“Who’s Behind “Fix The Debt”?: Just Another Corporate Fraud Using A Collection Of Former Congress Members
Look out… the “fixers” are coming.
Top corporate chieftains and Wall Street gamblers want to tell Washington how to fix our national debt, so they’ve created a front group called “Fix the Debt” to push their agenda. Unfortunately, they’re using “fix” in the same way your veterinarian uses it — their core demand is for Washington to spay Social Security, castrate Medicare and geld Medicaid.
Who’s behind this piece of crude surgery on the retirement and health programs that most Americans count on? Pete Peterson, for one. For years, this Wall Street billionaire, who amassed his fortune as honcho of a private equity outfit named Blackstone, has run a political sideshow demanding that the federal budget be balanced on the backs of the middle class and the poor. Fix the Debt is just his latest war whoop, organized by a corporate “think tank” he funds.
This time, Peterson rallied some 95 CEOs to his plutocratic crusade, including the likes of General Electric boss Jeffrey Immelt and Honeywell chief David Cote. (Note: Both Immelt and Cote, while cheering for cuts to programs that we working Americans pay into, are themselves taking money hand over fist from taxpayers in terms of military contracts and corporate subsidies for their corporations. But they aren’t concerned about defense spending and ending subsidies that benefit their bottom line.)
All of them are not merely “One Percenters,” but the top one-tenth of One Percenters. Of course, a group of pampered, narcissistic billionaires would not make a credible sales argument for this dirty work. Having elites piously preach austerity to the masses would be as ineffective as having Col. Sanders invite a flock of chickens to Sunday dinner.
Presented with this image problem, Fix the Debt needed to give their campaign a more benign image, and Peterson and Co. followed a tried-and-true formula of political deceit. As described by Mary Bottari of the Center for Media and Democracy, the trick is to “gather a bipartisan group of ‘serious’ men, hire a PR firm to place them on TV shows, blanket the media with talk of a looming crisis and pretend to have grassroots support.”
In this case, a collection of former member of Congress, each of whom had a reputation for being moderate to the extreme, were recruited to give the campaign a sheen of high public purpose. Backed by a $40 million budget put up by the corporate interests, these “elder statesmen” are now the face of Fix the Debt, doing dozens of TV interviews, hosting breakfast sessions with members of Congress, making speeches about “mutual sacrifice” and generally going all-out to sell the financial elite’s snake oil.
But wait — being an elder does not automatically mean you’re a statesman. Let’s peek at the résumés of these so-called public-spirited fixers of the debt. Start with Jim McCrery, a former GOP lawmaker from Louisiana. While urging Congress to cut people’s programs, he’s also a top-paid lobbyist pushing Congress to give more tax subsidies to America’s richest people and to such multinational corporations as General Electric.
Former Democratic senator Sam Nunn is a fixer, too — but he’s also paid $300,000 a year to be on the board of directors for General Electric. Likewise, Democrat Erskine Bowles, a co-founder of the fixers’ front group, is on the board of Morgan Stanley, drawing $345,000 a year. And former GOP senator Judd Gregg takes about a million bucks a year as advisor to and board member for such giants as Goldman Sachs and Honeywell.
Fix the Debt is nothing but another corporate fraud. I wouldn’t let this gang of fixers touch my dog, much less my Social Security!
By: Jim Hightower, The National Memo, January 16, 2013
“Defense Hawks Swoop”: House Republicans Pushing Back Strongly Against John Boehner On Defense Cuts
John Boehner should probably stop doing interviews.
His reported talk with the Wall Street Journal‘s Stephen Moore that was published Monday under the provocative title “The Education of John Boehner” (an illusion, I am confident, to William Greider’s famous “The Education of David Stockman” piece in late 1981 that nearly got Stockman fired as Reagan’s budget director) is continuing to cause him problems. Intended, presumably, to convey a sadder-but-wiser-and-tougher sense of his negotiating posture on fiscal issues after the “fiscal cliff” deal, the story got lots of attention for Boehner’s assertion that “the tax issue is resolved,” and some for his depiction of the stark differences between himself and the president on every basic fiscal and economic issue.
But the part of the story that’s biting him in the butt right now involves the spending sequestration that was recently delayed for two months, and that had been widely considered a leverage point for the White House with Republicans, given their frantic desire to spare the Pentagon any cuts. The Hill‘s Russell Berman and Jeremy Herb explain:
In his interview with The Wall Street Journal, Boehner said that during the late stages of the fiscal-cliff negotiations, it was the White House — and not Republican leaders — that demanded a delay in the $109 billion in scheduled 2013 cuts evenly split between defense and domestic discretionary programs. Senate Republican Leader Mitch McConnell (Ky.) and Vice President Biden ultimately agreed to push the sequester back by two months, partially offsetting it with other spending cuts and leaving $85 billion in remaining 2013 cuts in place.
