Grand Bargain or Raw Deal?

Many elderly Americans are close enough to poverty’s edge that Social Security cuts of any size could push them over the brink.

— By Peter Hart

Peter Hart

Following the government shutdown drama, politicians in Washington appear hopelessly divided, according to conventional wisdom.

Fair enough. But there’s at least one area where many politicians from both of the major parties agree — and many of the TV talking heads and newspaper pontificators are with them, too. Social Security, they insist, “needs” to be cut.

For the last few years, after a major standoff, the usual Beltway pundits have been talking about something they like to call the “grand bargain.”

That sure sounds like a good thing. Who doesn’t love a bargain? Well, here’s the question you should ask yourself: Who’s actually getting one? It’s more likely than not that the savings aren’t headed your way.

Fixing Social Security, an OtherWords cartoon by Khalil Bendib

In Washington-speak, a “grand bargain” means some kind of budget deal where everyone is forced to give a little in order to reduce the budget deficit and tackle the country’s debt. To get Republicans to agree to raise more revenue (i.e., taxes), Democrats have to agree to some spending cuts.

As with most things, the devil’s in the details. There’s essentially unanimous Republican opposition to raising taxes on the wealthy. That makes authentic bargaining tough. And on the other side, the cuts are intended for programs like Medicare and Social Security, key elements of the safety net and perhaps the most popular government spending programs.

Medicare and Social Security are remarkably successful in helping keep seniors and others in need out of poverty. But “households relying on (Social Security) for a significant share of their income often live dangerously close to the poverty line,” according to the Economic Policy Institute. That means cuts of any kind could jeopardize their living standards.

Pundits and journalists cheer this talk of a “bargain,” and they praise politicians — especially Democrats — who have the “courage” to back such cuts.

For the past few decades, politicians and pundits have ginned up a “crisis” over Social Security’s finances. At this point, you can say almost anything about Social Security and get away with it.

Right now, yet another wave of scare stories about Social Security has soaked the media. 60 Minutes recently did a segment about the allegedly rampant fraud in the Social Security disability system. But back in reality, disability benefits are difficult to collect, and the program is watched very closely for signs of cheating.

The Washington Post ran a big story about the problem of people collecting benefits for their deceased loved ones. Front-page news in the nation’s capital — but if you read closely, you would discover that we’re talking about 0.006 percent of the checks.

So long as the media can keep churning out this misleadingly alarmist Social Security coverage, more politicians will talk up the idea of “fixing” the program. When you hear them say this, you should know that they mean cutting benefits.

Be on the lookout: When the TV talking heads and politicians all agree that it’s time to strike a “grand bargain” to “protect” or “fix” Social Security, check the fine print. Someone’s getting a bargain, but it’s probably not you.


Peter Hart is the activism director of Fairness & Accuracy in Reporting. www.fair.orgCartoon Credit:  Fixing Social Security, an OtherWords cartoon by Khalil Bendib.   Distributed via OtherWords. (OtherWords.org)

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We’re Not Broke — We’ve Been Robbed

Slashing government spending now is just going to make our nation poorer.

By Richard Kirsch

Richard_Kirsch

With the Friday the 13th December deadline for a federal budget deal, the cries of “we’re broke,” and “we can’t afford to keep spending,” are ringing again. But we’re not broke and acting like we are is making us poorer.

One of the biggest common misunderstandings is that governments are like households, which need to tighten their spending when times are tough. Actually, governments and households work in opposite ways.

Attack of the Budget Slashers, an OtherWords cartoon by Khalil Bendib

Governments can and should spend more when times are tough. Government spending makes up for lack of spending by families and businesses, and it helps get the economy moving by getting people back to work, putting money in their pockets, and contracting with businesses.

If we needed a reminder of that, the recent government shutdown gave us one. Journalists reported story after story about how business was down, as federal workers were laid off and national parks closed. The estimates are that even though the shut down only lasted 16 days, it cost the economy $24 billion.

We need government spending and investment to get the entire economy moving forward. When families are back at work with decent wages, government tax revenues will rise and spending on social supports will fall. That’s when government can reduce spending without slowing down the economy.

During the past two years we’ve reduced the deficit by half, close to 2008 levels. That may sound like it’s a good thing, but it’s really the biggest reason the economy is so lackluster for the vast majority of Americans with a near-record-high in unemployment, stagnant wages, and a smaller proportion of Americans working than any time in the past 30 years.

We’ve also cut all the wrong things: spending that puts money in people’s pockets today and investments in our economic future. We’ve cut spending on education, unemployment insurance, environmental protection, and scientific research. Our public investment, which includes annual government programs and spending on roads, bridges, transit, research, and development is actually the lowest it’s been as a share of the economy in 60 years.

