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Beating Back the CEO Attack on Social Security and Medicare

Monday, 06 August 2012 09:53 By Dean Baker, Truthout | News Analysis
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Last week, I wrote about the conspiracy of corporate chieftains to impose a budget plan involving large cuts to Social Security and Medicare, regardless of who wins the elections in November. According to veteran Washington Post columnist Steven Pearlstein, who wrote approvingly of these efforts, many of the top executives of the country's biggest companies are meeting behind closed doors to design such a budget plan.

This plan is expected to follow the designs of the plan crafted two years ago by Morgan Stanley Director Erskine Bowles and former Sen. Alan Simpson, the co-directors of President Obama's deficit commission. The Bowles-Simpson plan called for a reduction in the annual cost of living adjustment for Social Security that is equivalent to a 3 percent cut in benefits. It also called for gradually raising the normal retirement age to 69 and phasing in lower benefits for workers who earned more than $40,000 a year. The Bowles-Simpson plan would also raise the age of eligibility for Medicare to 67.

Pearlstein indicated that these corporate honchos were prepared to spend hundreds of millions of dollars to get their plan put into law. He put the necessary figure at $278 million. This target is made easier by virtue of the fact that the CEOs sit on trillions of dollars of corporate revenue and, thanks to the Supreme Court, all their contributions for this effort will be fully tax deductible.

That's the state of play, at least according to Pearlstein's assessment, or my interpretation of his assessment. The question is whether this juggernaut can be stopped.

Well, if it were a straight question of where the money lies, the answer is clearly no. The CEOs seeking to cut back or dismantle Social Security and Medicare can probably outspend the defenders of these programs ten to one. However, there is still the simple fact that the voters overwhelmingly support these programs.

This is a result reported by every poll every conducted on these issues. Both Social Security and Medicare enjoy extremely high approval ratings across the political spectrum. There is almost nothing that unites the public as much as support for these programs. Well over 70 percent of Republicans, Democrats and Independents indicate strong support for Social Security and Medicare.

The same holds by ideology. There is little difference between people who call themselves liberals and conservatives; both groups overwhelmingly support Social Security and Medicare and are opposed to cuts in these programs. Even self-described supporters of the Tea Party overwhelmingly support Social Security and Medicare.

The question is how to make it so that popular sentiment overrides the big bucks of the corporate chieftains. The obvious answer would be to make the protection of these programs central issues in the election. Members of Congress and candidates for seats should be pressed to indicate where they stand on the proposed cuts to these programs.

That means getting them to answer specific questions, like whether they support reducing the annual cost of living adjustment or raising the normal retirement age for Social Security or the age of eligibility for Medicare. These are among the most important issues in people's lives and voters should not have to go to the polls not knowing where the candidates for the House, the Senate or the presidency stand on them.

People should also be aware that politicians are true masters of evasion on these questions. A response like, "I support Social Security and Medicare," should be taken to mean that they are prepared to support cuts for these programs. All of the people running for office are smart enough to know how to say that they oppose the cuts being put on the table and they undoubtedly would say that they oppose the cuts, if it were true.

Similarly, a statement like, "I oppose the privatization of Social Security and Medicare" should also be taken to mean that they are prepared to support cuts to these programs. Again, they are not being asked about privatization; it's not immediately on the table. So, why would they give an answer about privatization except to avoid admitting their support for cuts?

The news media should also be pressed into service in this effort. It is their job to tell us the candidates' positions on important issues and there are few issues more important to voters than Social Security and Medicare. People should harangue their local newspapers and television stations to ask candidates their positions on cuts to these programs. This is far more important than most of the gossip about the campaigns that dominates news coverage.

The whole effort here must be focused on smoking out politicians on where they stand on cuts to Social Security and Medicare. The CEOs want to do this behind closed doors because they know that politicians who have to answer to their constituencies will never be able to get away with these cuts. The key is to force the debate into the sunlight.

Copyright, Truthout. May not be reprinted without permission of the author.

Dean Baker

Dean Baker is a macroeconomist and co-director of the Center for Economic and Policy Research in Washington, DC. He previously worked as a senior economist at the Economic Policy Institute and an assistant professor at Bucknell University. He is a regular Truthout columnist and a member of Truthout's Board of Advisers.


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