Pete Peterson, the hedge fund billionaire who made his money by not paying his fair share of taxes, has pursued a decades-long quest to destroy Social Security and has pledged $1 billion to achieve that goal. So when President Obama announced he would convene his first “fiscal responsibility” summit on February 23, it didn’t bode well that Peterson was to be the keynote speaker.
Peterson’s keynote spot was the worst kept secret in town; I knew about it because I had been on a conference call with about 40 representatives of various DC interest groups, many of whom had received written notice from the White House that Peterson was scheduled to headline the event. But nobody wanted to go on the record for fear of jeopardizing their relationship with the administration in its early days.
So, FDL was the only media outlet that reported on Peterson’s close connection to a President who said that overhauling Social Security would be “a central part” of his administration’s efforts to contain federal spending.
Three things happened as a result of the uproar that ensued over that headline:
1) Peterson was “disinvited” from the summit. Both he and the White House denied everything, but Robert Kuttner subsequently confirmed in the Washington Post that Peterson had, in fact, been scheduled as the keynote speaker that day.
2) The administration backed off its immediate plans for reforming Social Security. The New York Times reported that they were “running into opposition from his party’s left” who are “vehement in opposing any reductions in scheduled benefits for future retirees.” But the lull was only temporary. NYT columnist David Brooks reported that shortly after the summit, “four senior members of the administration” called him to say that Obama “is extremely committed to entitlement reform and is plotting politically feasible ways to reduce Social Security.”
3) The White House began telling journalists off the record that they were interested in “establishing an independent commission (outside the congressional committee structure) to look at creating a specific reform plan.” As a way to underscore the absurdity of a Wall Street billionaire like Pete Peterson dictating that the federal government should tighten its belt by plunging old people into poverty, it henceforth became known as “the catfood commission.”
The fact that this whole thing transpired without notice by the establishment media only goes to show how poorly they have covered the war that is currently being waged against Social Security.
In January of 2010, a bill sponsored by committed Social Security slashers Judd Gregg and Kent Conrad which would have created an official Catfood Commission to make recommendations about the nation’s deficit was defeated by the Senate on a bipartisan vote — 22 Democrats and 24 Republicans voted no.
Undeterred, on February 18, President Obama issued an executive order creating a Catfood Commission anyway.
Unlike Bill Clinton’s Danforth Commission, which ended in deadlock, Obama set this commission up in such a way that it was stacked with deficit hawks who largely agreed on what needed to be done: 12 of the 18 members were to be appointed by Senate and House leaders in each party, and 6 would be appointed by the President. This virtually guaranteed that Social Security privatization fetishist Paul Ryan would be on the commission, as would Gregg and Conrad.
Among the President’s six appointments:
- Chairman Erskine Bowles, described by Business Week as “corporate America’s friend in the White House.” Bowles had negotiated the deal between Newt Gingrich and Bill Clinton to create “private social security accounts” where “taxpayers get some choice as to how to invest their contributions.” The deal fell through when the Monica Lewinsky episode jumped into the headlines.
- As Bowles’ Republican Co-Chair, the President appointed loose cannon Alan Simpson, the former rich kid GOP Senator from Wyoming once famously said that those who were complaining that Social Security needed protection were “people who live in gated communities and drive their Lexus to the Perkins restaurant to get the AARP discount.”
- Alice Rivlin was appointed by Obama to be chief wonk of the Catfood Commission, a Brookings Institute fellow who had been funded by Pete Peterson and a strong supporter of raising the retirement age to 70 — resulting in a 20% benefit cut to Social Security recipients.
- David M. Cote, the Republican CEO of defense contractor Honeywell
The composition of the Commission was conveniently stacked with 14 of the 18 members committed deficit hawks looking to start balancing the federal budget on the backs of old people. It takes 14 votes to pass any recommendations.
And who is supplying staff to the commission? Why, Pete Peterson.
Moreover, it was extremely disconcerting when it was announced that with the exception of a few public dog and pony shows, the Commission would conduct its deliberations in secret.
Nancy Altman and Eric Kingson, who had served as Obama’s Social Security advisors on both the campaign and his transition team, sounded the alarm in a piece that appeared in Harvard’s Nieman Watchdog entitled Has Obama created a Social Security ‘death panel’?:
President Obama and the leadership in Congress have delegated enormous, unaccountable authority to 18 unrepresentative, inordinately wealthy individuals. The 18 individuals are meeting regularly, in secret, behind closed doors, until safely beyond this year’s mid-term election. If they reach agreement, their proposal will be voted on in December by a lame duck Congress, without the benefit of open hearings and deliberations in the pertinent committees and without the opportunity for open debate and amendment on the floors of the House and Senate. Despite the speed and lack of accountability, the legislation will affect, in substantial ways, every man, woman, and child in this nation.
Still, nobody in the media was covering these closed-door deliberations. Alex Lawson of Social Security Works, the organization run by Altman and Kingson, had been blogging about the Catfood Commission on FDL under the name “dcfightsback.” So we decided that every time the Catfood commission met, FDL would run a live stream of Alex’s iPhone camera pointed at the committee room’s closed door.
I admit now that there was some complaining from the FDL ranks about the wisdom of devoting 45 or more minutes of primetime front page space to a video of a closed door. I guess it was the performance art aspect of it that appealed to me, sort of a political version of Andy Warhol’s “Sleep,” but in spite of the grumbling everyone worked hard to make the technology run smoothly. We carried the video on front page of FDL week after week, traffic-killer though it was, just to make a statement.
We never thought any moments of high drama would come from a camera pointed at a closed door. Boy were we wrong.