What if we’d taken a different course during the recession? How about rather than cutting spending after an initial stimulus, which avoided a second great depression by saving three million jobs, the government had kept at it?

History shows that if we have continued the levels of spending normally done after recessions, we would have spent some $800 billion more than we did, and the overall economy (and not just the stock market) would be back to the same level today that it was before the recession hit.

In short, the argument that the government must live within its means to protect our children’s future is backwards. Averting deficit spending now means starving our children’s present and their future. More parents will have to struggle to get by, fewer good jobs will be created, education will suffer, and today’s college students will stumble into their careers saddled with huge debt loads.

And our infrastructure will keep crumbling and research will dwindle, making it harder for our businesses to compete in the global marketplace.

There are ways we can reduce the deficit without slowing down the economy very much, if at all. That is by looking at the other truth about the cry that “we’re broke.” In fact, we have been robbed.

When Uncle Sam gives big corporations tax breaks to move jobs overseas, we’ve been robbed. When Washington taxes billionaires at a lower rate than their secretaries, we’ve been robbed.

To get the country moving again, Congress needs to reverse direction and increase spending on vital services and investment.

That means reversing the budget cuts on domestic spending already in place and stopping any more sequestration cuts on vital services for our families. And raising taxes on the wealthy and huge corporations, which have been gaming the system at our expense.

Instead of obsessing about the “need” to cut government spending, our leaders should be figuring out how best to stimulate the economy to provide both a better today and future for our children.


Richard Kirsch is a senior fellow at the Roosevelt Institute and the author of Fighting for Our Health: The Epic Battle to Make Health Care a Right in the United States. He’s also a senior adviser to USAction. USAction.org.  Distributed via OtherWords. OtherWords.org.  Cartoon Credit:  Attack of the Budget Slashers, an OtherWords cartoon by Khalil Bendib.

What I’ve Been Reading Lately— Monday, 3/25/2013

Lean in, Women; Corporations and Government, Brush Off Your Hands

Veena Trehan, Op-Ed: Fifty years ago, Betty Friedan’s “Feminine Mystique” explained how wives were not fulfilled by homemaking and childbearing. Woman couldn’t get credit, were fired when their pregnancy showed and held mostly assistant or teaching positions in the 1960s. We’ve come a long way. Today, women comprise 58 percent of college students, 33 percent more college graduates than men, and a strong presence in most industries. Yet, they make up only 20 percent of Congress, 4 percent of Fortune 500 companies’ CEOs, and 15 percent of senior executives.

Senate Passes Monsanto Protection Act Granting Monsanto Power Over U.S. Govt.

Anthony Gucciardi, News Report: In case you’re not familiar, the Monsanto Protection Act is the name given to what’s known as a legislative rider that was inserted into the Senate Continuing Resolution spending bill. Using the deceptive title of Farmer Assurance Provision, Sec. 735 of this bill actually grants Monsanto the immunity from federal courts pending the review of any GM crop that is thought to be dangerous. Under the section, courts would be helpless to stop Monsanto from continuing to plant GM crops that are thought even by the US government to be a danger to health or the environment.

Drone Warfare is Neither Cheap, Nor Surgical, Nor Decisive

William Astore, Op-Ed: Today’s unmanned aerial vehicles, most famously Predator and Reaper drones, have been celebrated as the culmination of the longtime dreams of airpower enthusiasts, offering the possibility of victory through quick, clean and selective destruction. Those drones, so the (very old) story goes, assure the U.S. military of command of the high ground and so provide the royal road to a speedy and decisive triumph over helpless enemies below. Fantasies about the certain success of air power in transforming, even ending, war as we know it arose with the plane itself.

Don’t Like Your Health Insurance? Make Your Own

Nina Rogozen, News Report: Millions of Americans lack adequate health care, using emergency rooms as a costly alternative or getting no care at all. The Patient Protection and Affordable Care Act (ACA), often called “Obamacare,” opened the door for an affordable option. The December 31, 2012 deal between Congress and the administration that avoided the so-called “fiscal cliff” has, at least for the moment, closed that door for 26 states. The ACA funds private, nonprofit health insurers called Consumer Operated and Oriented Plans—CO-OPs. It originally set aside $3.4 billion for low-interest loans—seed money for at least one health cooperative in each state, plus Washington, D.C.

