Former Sen. Alan Simpson’s interview on Fox Sunday was a doozy. His usual outspoken, outrageous, colorful self shined through, perhaps as a prelude to the first meeting of the federal deficit reduction commission, which he leads (and about which my colleague Holly Yeager posted the other day). Simpson never makes boring copy, and so far he has been consistently quotable in his remarks. He and his co-chairman, Erskine Bowles, make quite a media pair.
But the press needs to pay attention to what they are saying, because their drive to cut the deficit will affect the financial well-being of every man, woman, and child in America. So far the direction of the media coverage has been driven by their mantra: everything is on the table; no more Mr. Nice Guy when it comes to Social Security and Medicare. The Erskine and Alan show is laying the groundwork for drastically changing Social Security and Medicare in ways that might not be so palatable with the public.
It didn’t take Simpson long to climb on his hobbyhorse—that whatever the commission recommends will not hurt older folks. “Erskine and I are in this one for our grandchildren,” he said. “Somebody said they’re stalking horses for taxes. I’m not a stalking horse for taxes. I’m a stalking horse for my grandchildren.” Simpson told Fox anchor Chris Wallace that whatever “adjustment” is ultimately made, and whatever has been suggested in the way of Social Security reform for the last ten years, “none of that affects anybody over 57.” He said most of his mail was coming from:
“These old cats 70 and 80 years old who are not affected in one whiff. People who live in gated communities and drive their Lexus to the Perkins restaurant to get the AARP discount. This is madness.”
Perhaps Simpson hasn’t looked hard enough in Cody, Wyoming, or in other places where the elderly, particularly women, exist on rather small Social Security incomes. The average monthly benefit for all workers is about $1,150. These people are paying more and more for their health care out of pocket and will continue to do so after reform takes effect. I have spent a lot of my career talking to seniors, and I haven’t seen many living in gated communities, driving fancy cars. Walk down the streets of Torrington, Wyoming, not too far from where the former senator lives, to see the kinds of small, cramped, drafty houses where many of the town’s elderly survive. Some barely have enough for food, let alone gas for the cranky old vehicles they drive.
Once Simpson made his point about the fat cat geezers, Wallace tried to engage about what exactly he had in mind for the under-57 crowd: “You are talking about raising the retirement age, are you talking about higher taxes?” A fair enough question, to which Simpson replied: “I don’t know.” He said there were think tanks all over the country that have talked about how to resolve the Social Security problem and mentioned the 1983 commission that put the program on a sound footing. That commission resolved the problem, he said, “because they had all the facts they needed. So do we.”
If Simpson has all the facts, we’d like to know exactly how many seniors drive Lexuses and live in gated communities. If he doesn’t have the numbers, reporters following this story should pin him down or find out for themselves what the data show before spreading his sound bites far and wide, the way journalists did when Ronald Reagan called black women welfare queens who drove big cars while collecting food stamps.
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CJR is one of my favorite information sources. That being said, I think Trudy took off on a tangent that wasn't in order. As quoted in the article, Mr. Simpson was saying that the old geezers in gated communities are the ones who have written to him. He made no statement, at least as reported in this article, about the vast majority of us seniors and our incomes or living conditions.
#1 Posted by sarah, CJR on Fri 30 Apr 2010 at 02:34 PM
They did the same thing to demonize financial aid and push heavy student loan burdens on non-affluent college students. The application for college financial aid is more rigorous than the application used for the TARP bailout.
I think people transfer their rational fears about retirement caused by lack/loss of traditional pension plans to their fearful misunderstanding about "the problem" with Social Security. In addition to enlightening me about the risks for widespread "under water" mortgages as a consequence of the housing bubble (I really thought he was kidding or that that would be so serious that it could not possibly happen), Dean Baker's explanations (plural because he has to repeat it so often) about the solvency of the Social Security trust fund made me realize there is a game out there to terrify people about retirement. We definitely have problems but that's because of the loss of good jobs with good pensions and an over-reliance on weak 401k products. I talk to my friends and family about this stuff and all are convinced that SS is tanking. I try to recite what I've learned from DB but no one believes there is not a critical looming disaster in the near future. And in general, people genuinely do not understand the financial instruments used to fund retirement, healthcare, student loans, credit cards, or mortgages.
