On Saturday, America spoke clearly: Tax the rich! Cut the military budget! Tax Wall Street!
But the message that will be delivered to the President's Deficit Commission will likely be: Cut Social Security! Cut Medicare! And the message to Congress will be sacrifice the unemployed, education, and jobs to reduce the deficit.
Billionaire investor Peter Peterson financed America Speaks last Saturday -- simultaneous "town meetings" in 60 towns and cities. Peterson has poured $1 billion into the Peterson Institute, whose goal is building popular support for cutting Social Security and Medicare/Medicaid. I attended the event in New Haven, CT.
All of the cities followed the same script. But the whole discussion was based on false premises:
1. The greatest threat to America's future is the long-term deficit
2. It is possible to talk about the deficit in isolation from the rest of the economy
The script presented an alarming picture of a growing deficit that threatens to swallow the entire economy. But it did not present the context. A few of the things they left out:
1. The long-term budget problem is really a problem of health care costs. It is the health care system that needs being fixed.
2. Inequality has reached record levels in the last 30 years. The richest 1% have doubled and tripled their wealth, while the other 99% have stagnated or lost ground. Taxes on the wealthy have fallen while taxes (including state and local) on the rest of us have risen.
3. Social Security has its own funding stream (our payroll taxes), is running a surplus, and will be able to pay full benefits for at least another 25-30 years without cutting benefits or raising the retirement age.
4. The ability to meet government expenses depends on a strong economy, including a well-educated and healthy population, a strong infrastructure, clean environment, clean reliable energy supply, a more equitable distribution of income, and production of useful goods and services, not speculation and luxury consumption.
The participants were divided into small groups and asked to cut the deficit in 2025 by $1.2 trillion. We were not allowed to challenge the goal or the premises, or to raise other urgent problems to be solved in the next 15 years. We were presented with 40 options for reducing the deficit, with less than 2 minutes to discuss each option, and no way to suggest other options.
The 3,500 participants across the country agreed on measures to tax the rich, the corporations, and Wall Street, to cut military spending, and to enact a carbon tax to aid a shift to clean energy. These were also the conclusions reached by the small group I participated with. There was a class-conscious current that crossed party lines. A man who plans to vote for the Republican Senate candidate was outspoken that the rich need to pay more, "and none of us at this table make that kind of money," he said.
But my group also went along with the other participants nationwide in agreeing to raise the Social Security retirement age to 69, and to cut Medicare/Medicaid spending by 5%-10%. In the two minutes allowed for each option, there was no time to explore these issues in depth. But in some cities, participants refused to follow the script, and insisted on being allowed to vote for "single payer" health care reform. This would be an essential step to controlling the costs of the entire health care system, avoiding cuts to Medicare/Medicaid.
When confronted with the question, should the government concentrate on solving immediate problems or long-term problems, my group all agreed that it is a false question; that solving immediate problems like creating jobs in education, clean energy, rebuilding infrastructure is essential to solving long-term problems. But this was not an option we were allowed to vote on.
The "town hall" meetings were presented as an opportunity for ordinary citizens to have input to deciding national priorities. Most in my group expressed appreciation of the opportunity to speak out, and a sense of obligation to be part of the discussion. Locally, the meeting was organized and conducted by academic researchers and groups like Community Mediation, which are interested in bringing together people from diverse backgrounds to solve problems.
But we were playing with a stacked deck. Even though we came up with some surprisingly good proposals, the immediate impact of these "town hall meetings" will be to validate the faulty premise that the biggest economic priority is immediate action to cut future deficits. This premise has already been used as an excuse by Senate Republicans to kill extended unemployment benefits and deny aid to state governments. As a result, over a million people have already lost all their income, and another 7.5 million will be kicked off by December. State governments are facing new budget crises and 300,000 teachers are on track to be laid off on top of last year's cut-backs. How can this help the economic future of the country?