Obama sets up Commission that may cut Social Security
This article is an eye opener. It reveals the business connections of those appointed by Obama to examine social security and make recommendations. All but one have many business connections and are hawks as far as changing Social Security is concerned. The process will no doubt be as an anonymous official says:
an anonymous official told the Times that spending cuts would start with earmarks in order to earn goodwill with the public, and then move on to more "popular entitlement programs."
This is from alternet.
Obama Stacks the Deck
The seasoned networks of money and influence behind the commission's(National Commission on Fiscal Responsibility and Reform) apparent immortality, including "Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly," have been outlined by noted economic journalist William Greider, among others. What's received comparatively little attention so far, however, is the composition of Obama's picks for the commission, what interests they represent, and what that reveals about the White House’s own strategy.
While some optimists have predicted that the 14-vote requirement guarantees gridlock, Obama may have already given Republicans the votes needed to put Social Security under the knife.
Starting at the top, the commission's two co-chairs are both veteran Social Security hawks. The Democrat is Erskine Bowles. Described by Business Week in 1998 as "Corporate America’s Friend in the White House," Bowles is president of the University of North Carolina and a venture capitalist with close ties to Wall Street. He sits on the board of Morgan Stanley and General Motors, both of which have received multi-billion dollar government bailouts since the start of the financial crisis. The finance, insurance and real estate (FIRE) sector was by far the largest donor to Bowles in his unsuccessful Senate campaigns in 2002 and 2004, donating over $3 million. His wife, Crandall Bowles, is on the board of JPMorgan Chase, making the couple two of the biggest beneficiaries of the government's financial welfare over the past two years. Crandall Bowles also gave over $14,000 to Obama's 2008 presidential campaign. Both are members of the Business Council, a prestigious association of major CEOs.
Bowles' Republican co-chair, Alan Simpson, is a former Republican senator who pushed (unsuccessfully) for a back-door benefit cut to Social Security benefits in the '90s by tampering with its cost-of-living adjustment and attacked AARP for its defense of Medicare. Simpson's former Senate aide, Chuck Blahous, is a prolific crusader against Social Security and was executive director of Bush's commission in 2001. In a warning sign for Social Security advocates, Blahous and Robert Reischauer, another policy insider who penned a memo in 2009 with fellow Brookings Institution elites calling for Obama to take "action to stem the growth of Social Security and Medicare," were recently nominated by Obama to be Social Security Trustees. (The Blahous pick he apparently owed to Senator Mitch McConnell.)
Reischauer has close ties to economic wrecking ball Robert Rubin—the Goldman Sachs chairman who became Clinton Treasury Secretary and pushed through radical deregulatory banking laws, then went to Citigroup to score $120 million for driving his company into the ground. Rubin and Reischauer knew each other at both the Harvard Corporation and the Clinton White House, where Reischauer was director of CBO. Reischauer is on the advisory board of Rubin’s Hamilton Project, and the two most recent CBO directors have come straight from Hamilton.
One of Reischauer's co-signers of the Brookings memo, Alice Rivlin, is another fox Obama has put in charge of the Social Security henhouse. Former Vice Chair of the Federal Reserve under Greenspan at the peak of the tech bubble, and also a Hamilton Project board member, Rivlin will likely make another great Wall Street ally on the commission. In 2004 Rivlin co-authored (with Obama's current Office of Management and Budget Director Peter Orszag, among others) a 138-page Brookings report titled "Restoring Fiscal Sanity" advocating $47 billion in entitlement cuts, including an "increase in the retirement age under Social Security" and "more accurate inﬂation adjustments to Social Security beneﬁts."
Keep in mind that she supported this plan before most of Bush's military expenditures, before the Great Recession, and before the financial bailouts. If that's not enough, Rivlin, who gave roughly $10,000 to Obama's 2008 campaign, was also on the board of Public Agenda Foundation with Peter Peterson, the private equity kingpin who has devoted literally billions to destroying Social Security during his lifetime. Public Agenda has organized research and events to refine elite strategies for pushing deficit reduction, including entitlement reform. From a recent Public Agenda forum titled Trillions of Reasons to Get Serious About Our Fiscal Future:
"Panelists agreed that the key word when talking about reducing the deficit should be 'sacrifice' and not just for the wealthy, a message to which most Americans might respond negatively."
