Wall Street Committing MILLIONS for Social Security Deform


CARL BLOICE    blackcommentator.com

This is how it goes down.

If a proposal to undermine Social Security, Medicare
and Medicaid comes before the new Congress, all
the members of that body will have to show where
they stand. Although it will be easier now that the
election is over, that will still be a political problem.
And so, under the banner of “deficit reduction,” and
a threatened “fiscal cliff,” a drive is underway to cut
a backroom legislative deal. When the secret horse-
trading is over, a package will be presented for
approval and for which no one will take
responsibility for any of its individual parts. It’s
called a “grand bargain.”

The incoming administration has no mandate to do
anything but uphold Reid’s pledge

The people of the country do not want to reduce the
economic security and well being of seniors, or to
sharply reduce healthcare provisions for low-income
people and the disabled. That’s why the matter was
never debated during the campaign. Now the
thinking is that this can be accomplished between
the “lame duck” period now and when the new
Congress convenes January 3.

It’s a strange view of democracy, wherein if you can’t
get enough of the peoples’ elected representatives to
approve of something, you extort it out in a
backroom somewhere in Washington. Of course, it’s
all justified in the name of “bi-partisanship” and

“Poll after poll has shown that the public rejects the
millionaire-oriented, tax-cutting, government-
slashing austerity plan known as “Simpson Bowles,”
Richard (RJ) Eskow of the Campaign For America’s
Future, wrote last week. “And yet politicians in both
parties keep trying to force it through the legislative
process under the banner of a `Grand Bargain.’ Word
is they’re going to try again, either during the lame-
duck session or when the new Congress convenes
in January.”

“Brace yourself for one of the most aggressive
corporate lobbying campaigns of all time,” Sarah
Anderson and Scott Klinger wrote on AlterNet.org
October 26. “And one of the most hypocritical.”

On October 4, Financial Times economic writer,
Gillian Tett, wrote that sometime last year she heard
Erskine Bowles, “the wisecracking Democrat who
has campaigned for bipartisan fiscal reform, throw
down a gauntlet to American business.” Speaking to
an audience of corporate executives, at Harvard
Business School, she wrote, he had “begged them to
support his efforts to forge a practical deal – and
argued that this corporate voice was crucial to
breaking Washington gridlock.” Tett rued the fact
that, as she put it, “the appeal fell on deaf ears;
chief executives have been missing in action (MIA) –
or missing from the political fiscal action – in the
past year.”

“But could this finally be about to change?” wrote
Tett because “a quiet new initiative has recently got
under way to co-opt those MIA corporate leaders
into the fiscal fight.”

“Most notably, under the framework of a group
known as The Committee for a Responsible Federal
Budget – led by people such as Maya MacGuineas
with the spiritual leadership of Mr. Bowles and Alan
Simpson – Washington and Wall Street players are
trying to persuade those CEOs to support a
campaign for bipartisan action,” wrote Tett. “So far,
about 100 CEOs have signed up, including Jamie
Dimon (of JPMorgan), Lloyd Blankfein (of Goldman
Sachs), Jeff Immelt (of General Electric), and Mr.
Cote himself.”

“The group has raised more than $30m, and expects
to raise more, to fund lobbying and public debate,
via conferences, advertisements and social media
(Mr. Bowles, as it happens, is on the Facebook
board.),” reported Tett. (The mogul list also includes
Steve Ballmer of Microsoft).

According to Tett, between now and the end of the
year, this big business will advocate a “preliminary
deal” to get past the so-called “fiscal cliff”, and then,
in the first six months of next year, they will launch
“a serious drive to hammer out a grandiose fiscal
plan.” By this time, she suggests, it will be easier to
strike a bargain since none of the bargainers will be
up for re-election.

This big business super lobby is proceeding under
the slogan “Fix the Debt”.

“This is yet another project supported by Wall Street
investment banker Peter Peterson,” wrote economist
Dean Baker. “For the last two decades Peterson has
used his fortune to bankroll a number of
organizations that were ostensibly pushing fiscal
responsibility, but always had the same punch line:
cut Social Security and Medicare.”

