Deficit Rorschach Test: The Presidents, the Editors, and the Truth

Both political parties have "an aversion to telling the truth," says The Washington Post [1]. The truth? That newspaper's editors are part of a small but powerful billionaire-funded circle that seems to believe that any facts which don't support their distorted and unpopular ideas are deviations from the "truth."

With a few selected phrases, President Obama and former President Clinton appeared to endorse this tiny faction's recovery-crushing austerity approach last week in Charlotte. But the rest of their speeches, along with others given at the convention, were a strong rejection of the privately-authored set of policy proposals known as "Simpson-Bowles."

That's good, since Simpson-Bowles so closely resembles the Republican Party Platform that the Democrats could wind up running against themselves.

Voters should embrace the Democrats' stirring anti-austerity rhetoric. They should also encourage Democratic leaders to embrace their own rhetoric, to stop 'triangulating' themselves into invisibility and speak plainly and directly to the American people:

In other words, Democrats should say they oppose any cuts to Medicare or Social Security benefits. They should say they'll use government resources to create and protect the jobs we need - for teachers, firefighters and police officers, among others. And that the face facts and address the real cause of the government's long-term budget deficit.

The Circle

The "truth"? To paraphrase Jack Nicholson in "A Few Good Men," the members of this circle can't handle the truth.

But then, contradiction is their stock in trade: They call themselves "bipartisan," though their views are opposed by majorities in both parties. They call themselves "civil," although they engage in relentlessly ad hominem attacks on their critics. They call themselves "truth-tellers," although all but the most extreme and ideological economists reject their ideas. And they insist that they're the only ones displaying "courage," as if advocating for the rich and powerful has ever been the brave thing to do.

Who are they? They're the small group of politicians, ex-politicians, consultants and advisors who are closely connected to anti-government billionaire Pete Peterson. Several of them were appointed to the President's Deficit Commission, in what is most generously described as a colossal error in judgment.


This small but well-funded cadre has convinced a number of key media outlets, chief among them The Post, that long-term government deficits are our chief problem—this in a time of growing wealth inequity, wage stagnation, declining consumer confidence, and the widespread human anguish that has been brought on by extraordinarily high (and extraordinarily long-term) unemployment.

The Editors

You'd think the Post would change up its editorial positions once in a while, if only to avoid the appearance of being a house organ for the crowd that's pushing low tax rates for millionaires and billionaires while advocating cuts to Medicare and Social Security for everyone else. But they can't seem to help themselves.

They "can't recall a single hard truth the politicians told us" at the conventions, the paper's editors wrote [1] this weekend. Which "truth" went untold and un-"hardened"? "The national debt," say the Editors.

And yet Obama mentioned the national debt, his "bipartisan debt commission," and the "deficit" (our annual shortfall) quite a few times. Biden mentioned the national debt too. And Bill Clinton devoted five or ten minutes to the subject in the "arithmetic" portion of his speech.

The Democrats' emphasis on debt reduction was, in our opinion, misplaced—at least while the country struggles through a jobs and wage stagnation crisis. But the Editors are wrong to claim it wasn't mentioned.

Then again, to this crowd the "truth" only seems to mean one thing: their truth, and their program.

The Program

This small circle is pushing a clear, simple program: Even lower tax rates for corporations and the wealthiest Americans. Benefit cuts to Social Security, along with changes to Medicare that (especially in today's political climate) would cause its slow deterioration and eventual collapse. Limits on how much money the government can spend, irrespective of the need at any given time.

If you think that looks a lot like Paul Ryan's budget, which is now the GOP's official budget, or like the Republican platform, you're right. Even the GOP's lower tax rates for millionaires and billionaires are in the Simpson-Bowles proposal.

Is that what President Obama was endorsing when he said these words? "I’m still eager to reach an agreement based on the principles of my bipartisan debt commission." (That commission actually deadlocked and failed to issue any conclusions; he is referring to a document which was privately prepared by Simpson and Bowles, its two co-chairs.)

Or what Bill Clinton was endorsing when he spoke of "the kind of balanced approach proposed by the Simpson-Bowles Commission, a bipartisan commission (sic)"? (Clinton was endorsing an approach that depends twice as much on cuts as it does on tax increases for the wealthy; that doesn't sound "balanced" to us.)

Only Joe Biden kept a slight distance from the Simpson/Bowles proposal, suggesting only that it came from a "respected" source. Said Biden: "They rejected every plan put forward by us, by the bipartisan Simpson-Bowles Commission (sic) they referenced or by any other respected group."

Equal Time

The Simpson-Bowles tax plan is very similar to the one Bill Clinton was mocking last week when he talked about those unspecified "I'll tell you after the election" loopholes President Obama made fun of this policy too: “Have a surplus? Try a tax cut. Deficit too high? Try another."