Regarding SS, I believe a fly in the ointment is the SS surplus which was caused by raising the SS payroll tax (1980's?) to beef up the trust fund in preparation of the baby boom retirements. So if using that surplus to pay claims is now regarded as bad policy, than why did they over charge SS payroll dedux for all these years? It seems there should be refunds on the extra money taken from paychecks that was not used specifically to pay out SS benefits (?). I'm still learning about this so I'm not entirely sure how it all works. But my impression is that the SS trust fund was intended to support the baby boomers but the money has been diverted to other govt operations (true? not true? I'm still figuring this out). It is also my understanding that the trust fund should be as secure as any other Treasury bills/bonds. So (I think) an important issue might be did Americans overpay in SS taxes? Was it like a bait & switch to say the extra money was for SS but, surprise, it isn't? Still learning how it works. I'm also reading Barlett & Steele's books in their America What Happened series so I'm in mid-think right now about what ails our nation. Because we're experiencing long-term impacts from decisions made over decades, there is a lot of disconnect about what's really happening, when, how, and why. These issues are not mysterious to close observers who've been following it for a while and understand it (like William Greider, Kevin Phillips, or Barlett & Steele). But it's news to the rest of us. And. It's a lot to read.
#2 Posted by MB, CJR on Fri 30 Apr 2010 at 03:19 PM
One thing you have to emphasize in this story is the two Scaife figures who's people are pushing this narrative.
Number 1. Pete Bloody Peterson:
http://www.ourfuture.org/blog-entry/2010041624/week-obama-s-deficit-commission-or-pete-peterson-s
http://digbysblog.blogspot.com/2010/04/sacrificial-scams.html
"
This is the where the Village metaphor really hits home. Mrs Greenspan and the rest of the beltway insiders have all convinced themselves that their little village represents Real America. So when someone suggests that "entitlements" have to be cut for the common good, that seems like something that nobody should really squeal too much about since they don't know a single soul who will be even slightly inconvenienced by such a thing. SS is chump change to these people, not even really worth collecting (but just try to take it from them.)
Now, repealing their tax breaks --- that's the kind of sacrifice no self respecting Real American should ever stand for... These rich bastards are telling people who work hard their whole lives that they have to "sacrifice" their meager public pension to refill the treasury that these same rich bastards have looted --- and which they continue to refuse to help replenish, despite the fact they are still swallowing firehoses full of money. This, after the middle class in this country just suffered the biggest loss of wealth since the Great Depression as a result of these riverboat gamblers playing with the economy like it was their favorite Baccarat table in Monte Carlo. Chutzpah doesn't even begin to describe it. Sociopathy is more like it."
More to follow:
#3 Posted by Thimbles, CJR on Mon 3 May 2010 at 03:25 AM
And then there's "The Unregulated" Robert Rubin with his Hamilton Project
Here you find that the alumini have swelled the ranks of the Obama Administration:
http://seminal.firedoglake.com/diary/43083
And here you find what they've advocated for since at least 2006
http://www.guardian.co.uk/commentisfree/2006/sep/15/errinburraspeechillnever
"Deficit-fetishism also underscores and bolsters a longstanding insider campaign to cut and partially privatize the Social Security System. The Hamilton Project strategy document doesn't mention Social Security by name. But it is riddled with codewords about the "long-term entitlement problem" which, it avers, can only be solved by a "bipartisan commission" acting on well-known options, behind closed doors.
In fact, Social Security is our most successful social insurance program. It is in better financial shape than ever. No economic or budget imperative requires that it be cut, now or in the reasonably foreseeable future. There is no Social Security crisis, and no real "long-term problem" involving the program. Medicare and Medicaid are also not the worst parts of our health care system; the problem of health care insurance could best be dealt with by expanding, not cutting those programs. The Hamilton Project's promise to deal with these issues by "bi-partisan consensus" behind closed doors is a promise to exclude the voices of labour, the elderly, the poor, and loudmouths like me. I will resist. The correct policy toward Social Security is, and remains, what the late Robert Eisner always recommended: leave it alone."
