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Pete Peterson’s Long Game Culminates with Month-Long Austerity Push

Wall Street billionaire Pete Peterson is making his move. Today in front of a Washington-centric audience at the Newseum, and flanked by deficit peacocks Kent Conrad and Evan Bayh, he launched OweNo (my sentiments exactly), a $20 million dollar ad campaign designed to “start a discussion” about deficit reduction, and by “start a discussion” I mean “cut your retirement savings and your health care.” Sam Stein reports:

Titled “OweNo”, the campaign, which promotes a mock presidential candidate irreverently named Hugh Jidette (get it? Huge debt), doesn’t take on Social Security reform directly. But the connections are fairly obvious and it has the program’s defenders deeply wary about being outgunned. The Peterson Foundation, for one, has never shied away from its push to reform the entitlement program. And in introducing the $20 million effort, the organization’s founder, former Nixon commerce secretary and fiscal conservative Pete Peterson made it abundantly clear that Social Security is in his sights.

“Solving our fiscal issues without fundamental entitlement reform is a statistical impossibility,” he said. “Entitlement reform must provide benefits for the most vulnerable. But if we wait too long to reform and we confront a crisis, the politics may become brutal and even violent and in such a situation there would be no assurance that the safety net, even for the most vulnerable, might not be seriously frayed.”

This begins a Sherman’s march for the deficit hysterics, a series of reports and fearmongering culminating in the release of the cat food commission report on December 1. Before that time, several reports calling for austerity will land, including the Pew-Peterson Commission report (funded by Pete Peterson), a report from Robert Greenstein and Charles Blahous saying that Congress should address Social Security changes “sooner rather than later” (The report is funded by Pew and Peterson), and the Bipartisan Policy Center Debt Reduction Task Force report from Alice Rivlin and Pete Domenici (Rivlin sits on the Pew-Peterson Commission and is therefore funded by Peterson as well).

Rivlin is also part of the cat food commission, and she’ll probably lead the charge for any benefit cuts to social spending and in particular Social Security, joining Presidential appointees like co-chairs Erskine Bowles and Alan Simpson, Ann Fudge and David Cote. And Conrad, also a member of the commission, is genuflecting before Peterson at the Newseum event:

“People on the left who don’t want to touch entitlements, that is just unrealistic,” said Conrad. “I would say to my friends on the left it is unrealistic, Medicare and Social Security are headed for insolvency. The idea that nothing has to be done is divorced from reality. On the right, those who say no new revenue, I believe, are also in denial.”

The Rivlin/Domenici report is likely to be even more aggressive at slashing entitlements, to draw fire away from the cat food commission report, and also to make that the sensible moderate alternative. Practically all of the solutions will fall on the spending side, and we can expect the same from the cat food commission, perhaps with a modest benefit for low-income seniors that costs little, helps a few, and can be used to buy support. Seniors over 55 will be largely (but not entirely) exempted, in an effort to play more conservative older voters against their children and grandchildren. All of this will be done in private; the cat food commission’s next public meeting will be the one where they deliver the recommendations.

Basically all of official Washington can be expected to get behind this over the next month, and explain to the masses that they intend to make them sacrifice for a “better America.”

Other countries who have tried to pull off austerity in the middle of a jobs crisis and an economy recovering from recession have utterly failed. Pete Peterson has been working for decades to send America into that same ditch. This is the month he feels he can succeed.

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David Dayen

David Dayen