Oldspeak: “The tried and true Problem Reaction Solution method is being used to attempt to manufacture consent for austerity measures favored only by the fabulously wealthy. The problem is the across the board government spending cuts soon to take effect and the major political parties inability to compromise to avoid them. The reaction courtesy of corporate controlled media broadcasting certain doom is a panicked populace, fearful of job losses, insecurity and instability in their daily lives. The solution is cutting spending on social programs, public services and the military while preserving tax breaks for wealthy individuals and corporations that pay negative tax rates. We are told that entitlements are the biggest drivers of our deficits (when in fact social security is solvent, and medicaid/aid has been shown to be less costly that privatized heath care) The reality is deficits are being driven by massive waste, fraud in government and the private sector, particularly banking & the many trillions of taxpayer dollars dollars being printed by Federal Reserve and shipped to banksters, foreign and domestic to keep up the illusion of a functioning financial system. The oligarchy that pay our government are controlling the range of “the sequester” debate. It’s just as The Oracle Dr. Chomsky said : “The smart way to keep people passive and obedient is to strictly limit the spectrum of acceptable opinion, but allow a very lively debate within that spectrum“.
By Amy Goodman @ Democracy Now:
AARON MATÉ: We begin with the Capitol Hill showdown over the $85 billion across-the-board budget cuts taking effect this Friday. The White House and analysts fear the so-called “sequester” could jeopardize hundreds of thousands of jobs. While Republicans and Democrats largely agree the cuts are ill-advised, they are far from reaching any sort of agreement. President Obama wants Republicans to end tax breaks, mostly for the wealthy; Republicans are insisting government spending be cut first. This is House Speaker John Boehner.
SPEAKER JOHN BOEHNER: The president says we have to have another tax increase in order to avoid the sequester. Well, Mr. President, you got your tax increase. It’s time to cut spending here in Washington. Instead of using our military men and women as campaign props, if the president was serious, he’d sit down with Harry Reid and begin to address our problems. The House has acted twice. We shouldn’t have to act a third time before the Senate begins to do their work.
AMY GOODMAN: Today President Obama plans to travel to a major military community in Newport News, Virginia, to highlight the impact of Pentagon cuts on a shipbuilding facility. On Monday, Obama urged a gathering of governors to push Congress into action to avert the looming sequester showdown.
PRESIDENT BARACK OBAMA: Now, these impacts will not all be felt on day one, but rest assured, the uncertainty is already having an effect. Companies are preparing layoff notices. Families are preparing to cut back on expenses. And the longer these cuts are in place, the bigger the impact will become. So, while you are in town, I hope that you speak with your congressional delegation and remind them, in no uncertain terms, exactly what is at stake and exactly who is at risk, because here’s the thing: These cuts do not have to happen. Congress can turn them off any time with just a little bit of compromise.
AMY GOODMAN: Well, joining us now are two guests who have uncovered how billionaire investors such as Pete Peterson have helped reshape the national debate on economy, the debt and social spending. Between 2007 and 2011, Peterson personally contributed nearly $500 million to his Peter G. Peterson Foundation to push for Congress to cut Social Security, Medicare and Medicaid, while providing tax breaks for corporations and the wealthy. Peterson served as secretary of commerce under Richard Nixon and went on to serve as chair and CEO of Lehman Brothers. He co-founded the private equity firm The Blackstone Group.
Joining us from Madison, Wisconsin, is John Nichols, The Nation magazine’s political correspondent. His latest piece is “The Austerity Agenda: An Electoral Loser.” It’s part of a major exposé based on a new website called “Pete Peterson Pyramid.” Lisa Graves of the Center for Media and Democracy is editor of the site, which links billionaires like Peterson to the Campaign to Fix the Debt.
We welcome you both to Democracy Now! John Nichols, why don’t you lay out who Pete Peterson is and how he fits into this picture of sequester that we look like we’re about to see by the end of the week?
JOHN NICHOLS: Sure. Pete Peterson is an old-school moderate Republican. He’s not some sort of hard-line conservative. He’s a very expensive suit, private jet, mineral water kind of guy. And he has been obsessed, for a number of years, with restructuring the U.S. economy, and particularly restructuring U.S. fiscal policy. This is an important thing to understand. Pete Peterson and the people around him do not want—or aren’t, I would suggest, particularly interested in fixing the debt or dealing with deficits. What they’re really interested in is taking advantage of a moment when the United States is looking at these issues to establish a very different approach to a host of issues. And at the core of this is changing the way that we look at retirement in this country, definitely undermining Social Security, Medicare and Medicaid, changing those earned benefit programs into something very different than what they’ve been and something far less reliable, but also making an awfully lot of other cuts in programs that serve the great mass of Americans, while at the same time continuing and even advancing the tax breaks for billionaires and corporations that have helped to make Pete Peterson a very, very wealthy man.