As George Carlin says in the "Who Really Controls America" youtube (nsfw), "They are coming for your social security". Their goal now is the same goal they had under Bush, which was to set up retirement accounts that Wall Street bankers can skim off the top at a cost of 3 trillion added to the government debt.
This is called deficit reduction by the sociopaths who own this country. They are ready for war, they just had their chests topped up with taxpayer money during the bailouts.
And Obama is their man. He pushed their deficit commission so that we can get the same type of reform for entitlements that we got out of Baccus's "gang of six" on health care: progressive ideas pulled out by the roots, regressive ideas firmly planted in their place.
They're coming from the Pete Peterson Foundation, David Walker's right and the Hamilton Project, Robert Rubin's wall street liberal left.
More to come
#4 Posted by Thimbles, CJR on Mon 3 May 2010 at 03:52 AM
And when they're not coming or your social security, Robert Rubin and Pete Peterson are having lunch with Tim Geithner discussing their cat-foodanomics plans at the four seasons
http://seminal.firedoglake.com/diary/4021
They are organized and ready, and unless the left gets organized and ready too, they are going to push them out of the debate and do, under Barack Obama's banner, what Bush could not get done - make retirement accounts and put the social security trust fund on wall street.
And nobody wants that, except for fools and sociopaths.
#5 Posted by Thimbles, CJR on Mon 3 May 2010 at 03:59 AM
Who is this hypocritical, lying SOB that is blaming the seniors for the state Social Security is in? If you thieving bastards in Congress had kept your grubby fingers out of the Social Security fund instead of giving it away to win elections, it would still be solvent and able to support several generations. So come of your Bull crap you embezzling bastard and for the first time in your sorry, corrupt political career as a pitiful contribution to humanity and place the blame where it REALLY belongs- right in the laps of you and you elected cronies!
#6 Posted by David H. Faulkner, CJR on Tue 4 May 2010 at 04:07 PM
Robert Kuttner writes a depressing update.
http://www.prospect.org/cs/articles?article=a_new_white_house_economic_strategy
"Over the past week, top White House officials have been floating a trial balloon for their strategy on the economy. At its core is a decision to put deficit reduction ahead of job creation.
The premise is that the bond markets and allied deficit hawks are demanding action to cut the budget, that Obama lacks the votes in the Senate for a serious jobs initiative, and that polls show voters care more about deficit reduction than about jobs.
So the plan, modeled closely on the work of the Peter G. Peterson foundation and the anticipated report of the president's own fiscal commission, is a deal that includes cuts in Social Security plus a new Value Added Tax (VAT), in order to get deep cuts in the deficit. As a sweetener to get Republicans to back the VAT, White House officials would cut the corporate income tax.
The plan is dubious economics and worse politics. You could hardly hand the Republicans a better gift for the fall election. Imagine the GOP TV spots, Fox talking points, and Wall Street Journal editorial: Obama Administration Has Secret Plan to Raise Your Taxes and Cut Your Social Security."
"Of the eighteen members, thirteen are fiscal conservatives. Only four are liberals -- Reps. Jan Schakowsky and Xavier Becerra, Sen. Dick Durban, and Andy Stern of the SEIU. A swing vote is Sen. Max Baucus, who is something of a deficit hawk, but defends Social Security and doesn't like automatic fiscal formulas that weaken his jurisdiction as Senate Finance Committee Chair.
Stepping back from the fiscal wonkery, this astonishing White House course is root canal economics as well as political suicide. If the unemployment rate is still close to 10 percent in November, Democrats in the House and Senate face a bloodbath. Yet Larry Summers has ruled out any new large jobs initiative before the election, according to several well placed sources. And if the White House is planning to hit the middle class with a double whammy of increased taxes through a VAT plus Social Security cuts, that's like handing the Republicans a loaded gun.
The GOP, please recall, came within a whisker of killing health reform because of the diversion of Medicare money. If any program is more sacred to older voters, swing voters, and the Democratic base, it's Social Security.
What can the smartest guys in the room be thinking?"
