COMMENTARY:

Pete Peterson’s Anti-Entitlement Juggernaut

When Obama’s new deficit commission gets going, it intends to be “partnering“–in the words of executive director Bruce Reed –with outside groups. Among them will be the foundation run by Wall Street billionaire Peter G. Peterson, who on Wednesday will upstage the president with his own fiscal summit in Washington. Obama insists he is keeping an open mind about how to deal with the deficit and national debt–but as I’ve written before, he’s already stacked his own commission with people who lean heavily toward one particular solution: cutting entitlements. And now he is working hand-in-glove with a wealthy private organization whose central purpose is to cut Social Security and Medicare. Talk about foregone conclusions.

Peterson, according to Forbes, was the 149^th richest man in America last year, with $2.8 billion in assets. During his long career he has been, among other things, CEO of Bell & Howell, head of Lehman Brothers, a co-founder of the Blackstone Group, and head of the Council on Foreign Relations. He was Nixon’s Secretary of Commerce, and in 1994 served on a Clinton bipartisan commission on entitlements and tax reform. He launched his own Peter G. Peterson Foundation with a grant of $1 billion.

Pete Peterson: Beating a Dead Horse

A fiscal conservative, Peterson has long been issuing dire warnings about the the nation’s skyrocketing debt. The key cause of the problem, in his analysis, is that entitlement programs–primarily Social Security and Medicare, but Medicaid as well–are out of control; the only solution is to cut them. Peterson is the self-appointed head of what some people have begun to call the “granny bashers,” who argue that greedy geezers are ruining the lives of younger generations with their unconscionable demands for basic healthcare and a hedge against destitution. (Peterson himself is in his eighties–but of course he’s too rich to worry about such things.)

The granny bashers’ real agenda, of course, is to cut the social safety net programs that they have long abhorred–but they have gained far more ground with their intergenerational inequity claims than they ever would with a straight-out attack on Social Security and Medicare. The majority of the Washington punditry seem to have fallen for it–and so too, apparently, has the White House. A year ago in Newsweek, Peterson wrote:

For the first time in my memory, the majority of the American people join me in believing that, on our current course, our children will not do as well as we have. For years, I have been saying that the American government, and America itself, has to change its spending and borrowing policies: the tens of trillions of dollars in unfunded entitlements and promises, the dangerous dependence on foreign capital, our pitiful level of savings, the metastasizing health-care costs, our energy gluttony. These structural deficits are unsustainable. Herb Stein, who served alongside me in the Nixon White House as chairman of the Council of Economic Advisers, once drily observed, “If your horse dies, I suggest you dismount.” And yet, we keep trying to ride this horse.

In June, according to the Washington Post, Obama’s deficit commission will be participating in a 20-city electronic town hall meeting, put together by an organization called America Speaks. It is financed by Peterson, along with the MacArthur Foundation and Kellogg Foundation. This is a truly unusual event because it marks the first time a presidential commission’s activities are financed by a private group that has long been lobbying the government on the very subjects the commission is supposed to “study.”

The Peterson summit is crammed with luminaries in finance and government. First there’s the keynoter, Bill Clinton. Then there’s Alan Greenspan, the Federal Reserve chairman widely credited with getting us into our current economic mess, and Paul Volcker, his conservative predecessor at the Fed. Robert Rubin, Clinton’s secretary of the Treasury, and another pillar of the current economic debacle, will speak. So will Republican Congressman Paul Ryan, a leading GOP guru, who among other things wants to replace Medicare with a system of vouchers and tax breaks. Judd Gregg, the senior and probably most important conservative senator when it comes to finance, will be featured as well; he is a keen proponent of Peterson’s entitlement cuts.

The heavy hitters are all to be interviewed by big names in mainstream media: ABC’s George Stephanopolous will question his old boss Clinton; Leslie Stahl will speak with presidential commission co-chair Erskine Bowles, one of Clinton’s a White House chiefs of staff. Ranked below the big guys are a slew of lesser lights including some liberals like Lawrence Mischel of the Economic Policy Institute, Robert Greenstein of the Center for Budget and Policy Priorities, John Podesta of the Center for American Progress (and another former Clinton chief of staff), and former Congressional Budget Office head Alice Rivlin.

All-in-all, it seems to be dominated by Clinton-era officials, who oversaw much of the Wall Street deregulation that nearly drove the country broke. These are the people who will now try to make up the losses on the backs of the poor and the old by rewriting the hard-won entitlement programs created during the New Deal and the War on Poverty.

Meanwhile Obama–who seems to have learned nothing about strategy from the health care wars–will not say what he thinks about any of it. Instead, he prefers to sit on the sidelines and see what these people come up with–as if that horse wasn’t already out of the barn.