Capitalism in Crisis: Richard Wolff Urges End to Austerity, New Jobs Program, Democratizing Work

Amy Goodman, Video Interview: As Washington lawmakers pushes new austerity measures, economist Richard Wolff calls for a radical restructuring of the U.S. economic and financial systems. We talk about the $85 billion budget cuts as part of the sequester, banks too big to fail, Congress’ failure to learn the lessons of the 2008 economic collapse and his new book, “Democracy at Work: A Cure for Capitalism.” Wolff also gives FOX news host Bill O’Reilly a lesson in economics 101.

America Split in Two: Five Ugly Extremes of Inequality

Paul Buchheit, Op-Ed: The first step is to learn the facts, and then to get angry and to ask ourselves as progressives and caring human beings, what we can do about the relentless transfer of wealth to a small group of well-positioned Americans. End the capital gains giveaway, which benefits the wealthy almost exclusively. Institute a Financial Speculation Tax; both to raise needed funds from a currently untaxed subsidy on stock purchases and to reduce the risk of the irresponsible trading that nearly brought down the economy.

Thirteen Offensive Things Justice Scalia’s Compared to Homosexuality

Ian Millhiser, News Report: Tomorrow, the Supreme Court will hear the first of two cases which could end discrimination against same-sex couples and ensure that all Americans can marry the person they love. Whatever happens in those two cases, one thing is all but certain: Justice Antonin Scalia will vote to maintain marriage discrimination and he will spend much of this week’s oral arguments making insulting comments about LGBT Americans. After the offensive things Scalia compared homosexuality to in his past opinions, Scalia concludes his Lawrence dissent with a plea that he is not in the least bit anti-gay. “Let me be clear,” Scalia writes, “that I have nothing against homosexuals.”

Asia and a Post-American Middle East

Yuriko Koike, Op-Ed: When the consequences of the U.S.-led invasion of Iraq ten years ago are fully assessed, the importance of the subsequent rise of political Islam there—and throughout the wider Middle East—may well pale in comparison to that of a geostrategic shift that no one foresaw at the time. That shift, however, has now come into view. With America approaching energy self-sufficiency, a U.S. strategic disengagement from the region may become a reality. China’s dependence on Middle East energy imports means that it is almost certain to seek to fill any regional security vacuum.

How to Avoid Fake Organic Products

Anthony Gucciardi, News Report: Thanks to corporate loopholes and profit-driven manufacturers, it’s harder than ever to really know what you are putting into your body — or perhaps even more importantly the mouths of your children. That said, it is possible to make sure you’re getting what is not just labeled organic and shipped from a contaminated facility in China, but actually high quality. The fact of the matter is that the decision to switch to organic food is one that signifies a serious change in lifestyle across the board, leading to a wealth of information and serious optimizations for your health.

Dozens Arrested as Keystone XL Protests Erupt Across the U.S.

News Report: One month after the largest climate rally in U.S. history urging President Obama to deny the permit for the Keystone XL pipeline’s northern segment, protesters in dozens of cities throughout the U.S. are confronting Keystone XL’s corporate backers directly. Thirty-seven have been arrested over the last 10 days for disrupting business as usual at TransCanada and their investors’ offices, with more actions planned over the next couple of days.

Debt Friendly Stimulus

Robert J. Shiller, Op-Ed: With much of the global economy apparently trapped in a long and painful austerity-induced slump, it is time to admit that the trap is entirely of our own making. We have constructed it from unfortunate habits of thought about how to handle spiraling public debt. People developed these habits on the basis of the experiences of their families and friends: when in debt trouble, one must cut spending and pass through a period of austerity until the burden (debt relative to income) is reduced.

Fox: Americans Need Assault Weapons to Protect Themselves from an Iranian Invasion, Al Qaeda

Igor Volsky, News Report: During a roundtable discussion on Friday, Fox News’ Lou Dobbs agreed with a network contributor who argued that Americans need to access military-style assault weapons to protect themselves from an Iranian invasion. “What scares the hell out of me we have a president, as we were discussing during break, that wants to take away our guns, but yet he wants to attack Iran and Syria. So if they come and attack us here, we don’t have the right to bear arms under this Obama administration,” Angela McGlowan, a former lobbyist for News Corp., said in the midst of a conversation about violence in Syria.

Climate Change Now Seen as Security Threat Worldwide

Jim Lobe, News Report: Defense establishments around the world increasingly see climate change as posing potentially serious threats to national and international security, according to a review of high-level statements by the world’s governments released here Thursday. The review, “The Global Security Defense Index on Climate Change: Preliminary Results,” found that nearly three out of four governments for which relevant information is available view the possible effects of climate change as a serious national security issue.