They are thinking that they aren't Japan, and they are wrong and stupid:
http://www.youtube.com/watch?v=6k0_a1JS5hU
When everybody, including the government, deleverages at once, you get economic contraction because neither the government nor the private sector are doing anything productive with their revenues. They are paying back debt, and that does not jobs make. That stops the flow of capital and creates conditions for deflation.
Deflation? Oh, that's the primary characteristic of a depression, when everyone hoards for a better future that never comes because there's never enough optimism in the present to create it.
And when cash flow stops and cash reserves run out, you have to borrow again anyways negating the whole point of the thrifty suffering.
Washington Conventional Wisdom is too stupid to get this. You have to fight this now, or you will lose a decade to a deflationary spiral which will leave your fiscal situation worse off than when your government began its austerity program. You cannot have the private sector and the public sector paying debts at the same time, because then there is no-investment, no production, no economy.
There needs to be more journalism comparing Japan and America's fiscal difficulties. You cannot cede this ar
#7 Posted by Thimbles, CJR on Tue 25 May 2010 at 02:58 AM
Digby hits the ol' Grandpa Simpson topic again:
http://digbysblog.blogspot.com/2010/06/alan-simpson-mean-rude-and-ignorant-old.html
Comes with a cute youtube interview with the curmudgeon to boot:
http://www.youtube.com/watch?v=BTZ7BN22vtM
#8 Posted by Thimbles, CJR on Sat 19 Jun 2010 at 12:21 AM
Social security may yet need to be cut in order to survive, but not before government pensions. After Congressional and government employee pensions are ended, Social security can be viewed with an eye toward its survival.
The idea that representatives and senators would be entitled to lifetime pensions but that citizens aren't - simply because they managed to be elected or appointed into office - is absurd, and insults every man, woman, and child in this country. The decision to allow Congress to dictate who is entitled to pensions (including themselves), and how much - amounts to rules by which monarchs and dictators operate, not democracies. If Congress wants an "us or them" fight, Congressional pensions vs Social Security may well be the right one to polarize the nation sufficiently to set things right.
There are far more people who depend upon social security than there are Congressional members who have chosen to steal the treasury on their own behalf. Bring it on!
As fiduciaries of the American Treasury, choosing to expend it for oneself rather than for one's people amounts to fraud and unjust enrichment in the first degree - Congressional fraud - at the very least, if not also criminal embezzlement by rule of laws they created.
#9 Posted by Pat, CJR on Fri 19 Nov 2010 at 10:44 AM
Erskine Bowles was on the board of Morgan Stanley and Alan Simpson thinks he`s funny with his little quips.that have had their hand in the till for years.Especially Simpson,that I am sure he is living like the "Fat Cat`s" Then People write artical`s about these two like they are THE WORD..Gotta go Hope you read,Thanks,Ken
#10 Posted by Kenneth Wade, CJR on Fri 4 Mar 2011 at 01:27 PM
Mr. Alan Simpson: I wondered if I could come over to your house...I mean if you'd send me a plane ticket, cause I can't afford one...and use your Lexus/BMW/shiny new car to drive to your grocery store and could I borrow your debit card to buy me some groceries for my fridge at home? And could I borrow a few hundred thousand dollars just to tide me over 'til I die since I don't have any other income except Social Security and Medicare for health issues. I just need the money to pay for rent, groceries, gas, electricity, health insurance, car insurance, income taxes cat food and a few other things. I'm 68 years old and if I play my cards right, I won't have to slit my throat for lack of money and a place to live after you cut Soc Sec and Medicare. I know I'm a greedy, selfish senior citizen, but I kinda think you have plenty to tide YOU over til you die. You get retirement from the gov. substantial health care from the gov. You have a house to live in, ... well, you have enough to live on til you kick the bucket. I just want to say that I think you are an ignorant, brazen bastard and I can't think of any reason why you shouldn't be sent to the war in Afghanistan to get shot instead of the brave young soldiers who go there to fight for YOUR freedom and YOUR right to insult good citizens who have earned their living honestly...unlike you, you SOB. Shove it, you prick. Love, Susan.
#11 Posted by Susan Montague, CJR on Wed 25 Apr 2012 at 09:58 PM