That's three out of three votes for "sacrifice," and we haven't even gotten to Obama's other Republican pick, David Cote, who is CEO of Honeywell, a major defense contractor with millions in profits at stake in maintaining our out-of-control military budget. Cote is also a former executive at GE, another big military contractor, and director of JPMorgan Chase. Obama has named Cote, who supported the stimulus bill, as one of his favorite CEOs. He is additionally a senior adviser to KKR, the infamous leveraged buyout firm, and a member of the Business Roundtable, a powerful association of CEOs that has spent millions fighting Social Security.
Obama's fifth pick is Ann Fudge, a major campaign bundler who already spends a bit of time around tables with the American banking elite. Fudge was chairman of the board of advertising firm Young & Rubicam Brands, which includes former Bear Stearns CEO Alan Schwartz, until 2006. She's now on the boards of Brookings and Rockefeller Foundation, both teeming with top Wall Street elites (including Prince, Parsons, Gupta, Hutchins, Johnson, Rubenstein and Wolstencroft, to name a few), as well as GE and Novartis Pharmaceuticals. With her extensive marketing experience, perhaps she'll be the one who figures out how to sell the commission's "sacrifices" to the public.
Bruce Reed, whom Bowles and Simpson recently named as the commission’s executive director, can help Fudge brainstorm slogans. Reed is CEO of the corporatist Democratic Leadership Council (previously chaired by Joe Lieberman for six years, and now by Hamilton Project advisory board member and Blue Dog Harold Ford, Jr), is very tight with Rahm Emmanuel (they wrote a book together), and coined the phrase “end welfare as we know it.” Any other social program Reed would like to end as we know it?
A foregone conclusion?
Andy Stern, president of SEIU, is Obama's only pick out of six who is sure to oppose Social Security cuts. Everyone else is likely open to slashing.
For the commission to reach an agreement, its Democrats will have to win the support of at least two Republicans, which will be nearly impossible unless spending cuts are among its proposals. That Obama’s picks are so amenable to, if not gunning for, some form of benefits cuts suggests the White House is indeed seeking such a "grand bargain" from the commission, not a stalemate. The odds are slim, especially given the commission’s history, that five of the 10 Democrats would defy the White House to kill such a bargain.
As the New York Times confirms, in establishing the group Obama has once again adopted a course favorable to his economic advisers and their Wall Street friends over the objections of his political team. How much of the usual looting this will involve remains to be seen. They seem to be proceeding carefully. Earlier, following Obama's recent spending freeze announcement, an anonymous official told the Times that spending cuts would start with earmarks in order to earn goodwill with the public, and then move on to more "popular entitlement programs."
"By helping to create a new atmosphere of fiscal discipline, it can actually also feed into debates over other components of the budget," the official said, briefing reporters on the condition of anonymity.
Which administration official might this be? Sadly, it could be just about anyone, as Obama’s economics team is dominated by Wall Street-friendly advisers, most of whom are close friends and proteges of Robert Rubin, and have been calling (pdf) for Social Security reductions for years. The March 23 Gray Lady front-pager mentions two of them, Orszag and Jason Furman, along with associate budget director Jeffrey Liebman, as likely masterminds. Both Orszag and Furman followed Rubin into Obama's inner circle from the Hamilton Project. Liebman too has a history of Social Security mischief – he was on the commission under Clinton.
If President Obama wants to get heavy handed about the deficit, he could start by putting an end to the disastrous and unpopular schemes that created it – the Bush tax cuts, the wars in Iraq and Afghanistan and the trillions of dollars funneled to Wall Street. Unfortunately, it looks like Obama has taken the bankers' bait: the only people disciplined by his fiscal retreat will be millions of senior citizens with the gall to believe that society should guarantee them a decent standard of living.
Matthew Skomarovsky is a co-founder of LittleSis.org, an involuntary facebook for powerful Americans. He is also co-director of the Public Accountability Initiative.