He sold this idea to around 125 other CEOs and very wealthy people. They’ve all chipped in a whole bunch of money, millions and millions, perhaps as much as $60 million for the current campaign, to this “Fix the Debt” group. And this Fix the Debt group is the primary proponent in the United States today of austerity. They want to, quote-unquote, “cut our way to progress,” as President Obama suggested, but in reality, it’s cutting the way toward progress for them and cutting the way toward a real hard hit for the average working American and potentially a slowing of the economy that begins with the sequester but does not end there.
AARON MATÉ: Well, let’s turn to Pete Peterson in his own words. This is from a video posted on the YouTube page of his foundation.
PETE PETERSON: We live in a society of special interests of various kinds. The organizations that are lobbying for expanding benefits and making the problems worse are unbelievably powerful. But who’s representing you? And why don’t you then get organized in young organizations? And I’ve had a dream. And my little dream is that one day there’d be 100,000 young people and their parents parading in Washington, saying, “I’m madder than hell, and I don’t intend to take it anymore.”
AARON MATÉ: That’s billionaire Pete Peterson talking about his dream of a revolt in favor of austerity. Lisa Graves, you’ve come up with the Peterson Pyramid.
LISA GRAVES: That’s right. We—our team at the Center for Media and Democracy has worked hard to expose the conflicts of interest by a number of the people who are leaders of the Fix the Debt operation. When Pete Peterson talks about the bevy of special interests in Washington, he’s one of them, and he has helped—he’s helped seed an organization that’s filled with special interests. And so, what we’ve done at PetersonPyramid.org is document that. So we talk about how Erskine Bowles, who’s famous for the Bowles-Simpson plan, which is the—another version of the austerity plan, how he’s on the board of Morgan Stanley and gets paid over $300,000 a year for a couple hours of work on that board, how he’s been paid over $600,000 on the board of Facebook, which recently had a huge tax giveaway. And so, that’s just one example that’s the tip of the iceberg, and we document it on our site because the people of the United States need to know that this is sort of a Pied Piper operation by Pete Peterson and his buddies to try to claim that the real crisis is the debt, when in fact the real crisis is our economy and the lack of focus on jobs. And as Dean Baker, the great economist, said, you can’t cut your way to prosperity. And, in fact, it’s like saying, when a house is on fire, stop putting so much water on the fire to put it out.
AMY GOODMAN: Tell us more about who Pete Peterson is, Lisa Graves. And also, have they responded? Has he or his organization responded to Peterson’s Pyramid, what you have just laid out?
LISA GRAVES: Well, I think Pete Peterson has an unhealthy obsession with Social Security—and, you know, as a man who’s never actually going to really need it. But most Americans in fact do need Social Security. One of the things you see with the Pete Peterson organizations that he has seeded or created over time is this obsession with Social Security. In fact, Social Security is solvent. It’s solvent for at least the next 20 years. It’s more solvent than you or I or probably anyone who’s watching this show. And yet they want to make sure that cuts to Social Security, changes to Social Security, the retirement age and the benefits, having those decrease over time as people age, is part of a so-called balanced deal or a package. That’s a terrible idea. And that’s part of the Pete Peterson legacy.
He’s also seeding these groups to have this sort of youth group element to it, which is really—it would be funny if it weren’t so worrisome, where they have put a lot of money into this notion that the youth of America are having this uprising, the dream that he said in that video, when in fact most American students are deeply concerned about the jobs in this country. And cutting our—cutting our government budget in the ways that Peterson and his buddies propose will make that job climate even worse for those students. Those students are far more concerned about their own personal debt and student loans than the debt that is supposedly being levied on them by Social Security, which does not actually contribute to the debt.
AMY GOODMAN: Has Peterson responded, Lisa, to Peterson’s Pyramid?
