The War on Social Insurance (Soc Sec/Medicare): the Nexus

by: Bruce Webb

Wed Nov 25, 2009 at 16:30

Homer began the Iliad, his epic telling of the Trojan War, 'in media res' - in the middle of the affair and then told the story backwards and forwards and it is useful to address the War on Social Insurance in the same way. Because most of the warriors would indignantly deny they were waging any such war at all.

So we begin with I.O.U.S.A.: the Movie

Wake up, America! We're on the brink of a financial meltdown. I.O.U.S.A. boldly examines the rapidly growing national debt and its consequences for the United States and its citizens. Burdened with an ever-expanding government and military, increased international competition, overextended entitlement programs, and debts to foreign countries that are becoming impossible to honor, America must mend its spendthrift ways or face an economic disaster of epic proportions.

Creadon uses candid interviews and his featured subjects include Warren Buffett, Alan Greenspan, Paul O'Neill, Robert Rubin, and Paul Volcker, along with the Peter G. Peterson Foundation's own David Walker and Bob Bixby of the Concord Coalition, a Foundation grantee.
Pointedly topical and consummately nonpartisan, I.O.U.S.A. drives home the message that the only time for America's financial future is now.

I.O.U.S.A is at its core a docuumentary of the Concord Coalition's Fiscal Wake-Up Tour

The Fiscal Wake-Up Tour is a joint public engagement initiative by The Concord Coalition, the Budgeting for National Priorities Project at the Brookings Institution, the Heritage Foundation, and the Honorable David M. Walker, President and CEO of The Peter G. Peterson Foundation.

Our mission is to cut through the usual partisan rhetoric and stimulate a more realistic public dialogue on what we want our nation's future to look like, along with the required trade-offs. We believe that elected leaders in Washington know there is a problem, but they are unlikely to act unless their constituents better understand the need for action, and indeed, demand it. Members of the Fiscal Wake-Up Tour do not necessarily agree on the ideal levels of spending, taxes and debt, but we do agree on the following key points:

Current fiscal policy is unsustainable

There are no easy solutions, such as cutting waste fraud and abuse or growing our way out of the problem.

Finding solutions will require bipartisan cooperation and a willingness to discuss all options.

Brookings is generally labeled as a left-leaning institution and so would seem an unlikely participant in the War on Social Insurance. But there has long been a group of deficit hawks in liberal circles often associated with Bob Rubin and if we examine the principals in the Brookings-Heritage Fiscal Seminar we can add key names like Robert Reischauer of the Urban Institute (and former CBO Director) along with Isabel Sawhill of Brookings and Stuart Butler of Heritage. And Butler begins to let the cat out of the bag:

"The big problem is the huge build-up of the three entitlement programs," Butler said. Without curbing entitlements and spending, taxes would have to rise by about 50 percent. "Something has to give," he said.

If we put all these materials together what is the end proposal? Well if the main problem is entitlement programs and Washington is grid-locked obviously you need some outside mechanism, say a Bi-Partisan Commission made up largely by sensible scholars, past budget officials, and congressman who are willing to 'Wake-Up' and 'Face their Fiscal Future' and present an action package to Congress. And in order to by-pass ideological grid-lock (i.e. defenders of social insurance) it would be best for this package be modeled on BRAC-the Base Realignment and Closure Commission of the 1990s where only an up or down vote was allowed. Where are you going to find congressmen brave enough to face this reality? How about  Conrad and Gregg on the Senate side and Cooper and Wolf on the House side. Hence the bills Conrad-Gregg and Cooper-Wolf. From Cooper's official website:

WASHINGTON - U.S. Congressmen Jim Cooper (D-TN) and Frank Wolf (R-VA) today released a letter sent to all presidential candidates calling on them to support the Cooper-Wolf proposal to create a long-term spending reform commission. The SAFE Commission Act (H.R. 3654) has already drawn bipartisan support from 48 cosponsors and been heralded by national commentators.

