Salon.com > Simpson-Bowles

Meet the pro-austerity hypocrites

Thu, 02 May 2013 22:22:00 +0000

The major corporations backing a group founded by the pro-austerity icons Simpson and Bowles take advantage of a loophole to avoid paying taxes on some of what they pay their CEOs, according to a new report.

The report, from the liberal Institute for Policy Studies, finds that between 2009 and 2011, top executives at the 90 publicly held corporate members of the Fix the Debt coalition raked in at least $953 million -- and as much as $1.6 billion -- through the “performance pay” loophole, which counts some executive compensation as a tax-deductible business expense, instead of a salary. Fix the Debt, founded by Alan Simpson and Erskine Bowles, is one of the many groups tied to Wall Streeter cum policy entrepreneur Pete Peterson, who has spent the last 20 years trying to reduce the debt, in large part through cuts to programs like Social Security and Medicare. The group has attracted some of the largest corporations in the country as sponsors, as well as former lawmakers, giving it serious clout in Washington.

What if Simpson and Bowles threw a debt-reduction party and nobody came

Mon, 29 Apr 2013 12:00:00 +0000

Alan Simpson and Erskine Bowles would like you to know that they are still around and still have some plans and they would still like a "grand bargain." The best friends forever were granted space on the Washington Post editorial page to make their case for common-sense deficit reduction achieved through a series of politically impossible compromises.

Simpson and Bowles have been speaking to the people, and the people agree with them!

No matter our audience, those we spoke with shared two things: a thirst for the truth about what it will take to right our fiscal ship and a willingness to be part of the solution so long as everyone is in it together.

Basically these two are nostalgic for December when it seemed like a "grand bargain" might actually happen:

Well-off people soon to finally be inconvenienced by sequestration

Tue, 23 Apr 2013 11:45:00 +0000

This week, the FAA began keeping 10 percent of America's air-traffic controllers home every day, because of a stupid federal budget argument that turned into a purposefully bad law. Furloughing a bunch of air traffic controllers has a pretty easy-to-predict effect on air travel: It causes delays. Airlines have been sending out automated emails warning travelers to expect as much. The Washington Post yesterday reported on how the first day of furloughs turned out: The New York airports had delays of "one to three hours." By later in the day, those delays had rippled out to airports in the middle of the country. By late Monday night, LAX was still dealing with delays of more than an hour.

I am guessing that over the next few days a lot of Americans are going to hear about these delays, or be personally inconvenienced by them, and think to themselves, wait, the sequester thing is still happening? Well, yes, it is, because so far it hasn't been that bad, for certain Americans. Other Americans, though, have been aware of the cuts since they went into effect.

Abolish the 401(k)

Thu, 04 Apr 2013 17:22:00 +0000

America’s retirement security policies are facing a major crisis. No, not the problem that Pete Peterson, Alan Simpson and Erskine Bowles and other so-called deficit hawks have become famous for exaggerating — the relatively minor mismatch between promised Social Security benefits and scheduled Social Security payroll taxes in the 2030s. The real crisis facing current and future retirees in America’s aging society is the failure of the private components of America’s mixed public-and-private retirement system.

When Social Security was created in 1935, it was not intended to be the sole source of retirement income for most Americans. It was assumed that employer-provided defined benefit pensions with guaranteed payouts would supplement Social Security checks for many workers after they retired.

Unfortunately, employers have been abandoning defined benefit pensions for decades. The number of private sector workers with defined benefit pensions has fallen from around 40 percent in 1980 to a mere 15 percent today. At the same time, among public sector workers, poor management by state governments, combined with years of economic trouble, has created a crisis for public pension systems in many states.

Three reactions to Simpson-Bowles II

Wed, 20 Feb 2013 19:26:00 +0000

That deficit demolishing duo of distinction —Simpson/Bowles—is at it again, out with the shell of a new planto reduce the deficit by $2.4 trillion over the next decade.

My first reaction was “really??…another new plan??…we need that!??” My second was “why $2.4 trillion?” We at CBPP have argued that our first order goal should be to stabilize the debt over the decade, and to do so would take about another $1.5 trillion in deficit reduction ($1.3 trillion in policy savings and the rest in interest savings). My third reaction was, “Why did the White House elevate these guys and was that a mistake?”

Re reaction #1 (do we need another plan?) these two dudes are deeply ensconced in this debate—and quite passionate about it—and there’s no stopping them from weighing in. Among the minority that’s actually looked closely at what they’ve proposed, you won’t find anyone who agrees with all of their ideas, as they’d be the first to admit. But they certainly have very high standing on the issue of the national debt.

Simpson and Bowles release lame “Simpson-Bowles” sequel

Tue, 19 Feb 2013 20:39:00 +0000

Would you please do Erskine Bowles and Alan Simpson the courtesy of paying attention to their new Simpson-Bowles plan? Yes, today the two deficit vultures released the long-awaited sequel to their other plan, the famous "Simpson-Bowles Plan" (now officially to be referred to as "Simpson-Bowles Episode IV"). The original Simpson-Bowles plan was incredibly popular despite the fact that its actual recommendations weren't supported by anyone, including the people who always talked about how much they loved it.

This new plan got a big rollout sponsored by Politico, whose Mike Allen hosted and interviewed the pair this morning in Washington -- supporting Simpson-Bowles is not considered "biased" or "partisan" according to the usual rules of traditional journalistic objectivity -- but some mean hecklers interrupted them. In a worrying sign for people for whom deficit reduction via earned benefits program cuts is a moral crusade, the heckler got a lot more attention on Twitter than the new Simpson-Bowles plan did. Can they recapture the magic? Or will this be like whatever gross stunt food product KFC put out after the Double Down, a pale imitation of a genuine phenomenon, doomed to be forgotten?

Americans aren’t living beyond their means

Fri, 25 Jan 2013 19:58:00 +0000

Brace yourself. In coming weeks you’ll hear there’s no serious alternative to cutting Social Security and Medicare, raising taxes on the middle class, and decimating what’s left of the federal government’s discretionary spending on everything from education and job training to highways and basic research.

“We” must make these sacrifices, it will be said, in order to deal with our mushrooming budget deficit and cumulative debt.

But most of the people who are making this argument are very wealthy or are sponsored by the very wealthy: Wall Street moguls like Pete Peterson and his “Fix the Debt” brigade, the Business Roundtable, well-appointed think tanks and policy centers along the Potomac, members of the Simpson-Bowles commission.These regressive sentiments are packaged in a mythology that Americans have been living beyond our means: We’ve been unwilling to pay for what we want government to do for us, and we are now reaching the day of reckoning. The truth is most Americans have not been living beyond their means. The problem is their means haven’t been keeping up with the growth of the economy — which is why most of us need better education, infrastructure, and healthcare, and stronger safety nets. The real median wage is only slightly higher now than it was 30 years ago, even though the economy is twice as large. The only people whose means have soared are at the very top, because they’ve received almost all the gains from growth. Over the last three decades, the top 1 percent’s share of the nation’s income has doubled; the top one-tenth of 1 percent’s share, tripled. The richest one-tenth of 1 percent is now earning as much as the bottom 120 million Americans put together. Wealth has become even more concentrated than income (income is a stream of money, wealth is the pool into which it flows). The richest 1 percent now own more than 35 percent of all of the nation’s household wealth, and 38 percent of the nation’s financial assets – including stocks and pension funds.Think about this: The richest 400 Americans have more wealth than the bottom 150 million of us put together. The six Wal-Mart heirs have more wealth than the bottom 33 million American families combined.