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Fiscal Commission Has the Knives Out for Safety Net Spending

I think I’ve been subtly ignoring the first meeting of the Bowles-Simpson deficit commission and the Pete Peterson “fiscal responsibility summit” in the hopes that it would somehow go away. Clearly, that’s not happening. In fact, Peterson, the super-rich hedge fund manager who has a special welfare deal to pay his income taxes at a drastically lower rate than workers in the rest of the country, appears to have succeeded in ginning up a fake crisis timed with the entry of a Democratic President.

The President’s remarks at the Fiscal Commission’s first meeting certainly show that he’s bought into the conceit that the deficit is spiraling out of control and we have to do something, right now, to arrest. This conversation is taking place amidst 9.7% unemployment, a growth rate far too modest to cut into that jobless rate, and really no alternative but government spending and, yes, larger deficits in the near-term, to deal with the overriding issue. But throughout both the Fiscal Commission meeting and the Peterson summit, only one person, EPI’s Larry Mishel, made this point.

By contrast, the President demanded that “everything has to be on the table” for the Fiscal Commission, including his just-completed health care plan. This is always framed in the context of “tough choices” so the macho men can puff themselves up about what bold leaders they are. It actually doesn’t take much bravery to pull meager safety net benefits from the voiceless – and doing it in near-total secrecy, to boot. The Fiscal Commission doesn’t have to hold their meetings in public. They don’t have to make their minutes publicly available. They can merely go behind the door of a meeting room and plot. That’s not leadership.

Now the commission needs 14 votes out of its 18 members to create any recommendations for Congress to tackle with a vote. Given that 10 members were chosen by Democrats, with three each by Nancy Pelosi and Harry Reid, that should be an obstacle which would protect the safety net. But that’s not the case.

Co-chair Erskine Bowles is on the record that the commission will “mess with Medicare, Medicaid and Social Security, because if you take those off the table, you can’t get there.” Ann Fudge sits on a bunch of corporate boards and doesn’t have a clear position at this point. Alice Rivlin has been dying to get her hands on Social Security. Even Andy Stern said recently that entitlement programs “need to be re-examined”. These are the four Democrats the President placed on the panel. The three Senators appointed include Kent Conrad, who just passed a horrific austerity budget through his Budget Committee; Max Baucus; and Dick Durbin, who just said this:

But Senator Richard J. Durbin of Illinois, the second-ranking Senate Democratic leader, denounced suggestions of an administration VAT plan as the “musings of right-wing cable shows.”

He also admonished “bleeding heart liberals” to be open to program reductions to restore fiscal balance. An hour after the commission’s meeting, however, several liberal activists held a conference call with reporters to press for additional spending to create jobs, lower military spending, higher taxes for the wealthy and no cuts in Medicare or Social Security.

Pelosi’s picks include Xavier Becerra and Jan Schakowsky, who laid down her own marker on safety net benefits in a smart way, saying that “tax entitlements” – tax breaks for the wealthy – must be on the table as well. John Spratt, the more moderate chair of the House Budget Committee, has been a stalwart for entitlement programs as well. But as you can see, the Pelosi block is simply too small to stave off those kinds of cuts.

And the right-wing of this commission will simply stay united against any tax hikes. While Paul Ryan made some noise about “waste” in defense spending, it’s highly unlikely they would agree to cuts to military programs, either. Kent Conrad’s Budget Committee just cut foreign aid while increasing military spending, for example.

There are pathways to a greater fiscal responsibility in the long-term that have nothing to do with destroying the already meager benefit package for all Americans. You “fix” Social Security, which is not in crisis, by removing the contribution limit, period. You can fix health care cost growth with the kinds of choices that were jettisoned in last year’s debate (even a few of the ideas that got through will help). You can move America back toward the marginal tax brackets that created prosperity in the 1950s and 1960s. You can stop policing the entire world and being the military backstop everywhere. You can end the ridiculous amounts of corporate welfare in America and tell corporations that the cost of doing business here is paying your fair share. The ideas are out there but they don’t fit with the consensus inside the Beltway, that everyone in the country must “sacrifice” for the greater good. Everybody but those who live inside the Beltway, that is.

The Fiscal Commission is one long scare session designed to force right-wing solutions on the country that would dramatically increase inequality.

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David Dayen

David Dayen

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