"The slow collapse of Medicare, Social Security, and other entitlement programs threatens to cut every senior's benefits, raise every worker's payroll taxes, and bankrupt America-and it will all occur on the next president's watch.  We want to help you avoid this national nightmare," write Cooper and Wolf in the letter, which was mailed last Friday.

"We write today to let you know that if you win, we have the perfect gift for you.  It's a lasting solution to the long-term spending problem-the biggest you will face as president."
Cooper and Wolf describe the 16-member, bipartisan "commission with teeth" and urge the candidates to lend it their support. "By running for president in 2008 you have volunteered to stop the treacherous decline in U.S. financial strength," they write. "The American people deserve to know the extent of the financial straits we face.  It will be your job to stem the tide, and we believe this commission is the answer."

The bipartisan Cooper-Wolf SAFE Commission Act was introduced in September with support from U.S. Comptroller General David Walker, the Concord Coalition, the Brookings Institution, the Heritage Foundation and the Committee for a Responsible Federal Budget. In the weeks since its introduction, the Cooper-Wolf bill has been endorsed in principle by House Majority Leader Steny Hoyer and has garnered praise from New York Times columnist David Brooks and Washington Post columnist Robert Samuelson.

To find out why we like Homer have to travel back from the middle of the battle and I.O.U.S.A. to a paper written by our friend Stuart Butler of Heritage in 1983 along with Peter Germanis, known to policy wonks as Butler-Germanis, but is properly known as Achieving a "Leninist" Strategy.  The whole thing is worth a read, in it Butler and Germanis lay out a multi-year strategy to undercut support for Social Security and to isolate remaining supporters while a 'reform' coalition is built up using strategies devised by Lenin.

Unlike many other socialists at the time, Lenin recognized that fundamental change is contingent both upon a movement's ability to create a focused political coalition and upon its success in isolating and weakening its opponents.

As we contemplate basic reform of the Social Security system, we would do well to draw a few lessons from the Leninist strategy. Many critics of the present system believe, as Marx and Lenin did of capitalism, that the system's days are numbered because of its contradictory objectives of attempting to provide both welfare and insurance. All that really needs to be done, they contend, is to point out these inherent flaws to the taxpayers and to show them that Social Security would be vastly improved if it were restructured into a predominantly private system. Convinced by the undeniable facts and logic, individuals supposedly would then rise up and demand that their representatives make the appropriate reforms.

While this may indeed happen, the public's reaction last year against politicians who simply noted the deep problems of the system, and the absence of even a recognition of the underlying probwill be a long time before citizen indignation will cause radical change to take place. Therefore, if we are to achieve basic changes in the system, we must first prepare the political ground so that the fiasco of the last 18 months is not repeated.

The current push to enact 'reform' to 'Entitlements' through a mechanism that bypasses both small d democracy and big D New Deal and Great Society Democrats to kill Social Security as we now it is just the culmination of twenty-six years of the enemies of Social Security executing their "Leninist Strategy". To extend the analogy from the start Cooper-Wolf is the Trojan Horse, in this case dressed up in attractive 'bi-partisan' harness. The only question is whether we are going to let it in the gate.

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Now to be clear, not all of the participants in this are acting with malice aforethought, a lot of them have just over the years fallen for the strategy. But there are some people who are activated by actual hatred of the whole concept of Social Insurance. Among these are clearly Stuart Butler and someone mentioned here only by reference but is actually the financier of the whole effort, the founder not only of Concord and the Peter G Peterson Foundation and so the effective boss of Bixby and Walker, the main characters in I.O.U.S.A.'s depiction of the Fiscal Wake-Up Tour, but actually the man who has distribution rights to the movie itself, PGP himself. It is not clear exactly why Pete Peterson hates Social Security so much that he endowed a foundation with a billion dollars with the goal of killing it and other social insurance programs but it is what it is: http://www.pgpf.org/about/