Now Obama Owns a Deficit Commission – and Senator Simpson

Roger Hickey

This morning President Obama signed an executive order creating a National Commission on Fiscal Responsibility and Reform.

This commission is based on an idea promoted by two Senators, Kent Conrad (D-N.D.) and Judd Gregg (R-N.H.). Senate Finance Committee Chairman Max Baucus warned that the Conrad-Gregg legislative version of the deficit commission would have “painted a big red target on Social Security and Medicare. That’s what this commission is all about. It’s a big roll of the dice for Social Security and Medicare.”

President Obama pushed to get the Senate to pass the Conrad-Gregg commission, which would have required the Congress to vote on its budget-cutting recommendations in a “fast-track,” undemocratic up-or-down vote with no amendments and little opportunity for debate. Senate Republicans, some of whom sponsored the legislation, refused to vote for it – so Obama is doing something similar by executive order.

So what should the 60 organizations and many concerned citizens who opposed the Conrad-Gregg version of this commission (because they heeded Sen. Baucus’s warnings) think about the Obama version?

One very bad sign: The President announced that the Republican co-chair of this bipartisan commission would be former Senator Alan Simpson, who hated defenders of Social Security and Medicare so much that he tried as Senator to attack and intimidate AARP, holding hearings that could have affected the senior groups tax status. A May 4, 1995 AP story reported then-Representative (now Senator) Ron Wyden called Simpson’s behavior “’classic scapegoating’ and said Simpson is trying to cover up Republican efforts to cut Medicare by discrediting AARP.”

Bill Scher’s post yesterday about the Simpson pick refreshes our memories about the aggressive role that then-Senator Simpson played in pushing for cuts to Social Security — and attacking AARP. All over Washington today organizations that care about the elderly are warning that this commission could easily turn into a “runaway train” that could do great damage to Social Security and Medicare. The appointment of Alan Simpson gives no relief to those concerns.

Now before I get pegged as a liberal who doesn’t care about the fiscal health of my nation, let me make it clear that I am in favor of getting the deficit under control. As many recent studies have shown, that deficit (and resulting debt) are due to the profligate tax cuts for the wealthy under George Bush, the Medicare Part D program and two wars that were launched with no worry about paying for them. And the massive recession has hit tax revenues while requiring that Obama launch a crucial stimulus program that kept the world from plunging into a second Great Depression.

Yesterday, President Obama reiterated how important that stimulus spending has been. And he made the case for spending more money (without balancing it with program cuts or tax increases) to get unemployment down and jobs growing again. One problem is that premature focus on deficits chokes off economic recovery.

So, things to worry about: the Obama Commission takes up the Simpson and general conservative fixation on cutting Social Security and Medicare – even though Social Security is now paying for itself and providing extra funds to finance the deficit. Even though the Obama administration is rightly trying to reform the whole health care system which is driving Medicare costs – and they are working to reform Medicare without cutting benefits – conservatives like Simpson want to slash benefits.

Progressives who agree that the deficit is a long-term problem can and must make the case for protecting and improving Social Security and Medicare benefits, while demanding that the nation and this Obama commission focus on reforming the health care system.

There is another job progressives need to take up: defending the original Obama vision for expanded public investment to make the economy prosper for everyone, including unemployed workers.

Here’s the big danger: the Obama deficit commission could find enough budget cuts and revenue just to get the deficit down to their 3 percent of GDP target over time. But that would leave nothing for the Obama investment agenda. Despite Obama’s campaign rhetoric, it is pretty clear that this deficit commission will prioritize any new revenues and spending cuts for deficit reduction.

We need to make the case for that more expansive strategy: finding the appropriate revenues (and defense cuts) to both reduce the deficit and expand the investments in good, green jobs, public infrastructure, job training and the next generation of energy-efficient technologies that candidate Obama talked about so eloquently on the campaign trail.

So if we want them to protect and strengthen Social Security and Medicare and expand public investment to build a productive economy, we are going to need a collective effort to make the case very forcefully.

Is President Obama on our side in this effort?

Yesterday, he went beyond defending the stimulus, to remind Americans of his original vision for the economy.

Progressives, read this presidential speech and get to work fighting for THIS vision of a federal budget that works:

We knew when we came into office that it wasn’t enough simply to solve the immediate crisis before us. We knew that even before the crisis hit, we had come through what some people are calling the “lost decade” -– a period where there was barely any job growth, and where the income of the average American household declined. This is before the recession, over the course of the decade, the average American household, they saw their incomes decline even as the cost of health care and college tuition were skyrocketing, had reached record highs. The prosperity was built on little more than a housing bubble and on financial speculation — people maxing out on their credit cards, taking out home equity loans.

We can’t go back to that kind of economy. That’s not where the jobs are. The jobs of the 21st century are in areas like clean energy and technology, advanced manufacturing, new infrastructure. That kind of economy requires us to consume less and produce more; to import less and export more. Instead of sending jobs overseas, we need to send more products overseas that are made by American workers and American business. And we need to train our workers for those jobs with new skills and a world-class education.