If anything, the economy needs more public
spending to get us out of a deep slump “The irony is
that CEOs in the coalition’s leadership have been
major contributors to the national debt they now
claim to know how to fix,” wrote Anderson and
Klinger. “These are guys who’ve mastered every tax-
dodging trick in the book. And now that they’ve
boosted their corporate profits by draining the
public treasury, how do they propose we put our
fiscal house back in order? By squeezing programs
for the poor and elderly, including Social Security,
Medicare, and Medicaid.”

“There really is no shame,” commented Bernie
Sanders (Ind- Vt). “The Wall Street leaders whose
recklessness and illegal behavior caused this
terrible recession are now lecturing the American
people on the need for courage to deal with the
nation’s finances and deficit crisis. Before telling us
why we should cut Social Security, Medicare and
other vitally important programs, these CEOs might
want to take a hard look at their responsibility for
causing the deficit and this terrible recession.”

“Our Wall Street friends might also want to show
some courage of their own by suggesting that the
wealthiest people in this country, like them, start
paying their fair share of taxes” continued Sanders.
“They might work to end the outrageous corporate
loopholes, tax havens and outsourcing provisions
that their lobbyists have littered throughout the tax
code – contributing greatly to our deficit.”

A clear indication that the big business operatives
have been gearing up for a big campaign was the
appearance on the day before the election of a full-
page advertisement in the New York Times titled,
“The Fiscal Cliff and America’s Future.” It was paid
for by 11 firms and funds, including the online
stockbroker TD Ameritrade, the investment firm
Morningstar, the multinational investment
management corporation, BlackRock and AK Steel.
The ad called for a “bipartisan response” to what it
referred to as a pressing need “to steer our nation
away from this rapidly approaching fiscal cliff and
towards a credible, sustainable deficit reduction

The big business ad repeats the canard that
businesses are holding off from investing the funds
they have on hand because of the “uncertainty”
about the economic future.

“The Fix the Debt campaign, much like the Bowles-
Simpson Commission and the propaganda of the
Peterson Foundation generally, contends that the
projected national debt is depressing business
willingness to invest now” wrote American Prospect
co-editor Robert Kuttner October 30. “Presumably,
businesses are worried about inflation and
uncertainty. But the government can fund ten-year
bonds at less than 2 percent interest and thirty-year
bonds at less than 3 percent. So investors don’t
seem worried about inflation. It’s not lack of
confidence in deficit reduction that’s depressing
business investment but lack of confidence in
consumer purchasing power.”

“If anything, the economy needs more public
spending to get us out of a deep slump brought to
you by the very people behind this campaign,”
continued Kuttner. “Cutting the deficit prematurely
will only depress purchasing power and deepen the
slump. That’s the real lesson of Greece, Spain,
Portugal, et al.”

It is important to recognize what the so-called fiscal
cliff is all about. The Republicans “want something”
says economist Paul Krugman, and it is “making all
the Bush tax cuts permanent” and, not having the
necessary votes in Congress, they are “holding
America hostage, saying – more or less explicitly –
that if they can’t have what they want but can’t
pass, they’ll tank the whole economy.”

According to former Treasury Secretary and White
House economic adviser, Lawrence Summers,
President Obama “has embraced the principles,
though not all the details, embodied in the
Simpson-Bowles commission report on budget
deficits” and “Like the group of chief executives who
made a major statement on deficit reduction last
week he insists that achieving sustainable finances
means both containing spending especially on
entitlements and raising revenue” and “he has made
clear that in talks with willing partners to conclude
a deal, he is prepared to go beyond his budget
proposals to ensure that debt accumulation is

Repeatedly during the Presidential campaign,
Republican Mitt Romney was sharply and correctly
criticized for advocating a step reduction in taxes
while refusing to specify which current deductions
he would alter to achieve his goal. He steadfastly
refused to say when asked. A similar demand
should have been made to Obama; which of the
“details” of the scheme advanced by Simpson and
Bowles does he have reservations about? Nobody
asked and he never said.

Last week, Kuttner, wrote “. on Wednesday
morning, a struggle begins within the Democratic
Party to save him (and us) from himself – to keep
him from agreeing to a budget deal that will only
slow growth, needlessly sacrifice Social Security and
Medicare, and make the next four years much like
the last four years.”

“What a waste, what a pity,” concluded Kuttner.
“Progressive Democrats should be resisting the
economic lunacy and political sway of an extremist
Republican Party. Instead, they will be working to
keep their own president from capitulating to fiscal


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