainstorm slogans. Reed is CEO of the corporatist Democratic Leadership Council (previously chaired by Joe Lieberman for six years, and now by Hamilton Project advisory board member and Blue Dog Harold Ford, Jr), is very tight with Rahm Emmanuel (they wrote a book together), and coined the phrase “end welfare as we know it.” Any other social program Reed would like to end as we know it?

A foregone conclusion?

Andy Stern, president of SEIU, is Obama's only pick out of six who is sure to oppose Social Security cuts. Everyone else is likely open to slashing.

For the commission to reach an agreement, its Democrats will have to win the support of at least two Republicans, which will be nearly impossible unless spending cuts are among its proposals. That Obama’s picks are so amenable to, if not gunning for, some form of benefits cuts suggests the White House is indeed seeking such a "grand bargain" from the commission, not a stalemate. The odds are slim, especially given the commission’s history, that five of the 10 Democrats would defy the White House to kill such a bargain.

As the New York Times confirms, in establishing the group Obama has once again adopted a course favorable to his economic advisers and their Wall Street friends over the objections of his political team. How much of the usual looting this will involve remains to be seen. They seem to be proceeding carefully. Earlier, following Obama's recent spending freeze announcement, an anonymous official told the Times that spending cuts would start with earmarks in order to earn goodwill with the public, and then move on to more "popular entitlement programs."

"By helping to create a new atmosphere of fiscal discipline, it can actually also feed into debates over other components of the budget," the official said, briefing reporters on the condition of anonymity.

Which administration official might this be? Sadly, it could be just about anyone, as Obama’s economics team is dominated by Wall Street-friendly advisers, most of whom are close friends and proteges of Robert Rubin, and have been calling (pdf) for Social Security reductions for years. The March 23 Gray Lady front-pager mentions two of them, Orszag and Jason Furman, along with associate budget director Jeffrey Liebman, as likely masterminds. Both Orszag and Furman followed Rubin into Obama's inner circle from the Hamilton Project. Liebman too has a history of Social Security mischief – he was on the commission under Clinton.

If President Obama wants to get heavy handed about the deficit, he could start by putting an end to the disastrous and unpopular schemes that created it – the Bush tax cuts, the wars in Iraq and Afghanistan and the trillions of dollars funneled to Wall Street. Unfortunately, it looks like Obama has taken the bankers' bait: the only people disciplined by his fiscal retreat will be millions of senior citizens with the gall to believe that society should guarantee them a decent standard of living.

Matthew Skomarovsky is a co-founder of LittleSis.org, an involuntary facebook for powerful Americans. He is also co-director of the Public Accountability Initiative.

Social Security Works for People With Disabilities

Alex Lawson — Wed, 10 Mar 2010 16:10:57 -0500

This is the fourth installment in our Social Security Works series. So far, we have seen how Social Security works for America, how Social Security works for women, how Social Security works for people of color, and today we will show how Social Security works for people with disabilities.

Since 1956, the Social Security program has provided cash benefits to people with disabilities and their families.

In December 2008:

• 9.3 million people with disabilities, their spouses and children

• 7.4 million disabled workers under the full retirement age

• 1.9 million spouses or dependent children of disabled workers

• 870,000 disabled adult children of workers who are deceased, retired or disabled

• 230,000 disabled widows or widowers of deceased workers

• Payments to disabled beneficiaries totaled more than $8.6 billion.

As of December 31, 2008, 154.5 million workers—over three-fourths of the U.S. workforce—are insured for disability benefits through SSDI should they become permanently disabled and unable to work and support themselves and their families. Studies show that a 20-year-old worker has a 3-in-10 chance of becoming disabled before reaching retirement age.

DI provides monthly cash benefits that replace a portion of the earnings that are lost when a person can no longer work because of a disability. Benefits are based on an individual’s past earnings (up to an annual maximum), with higher replacement rates for lower wage workers. In 2008, disabled worker beneficiaries received an average monthly benefit of $1,063.10. Beneficiaries receive inflation-protected benefits as long as they remain disabled.

When the disabled worker reaches the full retirement age (currently between 65-67 years) SSDI ends and benefits are automatically converted to retired-worker benefits.

The following graph shows just how important Social Security is to keeping families with disabled workers out of poverty.

Disabled workers who do not have a sufficient employment history to be covered by Social Security Disability Insurance (SSDI) may qualify for assistance from Supplemental Security Income (SSI).

SSI payments were another source of income for about 1 out of 6 disabled beneficiaries. About 84 percent of recipients of Supplemental Security Income, or approximately 6.3 million people, received federally administered payments on the basis of a disability.

Social Security works for people with disabilities, Social Security works for America.

This blog series is a joint project of America's Future and Social Security Works.

