Thank You, Paul Ryan

Robert Kuttner
Co-founder and co-editor, 'The American Prospect'
09/16/2012
http://www.huffingtonpost.com/robert-kuttner/thank-you-paul-ryan_b_1888870.html

Two years ago, the Democrats handed the Republicans their two crown jewels -- Social Security and Medicare. By targeting Medicare for budget "savings" that could be used to finance what the Republicans called Obamacare, the White House gave the GOP ammunition to contend that the Democrats were taking benefits away from seniors.

Expanding health coverage for the young and defense of Medicare for the elderly got depicted as a zero sum game. Republicans made huge gains in 2010 with seniors. Instead of the political winner it should have been, Obamacare became an epithet.

Then, in the aborted grand budget bargain of 2011, Obama was so eager to achieve a compromise on mostly Republican terms that he very nearly agreed to needless cuts in Social Security. Only Republican intransigence on any kind of tax hikes saved the president from himself -- or more precisely from his deficit-hawk advisers.

Now, however, Republicans have given Social Security and Medicare back to the Democrats (where they belong.) Polls show that Medicare is no longer a winner for the Republicans, and the Democrats have embraced the term, "Obamacare" as positive label.

The reason, of course, is Paul Ryan.

Thanks to Ryan's very explicit advocacy of scrapping public Medicare in favor of vouchers, seniors are returning to their natural Democratic home. The transparently bogus effort of the Romney-Ryan ticket to walk back Ryan's voucher proposal -- and alter it into a plan where seniors get to choose traditional public Medicare or vouchers -- only reinforces the voter perception of Romney as someone who keeps changing his story. The euphemism of "premium support" is fooling nobody and adds to the perception of Republican evasiveness.

The latest New York Times-CBS poll shows that some three quarters of likely voters favor keeping Medicare the way it is, and trust Obama more than the Republicans to defend it. This is a huge shift from last year.

Democrats, meanwhile, have acquired some spine. Defense of public Medicare against "vouchercare" has become part of their standard message.

So far, so good.

Also good ammunition against Romney-Ryan was Ryan's support in 2005 for a George W. Bush plan to allow younger workers to divert some of their Social Security taxes into private accounts -- a proposal that proved a political disaster and was subsequently scrapped.

But never underestimate the Democrats' capacity for snatching defeat out of the jaws of victory.

Lurking in the wings is the latest reincarnation of Bowles-Simpson, the bipartisan zombie that refuses to die. A "Fix the Debt" campaign," chaired by none other than Erskine Bowles and Alan Simpson, has become the darling of the centrist media and of Wall Street.

The Peter G. Peterson Foundation, the National Committee for a Responsible Federal Budget, several leading Democratic deficit hawks, and some 70 corporate CEOs have pledged to raise $50 to 100 million dollars in corporate money for this latest campaign, which promotes yet another a grand bargain of tax increases and cuts in Social Security and other social spending.

Bowles continues to be touted as Obama's next Treasury Secretary when Tim Geithner finally (mercifully!) calls it a day. Other Democrats who are part of this effort are former Pennsylvania Governor Ed Rendell, who was chair of the Democratic National Committee in 2000, and former Democratic Congressman Vic Fazio, who once headed the Democratic Congressional Campaign Committee.

Rounding out this group of Democrats doing Republicans' bidding on fiscal issues are former Georgia Senator Samm Nunn and Wall Streeter and former Obama official Steve Rattner.

Shame!

Bowles and Simpson were featured on NBC's Meet the Press Sunday where they were described as "widely hailed as serious thought leaders on dealing with the country's economic problems."

Hailed, that is, by the same corporate media. The mainstream media just laps this stuff up, because Simpson, a Republican, is willing to criticize the Romney-Ryan ticket and Bowles, a Wall Street Democrat, is not shy about criticizing Obama. So they must be both courageous and right. As Bowles said on Meet the Press Sunday, "We don't think President Obama has gone far enough in his reduction on entitlement spending."

But Social Security continues to be in surplus, and to lend the rest of the government money. Its projected future deficits did not cause the current economic crisis. Its reduced revenues are the result of the crisis.

Social Security is financed by payroll taxes. If median worker pay rose with productivity, instead of most of the gain in national income going to people like those on the "Fix the Debt Campaign", Social Security would be in surplus indefinitely. Social Security's modest projected shortfall can be erased by raising the ceiling on income subject to payroll tax, not by slashing benefits.

The corporate elite lives in a self-reinforcing bubble, where the deficit is the economy's most dire problem. An important study by political scientists Benjamin Page, Larry Bartels and Nathan Seawright interviewed a sample of very wealthy Americans. Not surprisingly, their views on the importance of budget balance versus job creation and social supports were far to the right of those of most voters. (Fully 87 percent of very wealthy respondents put deficit reduction as the most pressing national issue.)

This is conventional wisdom among the top one percent. Corporate CEOs of the sort who are underwriting this latest Bowles-Simpson assault don't need Social Security for their own retirement and don't mind sacrificing it on the altar of budget balance.

Back in the real world, Social Security is both good policy and good politics. As private pension plans keep being gutted and seniors interest earnings on savings accounts are basically nothing, Social Security is the one government guaranteed portion of retirement income. It is immensely popular, and to the extent Democrats are resolute in its defense, the program's popularity rubs off on them.

But because of pressure from corporate-funded groups like this one, the Obama Administration keeps coming close to buckling on the issue of traditional Democratic defense of Social Security. This will arise again as Congress gets closer to the dread "fiscal cliff," made up of expiration of the Bush tax cuts in January 2013 and the threatened budget sequester (that is the fruit of Republicans holding the government hostage in 2011.)

Given the importance of Social Security to regular Americans and its partisan value to Democrats since Franklin Roosevelt, no sane Democrat should be associated with these efforts. But in an age of Citizens United and unlimited corporate donations, where Obama tacks back and forth between criticizing Wall Street and soliciting Wall Street executives for campaign funds, it is all too tempting to demonstrate fiscal "soundness" by joining this parade.

Thanks to Paul Ryan, however, the president may be spared again. The association of Romney-Ryan with the gutting of Medicare and Social Security offers just too tempting a political target to throw away for the sake of impressing Simpson, Bowles, and their corporate cronies. Or so we must hope.

Robert Kuttner is co-editor of The American Prospect and a senior fellow at Demos. His latest book is A Presidency in Peril.