Friday, August 27, 2010

Alan Simpson, co-chair of Obama's committee on reducing federal deficits, shoulders the heavy burden of objectively deciding whether or not people's Social Security really must be cut. Part 2

Alan Simpson (left)

Alan Simpson, Senator Guttermouth, Spews Again

William Greider
August 26, 2010 

Retired Wyoming Senator Alan Simpson, who inherited a soft-cushion career in politics from his father, is a garrulous old crank who at 79 seems desperate for attention. Simpson likes to pop off provocatively. He cannot resist mocking lesser mortals like Social Security recipients with mean-spirited ridicule. Simpson is an always quotable darling of Washington reporters, who mistake his nastiness for straight talk, who are too lazy to check out his ugly distortions.

Simpson should have been turned out to pasture years ago, but instead he was give a teaching post at Harvard and Barack Obama made him co-chair of the President's bipartisan commission on reducing the federal deficits. Every savvy player in the Capital knows what the president has in mind--whack Social Security benefits to lure Republicans into a grand deal on raising taxes. As I have written more than once, when Washington talks up bipartisan compromise it usually means the people are about to get screwed.

That train is rolling down the tracks now, but don't expect major media coverage to alert the populace. The prestige newspapers are on board for this deal and Obama's commission won't reveal its recommendations until right after the election. Too late for folks to make a stink.

Senator Trash Mouth keeps messing up the plan, however, by provoking outrage with his tasteless zingers. Most recently, Simpson compared Social Security--the federal government's most beloved program--to "a milk cow with 310 million tits." Instead of yuks, the senator got angry blowback--congressional demands that he resign or be fired by the president. Important liberal groups like the AFL-CIO joined the chorus of complaints. Simpson apologized, the Prez stood by him. Personally, I hope Simpson stays on the commission and continues to speak out. He's doing more harm than good for Obama's sleight-of-hand politics.

Anyway, Alan Simpson is not nearly as bad as some political reporters at the New York Times and other leading newspapers who dutifully repeat the establishment's falsehoods and distortions about Social Security. Some reporters probably know better but lack the nerve to write dissenting versions. Many reporters are simply ignorant but loyal to their sources. Social Security, as Nation writers have explained many times, does not contribute a penny to federal deficits and it never will, according to the terms of the law. The opposite is the case.

On the same page the Times reported Simpson's latest gaffe, political reporter Matt Bai contributed a far more outrageous falsehood of his own. In condescending style, he dismissed opponents to Social Security cuts (dimwits like me) as stuck-in-the -past liberals, trying to defend big government against harsh reality. Bai celebrated the courage of Rep. Earl Blumenauer of Oregon, a Democrat who evidently embraces the same view. Bai did not mention the people and public opinion overwhelmingly opposed to benefit cuts (check the polls if you doubt this). Someone should ask Congressman Blumenauer's constituents how they feel about his brave stance.

Bai's great falsification was to insinuate that the Social Security's trust fund is bogus--that the massive surpluses collected from working people to pay for their future retirements are meaningless. Social Security, he acknowledged, has amassed a pile of Treasury bonds--IOU's from the government--but he says as a practical matter that money can't be paid back because taxes would have to be raised or more funds borrowed elsewhere. "This is sort of like saying that you're rich because your friend has promised to give you 10 million bucks just as soon as he wins the lottery," Bai explains.

His comparison is a clever but consequential lie, consistent with the elite propaganda. Bai makes it sound like the government is going to give this money to retirees. In fact, it's the other way around. Social Security collected this money from workers as their involuntary savings, better known as FICA deductions. Then the federal government borrowed the money from us and spent it on other things. Congress raised the FICA deductions 25 years ago on all working people to pay for the baby boom generation's copming retirements. The Social Security trust fund has since built up massive surpluses--$2.5 tillion now and growing to $4.2 trillion in 2023--and set it aside for the future. But, starting with Ronald Reagan, the federal government ran massive deficits on its own budgets and borrowed the savings from Social Security to pay for wars and military build-ups, regressive tax cuts for the wealthy and corporations, among other things.

This vast wealth belongs to the working people who paid it--not to the federal government or Congress. Naturally, many politicians would like to get out of paying it back, but that constitutes a massive bait-and-switch swindle of working people. Bai and many other reporters of the mainstream media have been assured by their sources it is impossible to pay back that money, but that is a political choice, not a fiscal requirement. It would make working people pay for Republican gravy that went to someone else.

Another way to understand the swindle is to think of working Americans as the US government's largest creditor, even larger than China. The IOUs belittled by Bai represent the "full, faith and credit" of the US government as surely as the Treasury bonds held by China and other foreign creditors. What Obama's deficit commission is talking about is arranging a sly partial default with the hope the people won't figure it out.

Someone should write a letter of complaint to the Times ombudsman (better still, a thousand letters). Given the facts, why has the Times never reported the full story of Social Security's trillions and its true relationship to the federal deficits? For that matter, why not assign an unbiased reporter to examine what the public thinks? The public opinion polls are shockingly one-sided on this matter.

Meanwhile, if people want to get nasty in return, they might direct some tart reform suggestions to Sen. Simpson and his commission colleagues. In the interest of fairness, for instance, why not cut Simpson's government pension benefits as much or more than they intend to cut Social Security benefits. After all, he can afford it. And Simpson likes to talk about his new knee--recently replaced with a $70,000 operation. Did he pay for his new knee or did the taxpayers? It would be fun to find out.

William Greider
National Affairs Correspondent

William Greider, a prominent political journalist and author, has been a reporter for more than 35 years for newspapers, magazines and television. Over the past two decades, he has persistently challenged mainstream thinking on economics.

For 17 years Greider was the National Affairs Editor at Rolling Stone magazine, where his investigation of the defense establishment began. He is a former assistant managing editor at the Washington Post, where he worked for fifteen years as a national correspondent, editor and columnist. While at the Post, he broke the story of how David Stockman, Ronald Reagan's budget director, grew disillusioned with supply-side economics and the budget deficits that policy caused, which still burden the American economy.

He is the author of the national bestsellers One World, Ready or Not, Secrets of the Temple and Who Will Tell The People. In the award-winning Secrets of the Temple, he offered a critique of the Federal Reserve system. Greider has also served as a correspondent for six Frontline documentaries on PBS, including "Return to Beirut," which won an Emmy in 1985.

Greider's most recent book is The Soul of Capitalism: Opening Paths to A Moral Economy. In it, he untangles the systemic mysteries of American capitalism, details its destructive collisions with society and demonstrates how people can achieve decisive influence to reform the system's structure and operating values.

Raised in Wyoming, Ohio, a suburb of Cincinnati, he graduated from Princeton University in 1958. He currently lives in Washington, DC.

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