Multibillonaire Peter G. Peterson’s Fiscal Summit may have started with conciliatory nods toward bipartisanship, but it did not climax that way. And that had to have been by design.
Peterson and the people who planned the Fiscal Summit had to have known when they planned to have House Speaker John Boehner as the day’s closing speaker that he would deliver the right-wing, red-meat, no-compromise speech that even Peterson himself was too polite to give. If that was the case, Boehner did not disappoint, declaring that he would once again risk having the federal government default in order to ram his conservative austerity agenda down the throat of the nation.
Yes, allowing America to default would be irresponsible. But it would be more irresponsible to raise the debt ceiling without taking dramatic steps to reduce spending and reform the budget process.
We shouldn’t dread the debt limit. We should welcome it. It’s an action-forcing event in a town that has become infamous for inaction.
… When the time comes, I will again insist on my simple principle of cuts and reforms greater than the debt limit increase. This is the only avenue I see right now to force the elected leadership of this country to solve our structural fiscal imbalance.
We already know what this looks like because the House last week passed its budget bill, based on the budget plan written by Rep. Paul Ryan, R-Wis., the House Budget Committee chairman. (Ryan was at the summit as well, as its lunchtime speaker, followed by his Democratic counterpart on the budget committee, Rep. Chris Van Hollen of Maryland.) This is the measure that breaks a budget deal between Congress and the White House in order to impose deeper cuts in aid to struggling Americans in order to protect the Pentagon from budget cuts.
As Greg Kaufmann reported in The Nation, these cuts in 2013 include $36 billion less in spending on food assistance to the poor (the SNAP, or food-stamp, program), eliminating 5.5 million children from eligibility for the Child Tax Credit and eliminating programs under the Social Services Block Grant that serve millions of low-income children and seniors. At the same time, under the Ryan budget millionaires would receive on average $265,000 in additional tax cuts on top of the $129,000 in tax savings they would already receive by extending the Bush tax cuts beyond their planned expiration at the end of the year.
Because neither the Senate nor President Obama will stand for this disastrous budget plan—literally taking food from the mouths of the poor to pay for tax cuts for millionaires and more wasteful contracts for the military-industrial complex—Boehner in essence said that he will take by extortion what he cannot win through a democratic process.
Note what he said: “We shouldn’t dread the debt limit. We should welcome it. It’s an action-forcing event…”
This fits the Peterson narrative. As Ryan Grim writes in The Huffington Post, Peterson “has spent lavishly to shape a national conversation focusing on the deficit rather than on jobs and economic growth”—in fact, at least $458 million since 2007, based on an examination of the tax records the Peter G. Peterson Foundation.
And while all this money appears to have had scant effect on general public opinion, it has had significant effect on inside-the-Beltway elite consensus that, as Peterson himself stated in his opening remarks, that the federal deficit is “a transcendent threat to our economic future.” The Fiscal Summit was carefully designed to reinforce that consensus, even as it allowed in a trickle of differing points of view about how to address the deficit.
Meanwhile, outside the Fiscal Summit, several dozen protesters showed up to present the real grassroots consensus, one that was largely muted during the slickly produced Peterson show inside. (The speakers included our co-director Roger Hickey.)
“Let’s start telling the people of this country the truth about our economic situation. Let’s tell the American people the truth that Social Security is not only not broke, it’s not in crisis, has a surplus, and can be made to have a surplus for 75 years very easily,” said Terry O’Neill of the National Organization for Women.
“Here’s how you do it: scrap the cap [the roughly $107,000 limit on taxable Social Security earnings]. It is not OK that someone making a million dollars a year pays point-zero-something percent in payroll taxes when the rest of us pay 6 percent in payroll taxes. Take off that cap and let’s have the billionaires pay their fair share into the Social Security system, Number two, let’s get a full employment economy going. Folks, at 4 percent unemployment you’ll have more payroll taxes going into the Social Security system. … Number three, let’s start talking unequal incomes and inequality right away. It is not OK that CEOs are currently paid some 360 times what workers are paid in this country. That is not acceptable. Raise the minimum wage to $10 or more and you will immediately see a stronger Social Security system.”
Sen. Bernie Sanders, I-Vt., said that he found it “morally grotesque” that Peterson, who built his wealth as a Wall Street investor, is funding a conference that is designed to promote cuts in Social Security, Medicare and other economic security programs.
“The top 1 percent, Mr. Peterson and his friends, own over 40 percent of the wealth in this country. In contrast, if you can believe it, the bottom 60 percent of Americans, the people who will be hurt terribly by the proposals coming out of this conference, they own 1 percent of the wealth of America. So if we want to move towards deficit reduction, maybe the time is now to ask Mr. Peterson and his billionaire friends to start paying their fair share of taxes rather than devastating middle income and working families,” Sanders said.
Boehner, for one, was having none of that. He did not hear the demonstration outside, but he had his sock answer for anyone who dares suggest that the wealthiest Americans should do some sacrificing of their own to help address the deficit they claim to fret so much about. “What also doesn’t count as ‘cuts and reforms’ are tax increases,” Boehner said, because—cue mindless, conservative mantra—”tax hikes destroy jobs.” Yes, just as the Clinton tax hikes did back in the late 1990s when we had unemployment, um, going down to 4 percent and the federal budget in, er, surplus.
Boehner also said he has another anti-democratic strategy up his sleeve: “an expedited process by which Congress would enact real tax reform in 2013. This process would look something like how we handle Trade Promotion Authority, where you put in place a timeline for both houses to act.”
Trade Promotion Authority was designed to avoid a congressional process that workers could influence and challenge. It could be driven solely by negotiators in the executive branch and by congressional leadership, with the sole recourse being an all-or-nothing vote on the final package. Boehner wants to do this with the entire tax code, aiming to ram through the Peterson one-percenter agenda of much lower tax rates, with a bone thrown in the direction of closed tax loopholes that may actually bonk the heads of middle-class taxpayers, as they find themselves losing tax benefits that they depend on but getting comparatively little, if anything, from a reduced rate.
After Boehner’s speech and some questions from CNN’s Erin Burnett, the aging Peterson shuffled out to close the summit. He chose not to say anything that would change the tone of Boehner’s speech. Instead, he thanked everyone for participating in a “stimulating” discussion and walked off the stage.
This post was updated at 5:30 p.m. with quotes from the Fiscal Summit protest.