WaPo (inaccurately?) reports "consensus forming" on deficit

by Linda Beale

WaPo (inaccurately?) reports consensus forming on deficit
crossposted with Ataxingmatter

The buildup in the corporate media supporting the corporatist wishlist on budgeting is growing.  First there was the clamor about the Bowles-Simpson road map to conquering the deficit–depicted as a reasonable, middle-of-the-road approach.  Bowles-Simpson is a neo-liberal/neo-conservative group of people with little understanding of the predicament of the vulnerable middle class in this economy, and apparently as little creativeness for moving the economy out of the stagnation from the four decades of Reaganomics and into a new era of broad-based growth that lifts all boats, rather than just the yachts of the already rich and famous.

Then there was even more clamor about the more “radical” plan put forward by Alice Rivlin and cohorts.  Rivlin is another neo-liberal Clintonite who is perfectly willing to sacrifice the New Deal to get the neo-deal.

Obama doesn’t seem willing to fight any fight.  He quits before he starts, disgusting liberals who understand that a democracy cannot survive based on the kind of “free market capitalism” espoused by the oligarchs who benefit from it.  So there is already talk of extending the Bush tax cuts for the wealthy, which have nothing at all to do with jobs, entrepreneurship, innovation, or growth of the US economy and everything imaginable to do with elitism, power, and hording of productivity gains for the G.W. Bush fan club of have-mores.

So it is perhaps not so surprising that the WaPo is already declaring that a “consensus is forming on what steps to take in cutting the deficit.”  Story by Lori Montgomery, WaPo, Nov. 22, 2010.   Ms. Montgomery takes the pundits and neo-con/neo-lib descriptions as god’s truth as she describes “a surprising consensus” around “the sacrifices necessary to achieve those goals [of less debt and smaller government]” being “Big cuts at the Pentagon. Higher taxes, including those on home ownership and health care. Smaller Social Security checks and higher Medicare premiums.”  Once again, the neo-con faction has used its corporate-owned media to hone its message that there is no choice (false note of sadness) but to cut those deficit-causing “entitlements” like Social Security and Medicare.

The awful deed is required, she suggests, to avoid a “European-style debt crisis.” No real analysis is there.  Once again we see the proof in the pudding: the corporate media has discovered that it can deliver press releases and paid interpretations of events much more cheaply than it can do investigative journalism with smart journalists paid a decent salary and provided decent benefits.  Infotainment, not news; opinion, not facts; rehashing of partisan positions, not analysis.