The Speaker suggested the sequester was a stronger leverage point for Republicans than the upcoming deadline to raise the debt ceiling, for which he is insisting on spending cuts and reforms that exceed the amount in new borrowing authority for the Treasury. Therefore, the willingness of Republicans to allow the sequester to take effect is “as much leverage as we’re going to get,” Boehner told the Journal.
Negotiating 101 tells you that you don’t make that kind of assertion unless you’ve got your ducks in a row and know you won’t be undercut by the people you claim to be speaking for. It seems Boehner did not do any of those things:
House Republican defense hawks are pushing back strongly against Speaker John Boehner’s (R-Ohio) claim that he has GOP support to allow steep automatic budget cuts to take effect if President Obama does not agree to replace them with other reductions….
Not so fast, two defense-minded House Republicans told The Hill.
“I don’t support that,” said Rep. Duncan Hunter (R-Calif.), a member of the Armed Services Committee whose district includes one of the nation’s largest military installations. “You get into dangerous territory when you talk about using national security as a bargaining chip with the president…”
One defense-minded Republican lawmaker said Boehner’s position would amount to a broken promise to his conference.
“In order to get the Republican Conference to pass the debt-limit increase last time, he promised them sequestration would not go in place,” the Republican House member said, speaking on the condition of anonymity. “To be using sequestration and these defense cuts in the next debt-limit talks certainly is pretty bad déjà vu for the Republican Conference.”
So all Boehner really accomplished in his boast to Stephen Moore was supplying further evidence that he had it backwards: Obama has the leverage on the defense sequester, and Boehner is just blustering.
You know, there’s a natural tendency to think that people who have risen to the top of any profession are reasonably bright, and are advised by dazzlingly bright folk who truly earn their bloated salaries as strategic wizards. Time and again, that turns out not to be so true.
BY: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, January 10, 2013
“Ideology Displacing Facts”: Simpson-Bowles “Spending Problem” Voodoo Economics Ignores The Lack Of “Crowding Out”
Alan Simpson and Erskine Bowles – co-founders of the corporate lobby Campaign to Fix the Debt – were on Meet the Press this morning. I couldn’t drag myself to watch it because I am sick and tired of hearing every oligarch’s favorite lackeys argue that the national debt is a reason to gut the welfare state. Which is exactly what they were doing this morning:
“Yes, the president has taken some steps forward on the entitlement programs, but has he done enough? Absolutely not,” Bowles said.
But they and their disciples couldn’t be more wrong. The U.S. government has no “spending problem” from a macroeconomist’s point of view. Of course, the country can’t indefinitely continue to borrow more than it earns, but the idea that we must somehow tackle debt by cutting spending — and do it right now — is voodoo economics of the highest order.
For spending to be an immediate problem, it would have to be problematic. And the primary reason that government spending is problematic is due to “the crowding out effect.”
I could find some haughty economist to quote on the issue, but for simplicity’s sake here’s Wikipedia:
“…crowding out is a phenomenon occurring when expansionary fiscal policy causes interest rates to rise, thereby reducing investment spending.”
Yet interest rates are rock bottom and aren’t expected to rise anytime soon, and demand for U.S. Treasury bonds remains high.
Thus, government spending appears to be having no averse effect on financial markets, which, according to Treasury yields, actually seem to think that lending the U.S. government money is a wise idea. The debt “crisis” is only caused by a “spending problem” when one considers government spending to be an issue from an ideological standpoint.
If Simpson and Bowles were serious about tackling the debt without completely undermining the economy, they’d advocate higher taxes on those that can afford to pay more. Corporations are awash with cash, and capital is taking a larger slice of the pie than ever. But aggregate demand is lagging, and to undermine social safety nets would further weaken it. Sound economic policy would, therefore, have the rich finance deficit reduction — if it must be done in this fragile economy.
By: Samuel Knight, Washington Monthly Political Animal, January 6, 2013
“Misleading The People”: The Deeper Problem With Media Acceptance Of Republican Irresponsibility
Alarms are going up all over the progressive commentariat about the early signs of Beltway complacency–particularly in the MSM–about Republicans threats to wreak holy havoc on the economy by taking the debt limit hostage to their spending demands (more for the Pentagon, less for everything else).
