Billionaire Pete Peterson's Quest to 'Reform' Social Security: Follow the (His) Money

Since healthcare is temporarily off the radar screen, despite Republican attempts to have Romneycare declared unconstitutional (how Romneycare would be unconstitutional, but Medicare wouldn't, well, that would be fun...), we can now return to the never-ending attempt by conservatives to gut Social Security. One of the key figures and bankrollers in that attempt is financier Peter Peterson. By key, I mean that he has spent around one billion dollars financing the Peterson Foundation, which advocates various 'fiscal responsibility' measures (i.e., making Granny eat cat food) and slashing Social Security benefits*. But as always, one must follow the money, since Peterson's 'charity' seems rather self-interested--and not in the sense of 'healthy children are good for all of us' (italics mine):

...we can get a sense of what is on the table by looking at the earlier agenda of Peterson's Commission on Budget Reform. The Peterson/Walker plan would have slashed social security entitlements at a time when Wall Street has destroyed the home equity and private retirement accounts of potential retirees. Worse, it would have increased the Social Security tax, disguised as a "mandatory savings tax." This added tax would be automatically withdrawn from your paycheck and deposited to a "Guaranteed Retirement Account" managed by the Social Security Administration. Since the savings would be "mandatory," you could not withdraw your money without stiff penalties; and rather than enjoying an earlier retirement paid out of your increased savings, a later retirement date was being called for. In the meantime, your "mandatory savings" would just be fattening the investment pool of the Wall Street bankers managing the funds.

But, perhaps Peterson et alia are just fucking morons who suck at public policy? Let's follow the money some more (italics mine):

Political analyst Jim Capo discusses a slide show presentation given by Walker after the "I.O.USA." premier [a movie backed by the Peterson Foundation about how our debt makes us DOOMED!], in which a mandatory savings plan was proposed that would be modeled on the Federal Thrift Savings Plan (FSP). Capo comments:

"The FSP, available for federal employees like congressional staff workers, has over $200 billion of assets (on paper anyway). About half these assets are in special non-negotiable US Treasury notes issued especially for the FSP scheme. The other half are invested in stocks, bonds and other securities.... The nearly $100 billion in [this] half of the plan is managed by Blackrock Financial. And, yes, shock, Blackrock Financial is a creation of Mr. Peterson's Blackstone Group. In fact, the FSP and Blackstone were birthed almost as a matched set. It's tough to fail when you form an investment management company at the same time you can gain the contract that directs a percentage of the Federal government payroll into your hands."

To put this in context, currently the annual Social Security revenues are over $700 billion. If, between rerouting money and increasing payroll taxes (cat food for all!), $350 billion could easily be diverted to firms like Blackrock. Even if Peterson's company only gets part of that, he earns back his billion (which was tax-deductible of course) pretty quickly. And then makesextracts a killing.

I'm certain that Peterson is a high-minded patriot concerned only about the fiscal health of our country (never mind that current deficits aren't the terrifying problem he claims they are), but this is a massive conflict of interest.

And it should tell you what the real motivations of the 'fiscal responsibility' crowd are: protecting Wall Street and the wealthy at the expense of most Americans.

*As I've written many times before, without a decades-long economic slump, the annual revenue generated by the Social Security payroll tax plus the liquidation of the trillions of dollars of U.S. securities held by the Social Security Trust Fund will adequately cover all expected payouts. The budgetary crisis has to do with the general budget (and national debt). Why one would be motivated to consider slashing the most successful anti-poverty program in U.S. history as the first option in order to solve a general budgetary problem (as opposed to further reducing runaway Medicare costs, cutting other areas, or raising taxes--AAAIIEEE!!!) is, well, the subject of this post.

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Mike the Mad Biologist links to a piece arguing that Social Security is fine thank you very much. Rumor to the contrary is pure political propaganda, and the fact that many young people think they'll never see a dime is a result of simple fearmongering. I am sorry to say that they're not right.…

Other than Pat Buchanan, Peterson may be the last politically active relic of the Nixon administration.

Still doing his best to destroy the US from within, like the rest of his criminal gang. Somewhere in a pit of boiling sulphur, Tricky Dick is looking upward with a smile.

By Pierce R. Butler (not verified) on 29 Mar 2010 #permalink

In Italy, this is the kind of guy who would get his kneecaps blown off.

By Gingerbaker (not verified) on 29 Mar 2010 #permalink

hi i too am convoluted in pattern and frequently attain unwaranted results i hope to do better in the future even though i have been sucessful so far spell check has recked havoc with my logic as well as what i was trying to express.
each country should have one language and one dictionary not a conglomerat of disconnected hierarcies by catagory the granny eating cat food may have been her need to leave the average to others instead of acknowedging her own intellegence there are knots and then there is an untieing of the self that is one with growing old. it occurs in the womb as well somuch for protection priorities that is needed to improve upon we may not reckognize the visual as being the audio or need to. business left to business men
will as it does be already on their own Darwinian agenda.
understood to be the damages of freudian explanation the acceptance is not representational of their time only the machine of a movable system instead of the identity of the individual by asociation in its own location the striving to timless word sought by their authors (science 1900's to the early 19? advent of the ferme lab's influences is not as nobel as the unification of it's recognition to an identity by usage as a location more so than a communicated abstraction of language at a retained idea. their paragrapic effects are to blame more than the people expressing the concepts in print. most were actualy very fine people seeking notable employment to the offence of standard obediences. a self in conflict with athority in transition. they did know prior to the chinese rocket that there were spirit stars and there was a difference in the importance of global identity of gap differencials in traveling to a place by way of a location. there are things new under the sun. constant and consistently in flux by ways of language.

By joseph harlacher (not verified) on 28 Jun 2010 #permalink

Peterson is still at it:


My comment there:

How interesting. An article on US taxation that never mentions Social Security - the tax paid on every dollar earned by working Americans borrowed to pay the bills for the last 30 years as the income tax was cut.

A few of the howlers in the article:

"...Americans pay about 85 percent of the taxes they owe..." This is only income taxes. Working people never see the FICA payroll taxes taken out for Social Security so they pay 100%. Most of the unpaid 15% must from the rich.

"...wealthiest 1 percent ... pays about 18 percent of all taxes." No. FICA payroll taxes account for 36% of revenues and we need to count some of that doubly since it is borrowed to cover shortfalls due to tax cuts. (see:…)

"...cut almost everyoneâs payroll and income taxes by half..." Cut "payroll" taxes? Do they mean FICA taxes for Social Security, by 50%! What about the Trust Fund and money owed to cover retirees Social Security? Unsure what they mean here but it sounds bad.

At the bottom we see - Newsweek writers were "...assisted by Susan Tanaka of the Peterson Foundation." That is Pete Peterson's "Foundation" See this:Âe_pete_p… for all you need to know about the bias of this article - and why Social Security never comes up.


By Loren F. File (not verified) on 01 Sep 2010 #permalink

There is much validity to what you say, however the picture is much larger than any of your "rantings", really. Really?

By Gods must be crazy (not verified) on 12 Dec 2010 #permalink