LISA GRAVES: Fix the Debt’s communications director has responded. He called our office to claim that their organization never claimed that they were trying to raise $60 million, he said. Their vice president of communications said that they were trying to raise any amount, not just $60 million. I pointed out we had it on their letterhead, in fact, that they were marking out a campaign worth $60 million to push these issues this year. He basically said that wasn’t true. We’ve got it on paper. You know, I said, you know, that’s why we don’t really quote the press secretaries, because they’re not obligated to tell the truth. We’ve got the documentary evidence.
And so, they pushed back a little, but, quite frankly, we have them—we have the goods on them. And that’s why this material is just streaming through the Internet, to show these conflicts of interest; to show the Democrats who are former members of Congress who have left and cashed out and work as lobbyists for some of these big firms; to show the Republicans that continue to do the bidding of some of the big firms that they’ve joined since leaving office; to show the conflicts of some of these huge firms that are part of Fix the Debt who have a negative tax rate—who have a negative tax rate—not 35 percent like you or me, not 20 percent, not 10 percent, not 5 percent, but a negative tax rate. And on top of that—
AMY GOODMAN: Like which ones?
LISA GRAVES: —we show how many of these firms are underfunding their pension programs.
AMY GOODMAN: Like which ones?
LISA GRAVES: Oh, sure. So we have documented how General Electric is one of those firms that has had a negative—a negative tax rate. A number of the firms that are part of the Fix the Debt operation have negative tax rates. We’ve got about a dozen of them that we document on the site, including, you know, major defense contractor General Electric. We have other firms that, we have documented, are underfunding their pension programs. And we also show how much they’re—how well they’re funding their CEO pensions, while underfunding their worker pensions, and pushing this operation of Fix the Debt, which is trying to underfund every other Americans retirement, basically, pension programs through Social Security.
AMY GOODMAN: Isn’t the head of GE President Obama’s job czar?
LISA GRAVES: Yes, that is in fact the case. And so, you know, we do think that this is a huge, important part of this exposé, is to show how this bipartisan—this bipartisan pitch from these guys, from these CEOs, and from Democrats and Republicans, is unfortunately not a grand bargain, but really a grand swindle.
AARON MATÉ: Well, Lisa, speaking of bipartisan, of course, we had the Simpson-Bowles Commission. In December, former Wyoming Senator Alan Simpson went on The Daily Show with Jon Stewart to discuss his budget proposal.
SEN. ALAN SIMPSON: Our corporate tax rate is the highest in the world. And so—
JON STEWART: But not actually.
SEN. ALAN SIMPSON: Well, 36 percent is where we’re at. What we did, we took away all of these tax expenditures, all of these deductions, all of this stuff. This is just earmarks by any other name, and it’s spending by any name, and it’s at one trillion one hundred billion bucks a year. And only 20 percent of the American people use 80 percent of the stuff in that tax code. Does that give you the wake-up call of who’s gimme-ing the system?
JON STEWART: Right.
SEN. ALAN SIMPSON: OK.
JON STEWART: But see, that brings up an interesting point.
SEN. ALAN SIMPSON: And so we got rid of all of that—
JON STEWART: Yeah, mm-hmm.
SEN. ALAN SIMPSON: —and we say now give the American people from zero to 70 grand, they pay 8 percent; from 70 grand to $210,000, they pay 14; anything over that, 23. Take the corporate rate to 26 from 36 and not tax them twice when they bring it back. And when they bring it back, the Democrats, as Erskine says, a Democrat, the Democrats will say, “Well, they’ll just use it for dividends and to buy stock.” And he said, “Well, hell, at least they’ll be using it in the United States of America instead of sticking it over there and leaving it.”
AARON MATÉ: That was former Senator Alan Simpson of the Simpson-Bowles Commission speaking on The Daily Show in December. John Nichols, if you could talk about Alan Simpson and the Simpson-Bowles Commission and how they fit into this Campaign to Fix the Debt.
JOHN NICHOLS: Sure. I think the best way for folks to understand the Simpson-Bowles Commission is that it is a classic example of how, if you have wealthy people behind you, you can fail miserably and still continue to be at the center of the debate. The Simpson-Bowles Commission was established by President Obama with the purpose of coming up with some debt and deficit solution ideas. I think it was a bad idea from the start, and I think it was an example of President Obama bowing to arguments of the austerity caucus, if you will, in Washington, which includes both Democrats and Republicans.