TNR’s Alec MacGillis, quoting WaPo’s Greg Sargent extensively, lays out the complaint most efficiently:
It is striking to what degree the Washington establishment has come to normalize Republican hostage-taking of the debt limit, to see it as a predictable and almost natural element of the political landscape. Greg Sargent argues convincingly why this is a problem, noting that the debt ceiling must be raised to pay for past spending, and should not be used as a chip in negotiating future budgets: “In the current context, conservatives and Republicans who hold out against a debt limit hike are, in practical terms, only threatening the full faith and credit of the United States — and threatening to damage the economy — in order to get what they want. Any accounts that don’t convey this with total clarity — and convey the sense that this is a normal negotiation — are essentially misleading people. It’s that simple.”
What bears stating even more strongly, though, is how far we’ve come from 2011, when the Washington establishment viewed the Republicans’ threat of credit default as the utterly brazen and unprecedented step that it was. Even those who supported the gambit recognized it as a newly deployed weapon.
I agree with all that, and with MacGillis’ assessment of early media coverage of the debt limit fight as just another episode of the usual partisan follies.
But there is a deeper problem that makes adequate media treatment of GOP posturing very difficult: an inability to grasp and explain the underlying radicalism of conservative doctrine on federal domestic spending. Exhibit One, of course, was the frequent refusal to understand the fundamental change in the role of the federal government that was the object of the Ryan Budget, particularly its first iteration. And rarely did major MSM writers and gabbers bother to suggest that immediate implementation of the Ryan Budget via the budget reconciliation process would have been the predictable result of an election where Romney won and Republicans won control of the Senate.
But Exhibit Two, and far more relevant today, is the baseline for conservative positioning on the debt limit, the Cut, Cap and Balance Pledge, signed by Mitt Romney himself in 2011 and championed by the powerful House Study Committee, to which 165 Republicans in the 112th Congress belonged (there’s no updated list for the 113d, but there’s no reason to think the RSC has lost its grip on the House GOP Caucus).
I’ve gone through this a number of times over the last two years, but will once again post the basics of the CCB proposal:
1. Cut – We must make discretionary and mandatory spending reductions that would cut the deficit in half next year.
2. Cap – We need statutory, enforceable caps to align federal spending with average revenues at 18% of Gross Domestic Product (GDP), with automatic spending reductions if the caps are breached.
3. Balance – We must send to the states a Balanced Budget Amendment (BBA) with strong protections against federal tax increases and a Spending Limitation Amendment (SLA) that aligns spending with average revenues as described above.
And the whole idea of this proposal (and the specific subject of the CCB Pledge) is to make any vote for a debt limit increase strictly contingent on all three planks of the proposal, which means a radical and permanent reduction in federal spending, far beyond anything contemplated in the Ryan Budget.
By: Ed Kilgore, Contributing Writer, Washington Monthly Political Animal, Jabuary 4, 2013
“Lessons Not Learned”: Republicans Who Put Principle Above Country
A lot of the time, politics is about picking the least worst option. Well, the “fiscal cliff” deal jointly crafted by Vice President Biden and Senate Minority Leader Mitch McConnell (R-Ky.) was the least worst option, and those who voted against it should not hide behind any phony commitment to principle. This deal or nothing were the two options left after weeks of failed negotiations. Nothing else was possible last night. And while nothing about the deal makes America stronger, the absence of an agreement would make us weaker.
The GOP needs to be the party of low taxes and smaller government. This deal produces the opposite of that. It does nothing to slow spending, reduce the debt or diminish dependency. All it did was avoid a financial shot to the head for millions of U.S. taxpayers.
Of course it is easy to oppose the deal when you don’t consider context, the alternatives and the consequences of doing nothing. It is convenient to believe that, if the GOP had let us go over the cliff, it would have been so bad for so many taxpayers and for the economy that the president and the Democrats in Congress would have agreed to a better deal, including spending reform. In other words, taxpayers were being held hostage and if we would have let them endure a little torture, we could have gotten Obama and the Democrats to cave in to our will.
What a bunch of baloney. The Republicans who voted “no” hid behind the courage of those who recognized that the McConnell-Biden deal was better — at this time — than the consequences of doing nothing.
Obviously, America’s future depends on our ability to rein in spending. Fights over our spending, including the debt-ceiling debate, will be critical. But no Republicans should boast of their opposition to the McConnell-Biden deal and consider themselves more philosophically pure or more courageous than their colleagues who had to vote for the bill. They are the opposite.I hope party leaders will band together and punish any Republican or Republican organization that tries to use this vote against those who voted for it. Nobody should be vulnerable in a future primary because they voted “yes” last night. If anything, the lesson learned for Republicans should be how hard it’s going to be to get our financial house in order and slow the quickening decline of America.
By: Ed Rogers, The Insiders, The Washington Post, January 2, 2012
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