COMMENTARY:

Obama Team's Deficit Cutting Proposal: Benefit the Few, Harm the Many

Though total US Healthcare spending/yr is $4K per capita greater than other OECD countries—driving jobs off-shore—not one comment was given to stopping endemic fraud and price-fixing by cartels.

by Stephen Lendman
Friday, 12 November 2010
Hopefully saner voices and public outrage will kill it, sending it to history's dustbin where it belongs, along with neanderthal extremists who proposed it.

Some background. In his January 27 State of the Union address, Obama announced plans to "freeze government spending for three years," starting in 2011, saying he'd establish a bipartisan fiscal commission by executive order to cut the deficit by imposed austerity. In other words, harm the many by social spending cuts, including Social Security and Medicare, not defense, banker handouts, other corporate favorite subsidies, or the rich.

Then on February 18, a White House press release announced the commission's establishment - a "bipartisan National Commission on Fiscal Responsibility and Reform (NCFRF)," co-chaired by two deficit hawks, former Senator Alan Simpson (R. WY) and Erskine Bowles, former Clinton White House Chief of Staff, heading an 18-member team stacked with like-minded members. Their mandate: slash Medicare, Social Security and other social spending. Fiscal austerity for the many, unlimited wealth opportunities for the few, an agenda from hell.

On November 10, New York Times writer Jackie Calmes headlined, "Panel Seeks Social Security Cuts and Higher Taxes,' saying:

Obama's commission presented "a politically provocative and economically ambitious package, (igniting) a debate that is likely to grip the country for years." Among others, its proposals include:

Overall, by 2020, NCFRF proposes cutting growing deficits by about $3.8 trillion, half of the expected $7.7 trillion otherwise incurred.

At the Seoul, South Korea G-20 summit, Obama asked Democrat party leaders to hold off criticizing necessary "tough choices," adding:

"Before anybody starts shooting down proposals, we need to listen, gather up all the facts, and be straight with the American people." What, in fact, he hasn't done on all administration policies since taking office, nor is he doing now, proposing enormous harm to working Americans, while showering benefits on corporate favorites, bankers most of all. Wall Street, in fact, is spending millions of dollars promoting NCFRF's proposal.

AFL-CIO president Richard Trumka, hardly a legitimate rank and file supporter, said the proposal amounts to telling "working Americans to 'Drop Dead'. Especially in these tough economic times, it is unconscionable to be proposing cuts to the critical economic lifelines for working people, Social Security and Medicare."

Even the conservative Americans for Tax Reform expressed criticism, saying:

"It confirms what everyone has known - this commission is merely an excuse to raise net taxes on the American people," ordinary ones, that is.

If approved, in whole or in part, proposed changes will become effective in 2012. Deficit hawks want it accomplished before the 112th Congress convenes in January. Public anger is needed to stop it, a thinly veiled scheme to take from the many for the few, the administration very supportive. Rhetoric aside, coming debate will determine whether congressional Democrats concur. At this point, it's not a done deal. Clearly, however, political sentiment favors cuts on the backs of those least able to afford or contest them, ordinary people always betrayed, Obama again proving more ruthless than Bush.

The Myth of the Social Security Crisis

Ending it is ultimately planned, preceded by benefit cuts and privatization, a scheme based on bogusly claiming future insolvency if remedial action isn't taken. In fact, Social Security sound and secure, the most conservative projections showing all scheduled benefits can be paid for the next 27 years with no structural changes. Saying it's going broke is a lie. Using that excuse for Medicare is another canard. Both programs are fiscally sound if properly administered.

Even by 2100, retiree benefits will be double what current recipients get, with minor or no remedial adjustments. Media reports, however, say otherwise, calling the system in crisis when none whatever exists. For decades, it's been the single most important program keeping seniors and the disabled out of poverty. Eroding or destroying benefits will be catastrophic. That's precisely what's planned, however, Obama in tow with Wall Street, betraying the people who elected him, this among many other ways.

If ever a Social Security fix is needed, a simple solution exists. Remove the payroll tax ceiling, taxing all earned income at the same rate. Doing it will dispel insolvency arguments. Improved fairness will also result for a program designed as social insurance, not welfare, as is Medicare, both programs funded by employer/employee payroll tax deductions.

Another equitable solution is also avoided - overhauling the dysfunctional tax system, replacing it with a progressive one, making high earners pay their fair share instead of getting a free ride like today.

Robin Hood Economics

At issue, is ending all social benefits, including Social Security, Medicare and Medicaid, returning America to pre-New Deal days with everyone on their own to survive. At the same time, military budgets keep rising. Greater wealth disparity is planned, and repressive crackdowns will target resisters, both parties committed to regressive changes, no end to imperial harshness, and channeling the nation's resources unfairly, benefitting the few, not the many.

A Final Comment

Whatever National Commission on Fiscal Responsibility and Reform (NCFRF) proposals are adopted, more are coming, including from a lesser known group - the Bipartisan Policy Center (BPC) headed by former Senator Pete Domenici (R. NM) and Alice Rivlin, former Congressional Budget Office director and Clinton Director of the Office of Management and Budget.

Established in 2007 by former Senators Howard Baker (R. TN), Tom Daschle (D. SD), Bob Dole (R. KS), and George Mitchell (D. ME), it aims "to develop and promote solutions....that make sense for the nation and can be embraced by both sides of the aisle." Its focused issues include national and homeland security, financial services, transportation, and reducing the nation's deficit. Its recommended spending cuts will be proposed, complementing NCFRF's with more draconian ones, underscoring fear to get them enacted.

In a November 10 press release, BPC "appaud(ed NCFRF's) efforts....to address the nation's serious fiscal problems and hopes they can achieve the commission's support for a viable plan."

A supportive November 10 New York Times editorial also endorsed it titled, "Some Fiscal Reality," saying:

"The draft proposal by the chairmen of President Obama's deficit-reduction commission was a welcome antidote to the low-minded debate that dominated the midterm elections," offering "no credible plans."

"It lays out sensible principles....It puts everything on the table, including tax reform" and spending cuts. "At a time when good ideas are depressingly scarce in the political and economic debate, and bipartisan agreement even scarcer, this is a commendable start."

The editorial ended saying:

"We hoped the Republicans would pause long enough in their gleeful planning of President Obama's final defeat, and the Democrats would stop wringing their hands, long enough to read this important document - and then act on it."

Given decades of distorting and suppressing truth, endorsing imperial wars, supporting wealth and power, backing corporate interests, and disdaining working Americans, the Times' position is unsurprising. It also recommends a value added tax to "spur growth," hitting lower income Americans hardest if enacted.

Hopefully saner voices and public outrage will kill it, sending it to history's dustbin where it belongs, along with neanderthal extremists who proposed it.


Stephen Lendman

Stephen Lendman lives in Chicago and can be reached at lendmanstephen@sbcglobal.net. His blog is sjlendman.blogspot.com.

Listen to Lendman's cutting-edge discussions with distinguished guests on the Progressive Radio News Hour on the Progressive Radio Network Thursdays at 10AM US Central time and Saturdays and Sundays at noon. All programs are archived for easy listening.

Mr. Lendman's stories are republished in the Baltimore Chronicle with permission of the author.



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This story was published on November 12, 2010.