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Monday, January 03, 2011

Peterson Rewind

by digby

Kevin Drum responds to my post this morning about "the good liberal" and says that he believes they probably can take social security off the table with a few tweaks.

Benefit cuts are unpopular, after all, and conservatives by themselves don't have either the desire or the ability to buck the public on this unless they also have the support of the Washington Post/Pete Peterson Beltway elite. And they won't have that once the program is officially solvent. A deal on Social Security kicks the legs out of the centrist support they need in order to have any chance of reducing benefits in the future.

Here's Peter Peterson in 2000, when the budget was in surplus:

PAUL SOLMAN: Solow got a Nobel Prize for a model of economic growth like this, driven by investment. And most economists agree with him -- that we ought to be paying down the debt over time. But some traditional Republicans go a lot further. Longtime deficit hawk Pete Peterson, President Nixon's Secretary of Commerce, says we should use all the surplus now to pay off our debts because our children and grandchildren will be taking on so much debt for our Social Security and Medicare in the future.

PETE PETERSON: Anybody that thinks about this problem has to know that when the boomers start retiring and these deficits, you know, go six, seven, eight hundred billion dollars a year, who's ever running the country at that time is going to have several choices: they can cut the benefits, they can increase taxes, or they can try to borrow huge, unprecedented amounts of money.

PAUL SOLMAN: Peterson and others have been making this case since the early days of big budget deficits -- when this TV ad first ran in 1985.

AD ANNOUNCER: You owe the United States government, in round numbers, $50,000.


PAUL SOLMAN: We may be generating surpluses at the moment, says Peterson, but they're a drop in the bucket.

PETE PETERSON: I have computed in today's inflation-adjusted dollars how much the deficits in cash are going to be over the next 75 years. It's a stunning number, just for Social Security. It's 21 trillion dollars.

PAUL SOLMAN: Twenty-one trillion in --

PETE PETERSON: Trillion dollars in cash deficits.

GOVERNOR GEORGE BUSH: What I want to do is take two trillion, half of the four trillion and save it for Social Security.

PETE PETERSON: People talk about how they're gonna to put a couple of trillion dollars away, you know, in a lockbox and even throw in interest, you know, on that money.

VICE PRESIDENT GORE: I'll secure the future of Social Security and Medicare by putting them in an ironclad lockbox with a sign that says "Politicians, Hands Off."

PETE PETERSON: I wish them well but I don't think there's ever been a lockbox that can't be picked by co-conspirators in the White House and Congress to spend it.

It could have been off the table then and Peterson didn't advocate for it. Instead he kept up his incoherent fearmongering and suggested that the surplus be used to "pay down the debt" instead of shore up the social security program, because the some future politician could spend the money. And we all know what happened then.

He also staged an earlier crusade just a couple of years after the 1983 Greenspan commission which did exactly what everyone says needs to be done again --- raise the retirement age (I don't qualify until I'm nearly 67 and I'm old) and force average workers to pay in more in anticipation of future shortfalls. He went on to spend the 90s shrieking about entitlements and the deficit, barely pausing for breath when the budget went into surplus -- and then forgot to speak up when George W. Bush passed massive tax cuts for the wealthy.

Pete Peterson is not a "centrist." He's not a liberal either, although he's pretended to be both over the years depending on which constituency he was trying to con at the time. He has one mission and one mission only: to end "entitlements." There is no deal, short of that, that will satisfy him and as long as the beltway considers him and his ilk to be nice, centrist deficit hawks instead of the wrecking crew they are, they will be right there with him until he (or whoever follows him) gets the job done.

I suppose it's possible to imagine a "deal" which would modestly raise taxes on non-wealthy individuals in exchange for benefits cuts (which doesn't sound like much of a deal to me.) But if it happens I can guarantee that Pete Peterson and the boys will be back in business the next day. They have been doing this for 30 years and they aren't going to stop until they get what they want. After all, actuarial balance doesn't mean anything to people who don't believe that social security is separately funded in the first place.

Here's old Pete in 1994:
"We will no longer be able to afford a system that equates the last third or more of one's adult life with a publicly subsidized vacation."

I think that most accurately reflects his real concern.