On June 16, our Managing Editor Gregg Levine pinged me: “Are you watching Alex’s stream right now? Alan Simpson is going off.”
It was amazing. In real time, live streaming on the front page of FDL, Alex got Alan Simpson to talk to him. The remarkable thing was not so much that Simpson was going off, but that he had just come from the closed door meeting and was clearly saying what everyone in the room was thinking but wouldn’t say publicly.
Alex was as polite and knowledgeable as Simpson was rude and ignorant. Simpson said that the commission was “really working on solvency… the key is solvency.” He went on:
We’re trying to take care of the lesser people in society and do that in a way without getting into all the flash words you love dig up, like cutting Social Security, which is bullshit. We’re not cutting anything, we’re trying to make it solvent.
We thought this was one of the first real glimpses anybody had into what the Catfood commission was truly trying to do. We wanted to get this video out there as soon as possible, but because Alex’s camera was an iphone and its recording/streaming capabilities were remedial, it was over 24 hours before our tech experts could manually sync the entire clip and put it on Youtube.
During that 24 hours, there was not one media report of what had happened right outside the meeting room where very important deliberations about the US deficit were taking place. There was a good reason for that: the only person who was there was Alex Lawson.
When we finally released the video and a transcript of the Simpson encounter, a national uproar ensued. A blogger with an iPhone had taken the time to have a conversation with the Commission’s co-chair at a regular meeting that not one single journalist had bothered to cover. Many people who had been in denial about what the Commission truly intended to do suddenly woke up.
Simpson’s words were particularly alarming to economist James Galbraith, who testified before the commission shortly thereafter and said that Simpson was not qualified to be its co-chair:
Senator Simpson has plainly shown that he lacks the temperament to do a fair and impartial job on this commission. This is very clear from the abusive response he made recently to Alex Lawson of Social Security Works, who was asking important questions about the substance of the commission’s work, as well as calling attention to the illegitimate secrecy under which you are operating.
Galbraith told them to their faces, in no uncertain terms, that having viewed the Simpson video, the Commission’s pursuit of “solvency” was not legitimate:
I note from Chairman Simpson’s conversation with Alex Lawson that the Commission has taken up the questions of the alleged “insolvency” of the Social Security system and of Medicare. If true, this is far outside any mandate of the Commission. Your mandate is strictly limited to matters relating to the deficit, debt-to-GDP ratio and fiscal stability of the U.S. Government as a whole.
You are plainly not equipped by disposition or resources to take on the true cause of deficits now and in the future: the financial crisis. Recommendations based on CBO’s unrealistic budget and economic outlooks are destined to collapse in failure. Specifically, if cuts are proposed and enacted in Social Security and Medicare, they will hurt millions, weaken the economy, and the deficits will not decline. It’s a lose-lose proposition, with no gainers except a few predatory funds, insurance companies and such who would profit, for some time, from a chaotic private marketplace.
In spite of this, Simpson remained co-chair of the commission.
Concerns about the commission’s plans — and its legitimacy — have come from both sides of the aisle. Both Newt Gingrich and John Boehner have echoed the concerns of John Conyers that the commission plans to release its recommendations on December 1, and that it could be up to a lame duck Congress to vote on them. That means many members with no fear of electoral repercussions could be voting not only on cuts to Social Security benefits, but a new national VAT tax as well.
Until this week, possibly the biggest outrage coming out of the commission was the moment when defense contractor David M. Cote reportedly called for “freezing military pay, making military people pay for their health care” to avoid cuts in defense spending – an idea with which Alan Simpson apparently agreed.
There’s something exceptionally disturbing about the head of a company that profited from the raid on the Social Security trust fund in the wake of 9/11 being on a “deficit commission” in the first place. But the optics of a defense contractor deciding the future of Social Security are horrific. The CEO of Honeywell gets to cast a vote that will plunge 1.5 million senior citizens into poverty if the retirement age is raised to 70? Really?
This week, Alan Simpson topped even that. On Tuesday, FDL was the first to publish the entire letter written by Simpson to Ashley Carson, head of the Older Women’s League, to the effect that Social Security is “like a milk cow with 310 million tits!” He concludes his patronizing, sexist and ageist outburst by telling the committed activist to “Call when you get honest work!”
The Older Women’s League, NOW, the National Council of Women’s Organizations and Social Security Works subsequently called for Simpson to be fired from the commission. Bernie Sanders and Peter DeFazio also called for Simpson’s replacement. Simpson subsequently apologized, but Carson, NOW and other groups say it is not enough.
The White House, however, apparently took the liberty of accepting Simpson’s apology on their behalf, and says he will continue to serve.
As Richard Eskow notes, here’s what the President said when he appointed Simpson and his co-chair: “I know they’ll take up their work with the sense of integrity and strength of commitment that America’s people deserve and America’s future demands.”
But that hasn’t happened. As Paul Krugman notes, “a declared willingness to cut Social Security has long served as a badge of fiscal seriousness” among Washington insiders, and Obama has accepted that premise. Simpson’s childish outbursts, his clear contempt for those he patronizes as “the lesser people” he says he is trying to protect, and his ignorance about the program he is tasked with “fixing” are clear indications the commission is neither fiscally serious nor responsible.
The Catfood commission is not legitimate. It was stacked with people who knew their job was to fulfill Pete Peterson’s dream of rolling back the New Deal and waging war on the social safety net. It is a committee of oligarchs designed to circumvent electoral repercussions for those who oppose the will of the vast majority of the American people, both Republicans and Democrats, who don’t want to see the federal budget balanced on the backs of the nation’s senior citizens.
President Obama, it is not just Alan Simpson who needs to go. It’s time to shut down the entire commission.