  • No mention of the fact that the Euro zone nations do not have monetary sovereignty.  The story ends with the scare-tactice line (from a Republican strategist, so part of the framing intended to make it acceptable to cut Medicare and Social Security while providing more tax cuts to the wealthy) “if we don’t act [to cut the deficit], we will be Greece.”  That’s simply not true.  We are not in the same position as Greece.  We need to do some things, but we have many more choices than Greece (though the Republican path of tax cuts for the wealthy and spending increases on programs that benefit big corporate interests tend to reduce those choices).  While I don’t entirely agree with the monetarists who want us to print our way out of debt and deficits, there is some basis for printing more dollars to meet national needs, stimulate the economy, and avoid more borrowing.  That is not an option for Greece. 
  • No analysis of the tax proposals–lower rates even with closing some loopholes will generally mean more of the burden is passed to the middle class and taken from the wealthy.  Merely repeats the Republican notion that lower tax rates lead to economic growth (they don’t–just look at the historic pattern of growth and tax rates–we have higher growth when we have higher rates, likely because it leads to better allocation of resources).
  • No mention of the fact that the health reform bill, when it kicks in, should begin the process of reducing health care costs, or of the fact that a much more cost-effective solution–rather than cutting benefits to those vulnerable elderly and sick for whom Social Security and Medicare is a lifeline–would be to throw the rent-seeking health insurers out of the primary business of determining who gets health care and let them make their non-rentier profits on supplementing a national health care single-payersystem similar to Canada’s or Britain’s or Germany’s–anybody but our failed profits-for-financial-institutions-at-the-cost-of-care-for-ordinary-Americans system.
  • No mention of the fact that Social Security is not even officially part of the deficit–that in fact we have borrowed from the funds paid in by workers who are now retiring so that we could create a tax-haven economy for the wealthy and corporate elite or the fact that whatever shortfall Social Security might (but not necessarily will) face in future years is EASILY solvable by extending the tax to full wage income of all workers (and, for this purpose at least, acknowleding that payments from hedge and equity fund partnerships to service partners in respect of their “profits” interest are compensation that is subject to payroll taxation).  Social security should be off the table because it ain’t broke, any future fixing that it needs is simple and equitable, and it has been put on the table by the same monied elites that at the same time work to ensure that their favorite tax breaks and other benefits stay in the system (such as the charitable contribution deduction for the value of stock, rather than the basis that represents the owner’s actual investment in the stock).  Instead, the Bowles-Simpson right-wing dominated group would reduce benefits for all retirees by redefining their cost of living needs (in spite of the fact that the current formula is probably weighted too lightly on the kinds of expenses that the elderly face, they would suggest a formula that would be even less likely to keep the elderly who depend on SS on an even keel); means-test Social Security (thus destroying the key element of the near universal support of the program); and raise the retirement age (to 69) meaning that some people who get nothing whatsoever from the years invested and many in manual labor jobs would be worn out before able to retire.
  • No mention of the fact that  Alan Simpson, Obama’s choice to co-chair his so-called Commission on Fiscal Reform (it should have been called–neo-lib/neo-con commission for cutting benefits under Social Security and Medicare), has consistently targeted Social Security (and other New Deal programs) as a huge unearned entitlement that should just be gotten rid of or at least whittled down to the bare bones if at all possible.  See e.g., Alan Simpson Calls Social Security ‘Cow with 310 Million Tits,’ Causes Uproar, TPM Muckraker, Aug. 25, 2010.  It’s no surprise that a commission made up of elitists –including nine Republicans that the Business INsider site politely calls merely “tax averse” (see Beutler, Meet the 18 People Who Could Determine the Fate of Social Security“, Aug. 30, 2010) opts for solutions that favor elites.
  • No mention of the fact that Social Security funds were required to be invested in US Treasuries-(see Trust Fund FAQs,” Social Security Administration, February 18, 2010) 
    The SS surplus funded US debt at the same time that huge tax cuts were enacted in favor of corporate and wealthy elites, but now the neo-con/neo-lib move to decrease benefits is essentially a call to reneg on commitments made to those that funded the surplus and borrowing.
  • No mention of the fact that most of the Bowles-Simpson crew held pre-determined positions that favored reducing the programs that help the poor and vulnerable (see Beutler, Meet the 18 People Who Could Determine the Fate of Social Security“, Aug. 30, 2010) :
    • Bowles himself, a Wall Streeter Clintonite Dem who was not very strongly against privatization when he was chief of staff;
    • Simpson, who has supported privatization and benefit cuts to Social Security for deaces,
    • Rivlin, another bank-friendly Clintonite who has long argued for cutting Social Security benefits;
    • Stern, a former President of the SEIU who has supported the idea of investing Social Security funds in the stock market rather than in US Treasuries;
    • Cote, Republican CEO of Honeywell who has advocated cuts for military servicemen and women rather than defense contractors like Honeywell; 
    • Fudge, an Obama supporter who has been in business at Kraft Foods and Young & Rubicam (so is likely to support business friendly solutions whether they are good for the vulnerable or not)
    • Paul Ryan, Republican advocate of austerity budgeting, Social Security privatization, and Medicare vouchers
    • Jeb Hensarling, Republican advocate of austerity budgeting and privatization and cuts for Social Security and Medicare
    • Dave Camp, Michigan Republican that wants tax cuts, and Social Security privatization
    • Judd Gregg, Republican interested in raising retirement age to 70, privatizating Social Security, shrinking government by “starving the beast”, and yet doesn’t think tax cuts should be offset
    • Tom Coburn, Republican from Oklahoma  who says he’s “open to everything if it gets us where we need to go” regarding the commission’s deficit reduction aims, BUT hypocritically opposes not providing an additional tax cut for the wealthy.  Coburn wants to “dismantle large segments of the federal government” and wants all options on the table except preserving current structure and benefits or increasing SS taxes (on the wealthy).  He also wants to cut pay and benefits for military dependents, retirees and survivors.  Funny, he doesn’t mention generals or defense contractors.  Coburn has consistently worked to eliminate the New Deal programs oriented towards the ordinary and middle class folks.
    • Mike Crapo, Republican who wants to privatize Social Security and reduce benefits for anyone born after Jan.1, 1950.
    • John Spratt, blue-dog Democrat who has long advocated  changes to Social Security, including supplementing SS with private plans
    • Xavier Becerra, democrat who may actually oppose changing Social Security
    • Jan Schakowsky, progressive democrat who opposes entitlement cuts and fought for the public option
    • Kent Conrad, Democratic budget hawk who opposed the public option, supports passing new tax cuts that extend the Bush cuts for everybody, though arguing for tax increases eventually
    • Max Baucus, Democrat who supported Bush tax cuts (imagine where we might be if he had fought instead for ordinary Americans) and has consistently supported decimating the estate tax and has supported the idea of Social Security cuts
    • Dick Durbin, a progressive Democrat who nonetheless has been open to cutting Social Security

No analysis is there.  What Montgomery puts forward as supporting the idea of a national consensus is the Bowles-Simpson vague statement of a roadmap; the Rivlin-Domenici panel, another neo-lib/neo-con dominated group whose prescriptions are predictable; Frank Keating, a Republican who wants lower income-tax rates and a national sales tax (perfect for the wealthy in passing the burden of taxation to the middle class); and retired military officers and national security experts who agree that the hugely bloated Pentagon budget can be reduced (can’t we ALL agree on that one?).  That’s a national consensus?  I don’t think so.

Regretably, she ends with a quote from Domenici (not a moderate by any means) saying that the fact that there is some common ground about cuts and tax increases among this disparate group  is “‘a testament to the moderate nature’ of the ideas under discussion”.  No–it is a testament to the ability of one view to dominate the media and to be presented as a growing consensus on the need to cut the welfare programs that are the backbone of the New Deal, in order to frame the discussion in a way that pushes it towards a single conclusion.

For a different perspective, see DAvid Coates, Eating the Old at Thanksgiving (nov. 22, 2010).