But they were put in charge of this. They came up with a plan. It was such an unpopular and unappealing plan that the commission itself did not recommend its report. Only Simpson and Bowles came out with their proposal. Then they tried to peddle it in Congress. They could only find 38 members of the House who would actually vote for their ideas. Then they went out into the November elections. They actually started endorsing candidates. The candidates that Simpson and Bowles endorsed, not only did they lose, but often you could tie the defeats of the candidates they endorsed to the fact that they were linked to Simpson and Bowles. So, if you want to see an example of two figures in American politics, career political types, who have been absolutely rejected by the American people, it’s Simpson and Bowles. And yet, interestingly enough, they’re back at the center of the debate, getting huge amounts of media coverage now. And one of the reasons for it is they’re tied to Fix the Debt.
When Fix the Debt was launched last summer, it wasn’t launched at a kitchen table of some working family or in an abandoned factory; it was launched in Sun Valley, Idaho, at a retreat for CEOs and billionaires. And Simpson and Bowles said, “We’re going to go out and launch a grassroots campaign to get the American people to force Congress to act on the ideas that we’ve put forward,” which are an American austerity agenda. And they said they were going to get 10 million signatures on petitions to do this. Amazingly enough, for this big grassroots campaign, all this millions and millions in spending, they still only got about 300,000 signatures. And most of those signatures appear to be tied to either bought lists or people who work for companies allied with the Fix the Debt operation. So the bottom line is, Simpson and Bowles are arguing for austerity and being held up by much of the media as legitimate players, when in fact they are advocating for zombie ideas, ideas that have been slain by the voters and, frankly, even by Congress, and yet they walk among us.
AMY GOODMAN: Let’s go to another clip, this one uploaded to YouTube by a new group called “The Can Kicks Back.” It features Alan Simpson addressing, quote, “the youth.”
SEN. ALAN SIMPSON: Stop Instagraming your breakfast and tweeting your first-world problems and getting on YouTube so you can see “Gangnam Style.” And start using those precious social media skills and go out and sign people up on this, baby. Three people a week. Let it grow. And don’t forget: Take part or get taken apart. Boy, these old coots will clean out the Treasury before you get there.
AMY GOODMAN: That was Alan Simpson of the Simpson-Bowles Commission. Lisa Graves, what is this Can Kicks Back group?
LISA GRAVES: Well, it’s interesting. Simpson has talked about the Can Kicks Back as if it was some sort of grassroots operation that emerged on college campuses nationwide. In fact, it operates out of the Fix the Debt offices in Washington, and it is another arm of their operation. Internally, in essence, they call it the “millennial” part of their operation. This is a well-funded, very slick, glossy campaign with T-shirts and videos, featuring people like Simpson and others, claiming that your grandparents are ruining your future. It’s quite an audacious set of claims by these guys, especially when Social Security actually isn’t contributing to the debt currently and could easily be fixed 20 years from now by cutting out the loophole for all—for Social Security taxes on income above $110,000. And so, it’s quite a scam. It’s a gimmick. It’s part of the gimmick of their campaign. And it’s something that I think people ought to be very wary of.
AARON MATÉ: And quickly, John Nichols, the cuts are supposed to take effect on Friday. Their potential effect on working people?
JOHN NICHOLS: Their potential effect on working people is severe. First off, there are the direct effects. You have an across-the-board austerity cut in federal programs, and that will have service impacts right away, things like flying, just traveling in this country. Also, there are very credible estimates that this will lead to at a base line of 700,000 job losses. And so we’re talking, over the coming months, if this sequester goes forward, of a significant slowing of the U.S. economy.
This is classic austerity: cuts at a time when the economy is weak, followed by job losses. And the tragedy of it, the really significant thing to be conscious of, is that Simpson and Bowles and Fix the Debt are waiting on the sidelines here to jump in and say, “Well, this is so disorderly. You know, we don’t want to have across-the-board cuts.” And what they are really arguing for is a systematized austerity, one where you have very, very wealthy people deciding what sort of fixes we will have for our economy. And at the end of the day, invariably, the fix will be to lower their tax rates while at the same time taking deep cuts out of the earned benefit programs that Americans desperately need.
AMY GOODMAN: We’re going to leave it there, but we’re going to continue to follow this, of course. John Nichols, political writer for The Nation; his latest piece for The Nation is “The Austerity Agenda: An Electoral Loser.” And thanks to Lisa Graves, executive director of the Center for Media and Democracy and editor of “Pete Peterson Pyramid,” a new website that connects the dots between billionaire Pete Peterson and the Campaign to Fix the Debt campaign. The website is PetersonPyramid.org.