How much can a billion dollars buy? The undivided attention of America’s entire political and chattering classes. Case in point: our ongoing national fixation on debt and deficit.
Down through the millennia, single individuals have changed the course of history, some through their intellect, some through their courage, and still others through the depth and breadth of their vision.
But you don’t have to have smarts or courage or vision to change history. You just need a ton of money, the sort of fortune that the 86-year-old Peter Peterson has amassed over his years wheeling and dealing on Wall Street.
Peterson has been obsessing for years over federal budget deficits. Now his obsession has shoved the nation to a “fiscal cliff” that might well end up raising the age that Medicare kicks in and chopping billions out of all sorts of other programs near and dear to the hearts of America’s working families.
These cutbacks make no sense. The current federal budget deficit directly reflects the bursting of the housing bubble five years ago and the resulting Great Recession. Put people back to work and end that recession, progressive economists note, and that deficit would quickly start shrinking.
These progressive economists, unfortunately, don’t have hundreds of millions of spare dollars to make their case to the American public. Pete Peterson does.
Five years ago, Peterson sold the bulk of his stake in the Blackstone private equity firm he co-founded 22 years earlier. That sale, in just one day of trading, added $1.8 billion to Peterson’s already ample personal fortune.
A year later, with a $1 billion outlay from that fortune, Peterson established the Peter G. Peterson Foundation to target “undeniable, unsustainable, and untouchable” threats to America’s fiscal future and began a massive lobbying blitz for a “bipartisan” solution to federal debt and deficit.
Peterson’s foundation almost immediately began dispensing millions from its imposing stash of cash, funding everything from a classroom curriculum to a film documentary and a “fiscal wake-up tour.” Other millions, a National Journal analysis points out, went to think tanks across the political spectrum.
Three years ago, Peterson dollars helped fund the high-profile national Simpson-Bowles Commission, a “bipartisan” maneuver to pitch cutbacks in social spending as an essential ingredient in any “responsible” approach to deficit reduction.
That commission would prove unable to reach a budget-fixing consensus. No problem. Peterson dollars were soon funding a new public relations campaign that enabled the commission co-chairs, former GOP senator Alan Simpson and former Clinton chief of staff Erskine Bowles, to barnstorm the nation.
This campaign, in turn, eventually morphed into “Fix the Debt,” a more tightly organized effort to resurrect the “core principles” that Pete Peterson holds near and dear. Among them: the need for “pro-growth tax reform” that “broadens the base, lowers rates, raises revenues, and reduces the deficit.”
Translation: Let’s shift tax burdens off the rich and onto average Americans.
Fix the Debt has overshadowed the various other Peterson-funded lobbying efforts, mainly because the new group’s “fiscal leadership council” includes a who’s who of America’s corporate and banking superstars, everyone from Goldman Sachs CEO Lloyd Blankfein to Microsoft chief Steve Ballmer.
These Fix the Debt CEOs have been jetting in and out of Washington, pushing their case with lawmakers and White House officials. They’re hoping for better luck with officialdom than they’ve had so far with the American people.
Average Americans have largely tuned out Fix the Debt. One sign of the times: The Fix the Debt conline petition backing the nostrums of Simpson-Bowles “as a starting point for a plan to reduce the federal debt” had just 300,000 signatures as of last week. The original Fix the Debt petition goal: 10 million signatures.
No matter. Even without generating anything close to a public groundswell, Peterson’s agenda remains alive and well on Capitol Hill. Peterson, of course, doesn’t personally deserve all the credit. His basic budget agenda — keep federal spending down — has always resonated powerfully with America’s most affluent.
The main reason: the lower the federal investment in programs that help working families, the less the pressure for raising taxes on America’s rich to help finance that investment.
America’s rich and powerful can’t seem to get enough of the Fix the Debt “fiscal responsibility” message. Business groups, reports the New York Times, are now paying Alan Simpson and Erskine Bowles $40,000 a pop — each — for speechifying at their conferences and confabs.
Will Peterson and friends emerge the winners when the “fiscal cliff” dust finally settles? In a sense, these deep pockets already have prevailed. Congress could — and should — be debating how best to put America back to work. Lawmakers are instead debating how much to cut the federal help for average Americans that our rich don’t want to pay the taxes to support.
The rich have, in effect, framed our political debate. In plutocracies, they always do. A century ago, Americans understood that reality. Their response? They made plutocracy itself their target. Someday soon, we’ll need to follow suit.
Labor journalist Sam Pizzigati, an Institute for Policy Studies associate fellow, writes widely about inequality. His latest book, The Rich Don’t Always Win: The Forgotten Triumph over Plutocracy that Created the American Middle Class, has just been published.