Other countries already realize this. They’re putting more emphasis on math and science. They’re building high-speed railroads and expanding broadband. They’re making serious investments in clean energy because they want those jobs.

And America cannot stand still in the face of this challenge. We can’t afford to put our future on hold. So that’s why a big part of the Recovery Act has been about investing in that future. Yes, it created jobs now. Yes, it created business opportunities now. But more importantly, it’s laying the foundation for where we need to go.

So instead of just pouring more money into America’s schools, regardless of their performance, we launched a national competition between states that only rewards success and reform — reform that raises student achievement, and inspires students to excel in math and science, and turns around failing schools — failing schools that steal the future of too many young Americans.

We’re also making sure that our nation has an infrastructure that’s built to compete in the 21st century. So we now have projects in 31 states that are laying the ground for the first high-speed rail network in the United States of America. I mean, for years, Japan and Europe have had high-speed rail. China has got about 40 times as many projects that have been going on, on this front. We’re playing catch-up; we shouldn’t be.

The Recovery Act has made possible over 12,500 transportation construction projects, from rebuilding highways to improving our airports. And today we announced funding for over 50 innovative transportation projects across America –- everything from railroads in Appalachia to a new passenger terminal in New Orleans.

These projects will put hundreds of thousands of Americans to work. And in many cases, they already have. That’s part of the reason that Chuck is here today — he’s the president of a construction company in Pennsylvania, and the Recovery Act will fund about a third of the work his paving company will do this year. That’s allowed him to hire two engineers and about a hundred employees. So in case people are wondering whether or not the Recovery Act has created jobs and opportunity for businesses, talk to Chuck. (Laughter.)

The new equipment he’s ordered to help pave these roads will save an additional 40 jobs on an assembly line out in California. These are well-paying, long-lasting, private sector jobs that wouldn’t be possible without the Recovery Act. They’ll be doing the work that America needs done to stay competitive in a global economy.

In no area is this more important than in energy. Because of the Recovery Act, we have finally jumpstarted the clean energy industry in America, and made possible 200,000 jobs in the clean energy and construction sectors.

Just take one example: Consider the investment that we’ve made in the kind of batteries used in hybrid and electric cars. You’ve heard about these, right? Before the Recovery Act was signed, 98 percent of the world’s advanced battery production was done in Asian countries. The United States did less than 2 percent of this advanced battery manufacturing that’s going to be the key to these high-mileage, low-emission cars.

Then we invested in new research and battery technologies, and supported the construction of 20 battery factories that will employ tens of thousands of Americans -– batteries that can make enough — factories that can make enough batteries each year to power half a million plug-in hybrid vehicles. So as a result, next year — next year, two years after the Recovery Act — the United States will have the capacity to produce nearly 20 percent of the world’s advanced batteries — from less than 2 percent to 20 percent. And we’ll be able to make 40 percent of these advanced batteries by 2015 — an entire new industry because of the Recovery Act.

This kind of progress is happening throughout our clean energy sector. Yesterday I announced loan guarantees to break ground on America’s first new nuclear power plant in nearly three decades -– a plant that will create thousands of construction jobs and 800 permanent jobs in years to come. There’s the manufacturer in Philadelphia who makes energy-efficient windows. He used to be skeptical about the Recovery Act until he had to add two more shifts just to keep up with the new business it’s created.

And Blake at Namaste Solar — it’s based in Boulder, Colorado. One year ago, Blake gave us a tour of one of his company’s solar installations, on top of a museum in Denver, right before I signed the Recovery Act into law. And at the time, Blake was pretty sure that the recession would force him to lay off about half of his staff. One year later, because of the clean energy investments in the Recovery Act, he has instead added about a dozen new workers, and expects to hire about a dozen more by year’s end. His company continues to install solar panels all over Colorado, from the Governor’s Mansion to the Denver Museum of Natural — Nature and Science.

So that’s our future. That’s what’s possible in America. You can argue, rightly, that we haven’t made as much progress as we need to make when it comes to spurring job creation. That’s part of the reason why the Recovery Act is on track to save or create another 1.5 million jobs in 2010. That’s part of the reason why I expect Congress to pass additional measures as quickly as possible that will help our small business owners create new jobs; give them more of an incentive to hire.

But for those skeptics who refuse to believe the Recovery Act has done any good, who continue to insist that the bill didn’t work, I’d ask you to take that argument up with Blake and his employees. Take that argument up with Chuck and his construction workers. Take it up with the Americans who are working in those battery plants, or building those new highways, or teaching our children new skills — all because the Recovery Act made it possible.

So our work is far from over, but we have rescued this economy from the worst of this crisis. And slowly, in new factories and research facilities and small businesses, the American people are rebuilding a better future. And we will continue to support their efforts. We will leave our children an economy that is stronger and more prosperous than it was before.

Comments