Defense Lobby Wins, Middle Class Loses In Obama Debt Proposal

Richard Eskow

The President’s latest budget offer slashes a 95 year old retiree’s Social Security benefits by more than nine percent — and trims the defense budget by less than one percent.

Nancy Pelosi insists that these benefit reductions aren’t “cuts,” which is consistent with the propensity to describe the slowed growth or freezing of military spending as a “reduction.”

Pelosi says she’ll push this deal in Congress and that most recalcitrant Dems will eventually fall in line behind it. She said they’ll “stick with the President” – as opposed to, for example, sticking with seniors.

Why are people so anxious to avoid the “fiscal cliff” that they’ll sacrifice the elderly, along with the disabled, veterans, and their families? And why does the President’s proposal ask so much more “shared sacrifice” from them than it does of the nation’s bloated defense contractors?

As the old saying goes: Follow the money.

Ike’s Warning

In this case the money trail quickly leads from the corridors of power to the boardrooms of the Military Industrial Complex.  (You didn’t think it had gone away, did you?)

The contours of our national budget debate – both in the press and among politicians – have been shaped by a small cadre whose latest front group is called “Fix the Debt.”  Thanks to some in-depth investigative reporting from the Public Accountability Initiative, we now know that “Fix the Debt” is deeply embedded with the defense industry.

That’s the almost all-powerful lobby which President (and five-star General) Dwight D. Eisenhower named in his final Presidential address. “We must guard against the acquisition of unwarranted influence” by that lobby, Eisenhower said, adding:  “We must never let the weight of this (complex) endanger our liberties or democratic processes,”

How’s that working out for you?

Under the Influence

Fix the Debt’s participants are linked to 43 companies – companies whose defense contracts amounted to $43 billion in 2012 alone. It has a $60 million publicity budget.  And it’s scooped up some self-interested Democrats to lend that all-important “bipartisan” air to its lobbying efforts.

The Fix the Debt cluster of lobbyists has also co-opted some lazy journalists who can’t be bothered to learn the subject matter for themselves, content to treat its spoon-fed “facts” and ideas as gospel truth instead.

This corporate lobbying front has moved Beltway and media perception so far to the right that even an opinion supported by 75 percent of Tea Party members is considered too “leftist” and “extreme” to be taken seriously. [1]

Sharing the sacrifice … among seniors, veterans, and the disabled

It shows.  In their world the President’s counter-offer represents the “left” side of the political spectrum. It slashes Social Security $122 billion over ten years, increases the tax burden on middle-class (but not high-earner) income, and calls for only a $100 billion reduction in planned defense spending.

That’s right:  The President’s “compromise” counter-offer asks seniors, veterans, the disabled, and non-wealthy working people to “sacrifice” roughly three times much as the Pentagon and its contractors. It reduces an 85 year old’s benefits by 6.5 percent and a 95 year old’s by 9.2 percent, while trimming less than one percent from our trillion-dollar defense budget.  What does that say about our values?

And remember: That’s just his bargaining position. It’ll go down from there.

There is no cliff

But isn’t the “fiscal cliff” a disaster to be avoided at all costs?[1] In a word: No.Financial analyst Barry Ritholtz has been one of the few financial voices to point out the obvious: the stock market doesn’t care about the ‘fiscal cliff,” or about a possible downgrade in the Federal government’s credit rating. And via Wonkblog, he has the chart to prove it.

And I have the chart (here) to prove that, contrary to popular ‘expert’ belief, the stock market didn’t care about a ratings downgrade the last time it happened. It also proves that the market fell after the last Obama/Boehner round of budget cuts.

It’ll probably do the same thing their next deal, too. Austerity agreements are terrible for the entire economy – with the exception of defense contractors and a few other special interests.

Grave Implications

So who’s really afraid of the “fiscal cliff”? These headlines offer some clues:

“We must not fail to comprehend its grave implications,” Eisenhower said of the defense lobby. “Our toil, resources and livelihood are all involved; so is the very structure of our society.”

Miracle On K Street

Meanwhile, in the supposedly “deadlocked” city of Washington, there’s agreement about somethingBloomberg News reports that “House and Senate negotiators agreed on U.S. defense legislation authorizing about $640.7 billion in the current fiscal year for the Pentagon.”

Boy, the Pentagon must have lobbied really hard to get that kind of money in this fiscal climate. Right?  Wrong:  “On Tuesday, Defense Secretary Leon Panetta called on lawmakers to cut $74 billion in “needless” spending on weapons—to no avail.”

As we were saying, a reduction of less than one percent – as we wind down two wars, more or less – is the left side of the debate now. So who did lobby so successfully, for such an astonishing sum of money?

The defense lobby and its politician friends are hoping you won’t ask. Just think of it as a Christmas miracle.

The Name Game

How does this cynical lobby create a political climate in which a proposal that cuts benefits and raises taxes for the middle class is the liberal side of the debate?

That’s where “Fix the Debt” comes in.  This supposedly unbiased group of CEOs is only the latest incarnation of a longstanding anti-tax, pro-giant-corporation lobbying web.   This entity goes by many names: The  “Committee for a Responsible Federal Budget.” The “Comeback America Initiative.” “The Can Kicks Back.” And many more.

Please allow me to introduce myself …

The Usual Suspects

But while the names change, the players stay the same – including Alan Simpson, Erskine Bowles, and corporate and defense-industry stealth super-lobbyist Maya MacGuineas.

So do their “unbiased” recommendations: Lower tax rates for millionaires, billionaires, and corporations (in the name of deficit reduction, no less.) Eviscerate Social Security and Medicare and turn their functions over to private corporations.

They say they want a “national conversation” about government debt. But when defense spending comes up they always change the subject.

Peace On Earth, Goodwill Toward Raytheon

The latest “lucky” break for defense contractors came just today, as Senate and House negotiators from both parties agreed to protect defense contractors from some of sequestration’s worst features.

“A leading industry organization cheered the (the) changes,” reported the Washington Business Journal,”… which softened the potential blow for contractors in the areas of workforce, compensation, and oversight.”

Congratulations, contractors, on this unexpected stroke of good fortune. Now who’ll soften the blow for the rest of us?

“Only an alert and knowledgeable citizenry can compel the proper meshing of the huge industrial and military machinery of defense with our peaceful methods and goals,” said Eisenhower, “so that security and liberty may prosper together.”

Obama and Pelosi are pushing a deal that lets this “machinery” prosper at the expense of our “peaceful goals.” This holiday season is becoming the time for an “alert and knowledgeable citizenry” to take action.

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[1] 75 percent of Republicans and 76 percent of self-described Tea Party supporters told pollsters they opposed cutting Social Security to balance the deficit. So did more than 80 percent of Americans overall. But unless we do something it’s going to happen anyway.

 

 

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