Joe Biden said "President Obama knows that creating jobs in America, keeping jobs in America, bringing jobs back to America is what the president's job is all about." And that was after his moving tribute to his wife's work as a teacher - which is, after all, a government-funded job.

And just two weeks ago Joe Biden told [2] some older voters in a Virginia diner that he could "flat guarantee" there would be no changes to Social Security if he and the President were re-elected.

So why did the President, former President Clinton, and Vice President Joe Biden all name-check Simpson-Bowles last week?

The Inkblot

You'll have to ask them. But maybe the plan has become a kind of political Rorschach test, a shapeless inkblot meant to conjure up "reasonableness."

There is a slightly fluid element to the otherwise far-right proposals made by two individuals, Alan Simpson and Erskine Bowles, after their commission ended in deadlock and failure. (You wouldn't know it by reading their document, but the commission never issued a report).

The Simpson/Bowles proposal does, for example, say this: "Don’t disrupt the fragile economic recovery. We need a comprehensive plan now to reduce the debt over the long term. But budget cuts should start gradually so they don’t interfere with the ongoing economic recovery. Growth is essential to restoring fiscal strength and balance."

It also says: "Protect the truly disadvantaged. We must ensure that our nation has a robust, affordable, fair, and sustainable safety net."

And the proposal also reiterates the need for additional tax revenue - even though it would do so through some unspecified "loophole closing" sleight of hand that would almost certainly hit the middle class much harder than it would wealthy Americans. Under Simpson/Bowles, billionaires would see their already rock-bottom tax rates (35 percent, compared with 91 percent under Dwight Eisenhower) reduced even further to 27 percent.

(Another Simpson/Bowles scenario would eliminate the even lower rate on "hedge fund" management fees and capital gains - but in return it would lower the top tax rate to 23 percent!)

The Problem

Contrary to what the Circle would have you believe, only one issue is driving our government's long-term deficit problem, and it isn't Social Security: It's Medicare. Unfortunately, fixing that problem would require a complete overhaul of our profit-driven health care system.

Simpson and Bowles basically throw their hands in the air. Their plan's hodge-podge of suggestions implicitly says "we have no idea what to do about Medicare." Instead, in what looks like the policy equivalent of throwing an entire deck of cards on the floor and saying "pick one," they toss out a grab bag of unrelated ideas.

One of those ideas is "an all-payer system," where government (or insurers, acting together) would establish uniform reimbursement rates for all medical providers. That's an ace in the deck, and the Democrats should grab it. While they're at it, if they're serious about deficit reduction they should go one step further and come up with an even more effective cost-cutting proposal: Revive the public option they traded away during dealings over the health care bill.

In the end, the guaranteed solution to our Medicare cost problem—which is our deficit problem—is "Medicare For All." But we're told that this approach isn't "politically feasible." It would certainly take "courage," which may be why we haven't heard Alan Simpson, Erskine Bowles, or the editors of the Washington Post pushing for it.

Guess they have "an aversion to telling the truth."

The Race

Did the Democrats embrace their opponents' platform when they embraced "Simpson-Bowles," which they misleadingly presented as the work of a "bipartisan commission"? Were they playing some sort of deep game, counting on their opponents to be intransigent so they can appear reasonable?

Or were they making the decision to run on a platform of benefit cuts to Social Security and Medicare? That would be political suicide, and a grim harbinger of things to come under a second Obama term.

If that's the case then voters, especially Democratic ones, have an opportunity and an obligation: They should inundate the White House with phone calls and emails asking the Democrats to declare their unequivocal support for the Democratic portions of their convention and pre-convention speeches: Job creation, "fair share" taxation for millionaires and billionaires, and defending Social Security and Medicare benefits from that small circle who will go to any lengths to cut them.

But the race is on, and the finish line is within sight. If voters are going to persuade the White House to make a course correction, they'd better do it soon. One thing is clear: If Democrats don't do a better job distinguishing themselves from the GOP than they did in 2010, they'll get the same outcome.

Obama isn't enjoying that bump because a few people mentioned a "Simpson-Bowles" plan. The bump came from talk about jobs, protecting Social Security and Medicare, and asking millionaires to pay their fair share. Call it what you want, but the right economic plan is also a winning political platform.

But the Simpson-Bowles plan, even if it's presented as "Austerity Lite," will hurt the Democrats. And it will spell disaster for people who depend on Social Security or Medicare, people who need a job, or ... well, for pretty much everyone. American voters want these programs protected. They've rejected the austerity economics that's currently wounding Europe. And they appreciate it when someone represents their interests.

The party that speaks for these voters will find better rewards than anyone else can offer - even the billionaire-funded insiders who make up the Circle and want to leave the rest of us in a hole.