Also posted at Daily Kos and The Seminal

Social Security Works for People of Color

Alex Lawson — Tue, 02 Mar 2010 16:32:54 -0500

This is the third installment in our Social Security Works series. So far, we have seen how Social Security works for America, how Social Security works for women, and today we will show how Social Security works for people of color.

Social Security is neutral with respect to race and ethnicity; the benefits it pays are a function of a worker’s earnings history and family situation.

People of color face numerous structural inequities throughout their lives that Social Security, because of its progressive benefit structure, helps to alleviate.

Communities of color receive higher average returns on what they have paid into the system than do other workers. Latinos and African Americans also rely on Social Security for a greater share of their income in retirement.

• Nearly five million African Americans receive Social Security benefits; roughly half of them are retired workers, and the other half are either disabled workers or the spouses or children of disabled, retired, or deceased workers
• African Americans earn 73 percent as much as whites, on average, but because of Social Security’s progressive benefit structure, their average retirement benefit is about 85 percent as much as whites’
• Latinos also receive lower average wages than the rest of the population. Because of the progressive benefit formula, Latinos tend to receive more back from Social Security relative to the taxes they pay into the system than does the rest of the population

• Social Security is a particularly important source of income for elderly Latinos. In the absence of Social Security, more than half of elderly Latinos would live in poverty
• As of 2002, Social Security lifted 673,000 elderly Latinos out of poverty
• In 2003, Social Security reduced the poverty rate among Latinos aged 65 and over from 50 percent to 19.5 percent, a reduction of 31 percentage points
• In 2003, Social Security reduced the poverty rate among African Americans aged 65 and over from 56 percent to 23.7 percent, a reduction of 32 percentage points

Social Security also greatly benefits families of color:
• Some 800,000 African American Social Security beneficiaries are children under 18; almost 1 in every 19 African American children receives a monthly Social Security check.
• African Americans benefit disproportionately from Social Security’s disability and survivors benefits, since they are more likely than other workers to become disabled or die before retiring.
• African Americans constitute 11.5 percent of all workers who are covered by Social Security but 17.6 percent of Social Security disability beneficiaries.
• While 15 percent of all U.S. children are African American, 23 percent of the children receiving Social Security survivors benefits are.
• African Americans benefit from the fact that Social Security benefits are based on a worker’s highest 35 years of earnings. (Earnings in other years are disregarded.) Because African Americans have double the unemployment rates of whites and experience longer average spells of unemployment, they have more years with no earnings than whites do, on average. By not counting some years of little or no earnings in calculating benefits, Social Security benefits African Americans.

Social Security works for people of color; Social Security works.

Also posted at The Seminal and Daily Kos. This series is a project of Social Security Works.

Social Security Works for Women

Alex Lawson — Thu, 25 Feb 2010 17:59:17 -0500

This is the second installment in our Social Security Works series. The first post focused on how Social Security works for America, and today we will show how Social Security works for women.

Since January 31, 1940, when Ida May Fuller was issued the first monthly retirement check in the amount of $22.54, Social Security has worked for women.

Social Security is neutral with respect to gender – individuals with identical earnings histories are treated the same in terms of benefits. But, with longer life expectancies than men, elderly women tend to live more years in retirement and have a greater chance of exhausting other sources of income.

• Women represent 57 percent of all Social Security beneficiaries age 62 and older and approximately 69 percent of beneficiaries age 85 and older
• Women reaching age 65 in 2007 are expected to live, on average, an additional 19.8 years compared with 17.5 years for men

In 2008, Social Security provided benefits to 31.3 million women. Women are:

• Over two-fifths of the beneficiaries of disabled worker benefits
• 99 percent of the spouses receiving Social Security benefits
• 99 percent of the nondisabled surviving beneficiaries
• 98 percent of the dually entitled, that is, persons entitled to benefits as retired workers and as spouses

Women are more likely than men to be out of the work force, or to have breaks in employment. Even with the narrowing gender gap in the rates of labor force participation, women often leave temporarily or permanently for pregnancy, child care, and other family care responsibilities.

As an insurance protection for older women, Social Security provides a modest benefit. Old-age insurance in 2006 supplied such a measure for women through an average monthly benefit of $904.

This bare-bones floor of protection provides elderly women, in Roosevelt's words, "security against the inevitable hazards and vicissitudes of life."

The poverty rate for women would be significantly higher without Social Security, increasing from 12.4 percent to over 50 percent.
• In 2007, Social Security kept 39.5 percent of women out of poverty
• In 2005, 42 percent of women over age 62 relied on Social Security for 90 percent or more of their income, compared to 28 percent of men
• In 2007, for unmarried women – including widows – age 65 and older, Social Security comprises 48 percent of their total income. In contrast, Social Security benefits comprise only 37 percent of unmarried elderly men's income and only 30 percent of elderly couples' income

Social Security works for women; Social Security works for America.

This blog series is a joint project of America's Future and Social Security Works.

Also posted at Daily Kos and The Seminal