Peter G. Peterson's Insidious 30 -Year Campaign to Dismantle Social Security (Joe Rothstein's Commentary)
By Joe Rothstein
Editor, EINNEWS.com
If you watched the Republican presidential debate from New Hampshire you were treated to numerous commercials showing cute little kids telling us how to fix complicated U.S. budget problems.
These youngsters, adept in reading their prepared scripts, shared their wisdom with us courtesy of the Peter G. Peterson Foundation, which advertises itself as a non-profit, non-partisan organization dedicated to increasing "public awareness of the nature and urgency of key fiscal challenges threatening America's future and to accelerate action on them."
Here's Peterson's less puffy, but more specific goal which you will find by checking Wikipedia: "The group advocates for reductions in federal deficits and debt through redirection of Social Security funds and cuts in federal entitlement programs."
Peter G. Peterson, President Nixon's commerce secretary, has invested $1 billion of his fortune into setting up an organization dedicated to radically altering or eliminating Social Security. He kicked off that campaign in 1982 with his paper, "Social Security: The Coming Crash." Mr. Peterson has been forecasting a Social Security apocalypse for about three decades now. You have to give him points for persistence.
And the man certainly knows how to campaign.
The cute kid ads are only part of the effort. Peterson was one of the driving forces behind President George W. Bush's abortive 2005 effort to privatize Social Security. His foundation has produced and distributed a slick popular documentary, "I.O.U.S.A." You can buy "Budgetball," a game that teaches kids about "fiscal strategy." With Columbia University's Teacher's College Peterson has developed an entire curriculum, widely available to all of academia.
Peterson's "non-partisan" foundation has embedded itself so deeply into Washington's political and media culture that you can hardly avoid seeing a budget or debt discussion on any channel where an "expert" from Peterson's stable isn't reading from the Peterson playbook. Peterson is rarely identified as someone who has spent a fortune over 30 years pursuing the dismantling of Social Security.
Few question the fact that the U.S. has a serious debt problem. It's had one for most of the years since Ronald Reagan became president.
The 12-year Reagan-Bush White House from 1981 through 1992 tripled the national debt. In 1993 a Democratic Congress raised taxes to address the debt problem. Not a single Republican voted for the tax increase. What followed were many years of economic expansion widely shared by most Americans. The economy was in such good shape after eight Clinton years that Fed Chairman Alan Greenspan at the time obsessed over the potential "problem" of the U.S. being debt free and not having to borrow at all.
Two wars, an unpaid for Medicare prescription drug plan, and three sweeping rounds of tax cuts, followed by the worst economy in 70 years created the mess we're in today. Social Security had nothing to do with it.
Social Security ended 2010 with a surplus of $2.6 trillion. Projections are that surpluses will continue, reaching a peak of $3.7 trillion in 2022. The system hardly provides a lavish lifestyle for those who draw down Social Security checks. In 2010 the average monthly retirement benefit was $1,175 for an individual and $1,908 for a couple.
The reason there's any conversation at all about the future of Social Security is that the money the federal government's been collecting from workers for the "Social Security trust fund" has been used to pay for on-going expenses. Instead of real dollars in the "trust" fund, the government's been writing IOUs.
Because of the flood of baby-boomers hitting retirement age, a dip in worker contributions will have to be covered by the general federal budget. But the system itself will be solvent as is, with no changes at all, at least through 2037.
To get a real-world picture of the problem, imagine that instead of setting up Social Security as a government program, back in 1935 it was set up as a private retirement program. And imagine that for all the ensuing years we'd been making payments to The Hartford, or Prudential or some private entity. And now the private entity tells us that all those payments were spent on other things and there's not enough to cover the pensions we'd paid for.
There's a word for that. It's called "embezzlement." People go to jail for it.
But where Social Security is concerned, people like Peter G. Peterson don't look at this as a crime, or a fraud or a grievous error to be made good on. They see it as an opportunity to cripple or eliminate a program they don't like and have never liked. To be less charitable, people like Peterson, who do very well on Wall Street, see privatization of Social Security has a opportunity to divert billions---trillions---into their own private investment funds.
If they succeed in raising the eligibility age, or cutting back benefits, or making any of the other changes to the system they've been advocating, Social Security becomes less attractive and the political support behind it gets weaker. Already, many young people are convinced that it won't be there for them when they retire.
It's an insidious campaign, pushed along by many operating under the guise of non-partisan think tanks, abetted by gullible media.
When the Congressional supercommittee delivers its budget-cutting plan to Congress in mid-November we're likely to see the first real threat to Social Security since its creation. Peter G. Peterson isn't on that committee, but if cuts to Social Security are included it will be the crowning achievement of 30 years of his persistent animosity for the program.
And it will be tough nuggets for the retirees who count on Social Security to pay the bills in their senior years.
(Joe Rothstein can be contacted at joe@einnews.com)