Tea Party Aligned S. Carolina Candidate Bankrolled by Kentucky Natural Gas Exec

Michael Beckel, News Analysis: Natural gas executive James Willard Kinzer of Kentucky is one of more than 100 small business owners listed online as supporting Curtis Bostic, the former Charleston County council member who appears to have advanced to a runoff against former Gov. Mark Sanford following Tuesday’s 16-way GOP primary in South Carolina’s 1st Congressional District. But he’s much more than that. Not only did Kinzer donate the legal maximum to Bostic’s underdog campaign, he pumped $30,000 into a pro-Bostic super PAC called the “Coastal Conservative Fund.”

BBC-Guardian Exposé Uses WikiLeaks to Link Iraq Torture Centers to U.S. Col. Steele and Gen. Petraeus

Amy Goodman, Video Feature: A shocking new report has been released by The Guardian newspaper and BBC Arabic detailing how the United States armed and trained Iraqi police commando units that ran torture centers and death squads. It’s a story that stretches from the U.S.-backed involvement in Latin America to the imprisoned Army whistleblower Bradley Manning. Amy Goodman is joined by Chief Reporter Maggie O’Kane

Beware the New Corporate Tax-Cut Scam: LIFT is a Big LIE

Dave Johnson, Op-Ed: The executives who run the giant multinationals want to be let off the hook for paying taxes on profits they make outside our borders. As an Apple executive said to The New York Times, giant multinationals “don’t have an obligation to solve America’s problems.” And to prove it, American corporations are holding $1.7 trillion in profits outside the country—just sitting there—rather than bringing that money home, paying the taxes due and then paying it out to shareholders or using it to “create jobs” with new factories, research facilities and equipment.

Full Show: What Has Capitalism Done for Us Lately?

Bill Moyers, Video Interview: Sheila Bair, the longtime Republican who served as chair of the Federal Deposit Insurance Corporation (FDIC) during the fiscal meltdown five years ago, joins to talk about American banks’ continuing risky and manipulative practices, their seeming immunity from prosecution and growing anger from Congress and the public. Also, Richard Wolff, whose smart, blunt talk about the crisis of capitalism the first time around now answers questions sent in by viewers, diving further into economic inequality, the limitations of industry regulation and the widening gap between a booming stock market and a population that increasingly lives in poverty.

An Open Letter to Mitch McConnell, From a Kentuckian

Carl Gibson, Op-Ed: Kentuckians live by the phrase, “United We Stand, Divided We Fall.” It’s emblazoned on our flag, and shows two men, a frontiersman (Daniel Boone) and a statesman (Henry Clay) standing together. They may be standing on opposite sides of the seal, but their embrace symbolizes a spirit of cooperation and caring for your fellow man even though you may sometimes disagree with him. Yet, as Senate Minority Leader, Mitch McConnell proudly announced that his chief goal as the top Republican member was not to create jobs or help schools or look out for struggling middle class, but to deny President Obama a second term.

GMO Boycott: Major Supermarkets Say NO to GM Salmon

Anthony Gucciardi, News Report: Whether or not the FDA chooses to approve genetically modified salmon for sale in the marketplace, supermarkets themselves have decided to take a stand in the form of a mass boycott. One that would serve to crush the profits of the unlabeled seafood abomination. In a move that signifies the growing opposition to genetically modified creations from a grassroots level all the way to corporate understanding of consumer demand, chains like Whole Foods, Trader Joe’s, Aldi, and others are now all reporting that they will refuse the sale of AquaBounty Technology’s modified salmon.

Faced with F-35 Failures, Costs; Congress Says to Push On

William Boardman, News Report: The F-35 is a case study of government failure at all levels—civilian and military, federal, state, local, even airport authority. Not one critical government agency is meeting its obligation to protect the people it presumably represents. Senator Patrick Leahy, D-Vt., who wrote the F-35 critique above, is hardly unique as an illustration of how government fails, but he sees no alternative to failure. The F-35 is a nuclear-capable weapon of mass destruction that was supposed to be the “fighter of the future” when it was undertaken in 2001.

Ryan’s Path to Poverty v3.0 = Romney Plan

— by ThinkProgress War Room, March 12, 2013

The New Old GOP Plan That Favors Millionaires Over the Middle Class

As you may recall, we had an election last year in which Mitt Romney, Paul Ryan, and their ideas were soundly rejected by voters.

Well, one person appears to have not gotten the message: Paul Ryan. Today, Ryan released the latest draconian budget from House Republicans and it is “almost identical to the Republican presidential platform in 2012.”

Here’s a closer at just how closely Ryan hewed to the unpopular and extreme policies he and Romney ran on — and lost.

Evening Brief: Important Stories That You Might’ve Missed

This material [the article above] was created by the Center for American Progress Action Fund. It was created for the Progress Report, the daily e-mail publication of the Center for American Progress Action Fund. Click here to subscribe.