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Sen. Elizabeth Warren (D-Mass.) is leading a populist charge in Congress--to the dismay of some in her party. (Photo by Win McNamee/Getty Images)

A Very Adult Social Security Tantrum

Centrist Dems are horrified by Elizabeth Warren’s plan to raise benefits. But populists aren’t backing down.

BY Chris Lehmann

It’s too much to hope, of course, that this glimpse into D.C.’s standard-issue policy-racketeering could serve as a teachable moment, driving home for a genuine populist Democratic constituency the disgraceful folly of self-enamored Beltway centrism.

Populists! Run!

That, in a phrase, is how the sachems inside the leadership circles of the Democratic Party have greeted the merest suggestion that Democratic lawmakers might turn their attention to expanding Social Security.

On another, saner planet, you might expect the strategists of a major political party to hear out a proposal to make the most popular spending program of the past century or so available to more people. You’d also think that said strategists would understand, on a purely political calculus, that it’s a good idea to reinforce the honorable Democratic origins of Social Security in the minds of voters who have precious little else to induce them to vote their pocketbooks in coming election cycles.

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But you would, of course, be wrong. That’s because the Democratic establishment is an all-but wholly owned subsidiary of Washington’s interlocking lobbying, consulting and pundit classes. These operators are devotees of the catechism that entitlement spending simply must be reined in at every conceivable other cost—and that making the difficult, grown-up decision to do just that renders one a Responsible Political Leader with the bona fides to lounge about in David Gregory’s Green Room.

So it was with the brio of genuine Democratic Grown-ups that Jon Cowan and Jim Kessler, respectively the president and senior policy executive for the center-right Democratic think tank Third Way, took to the op-ed pages of the Wall Street Journal to hammer away at the refrain that the principles of economic populism, as embodied in Massachusetts Sen. Elizabeth Warren’s modest plan to increase Social Security benefits to keep better pace with inflation, are simply “disastrous.” Warren would pay for the increase by raising taxes on the wealthy, they wail. Worse, they argue, increasing federal spending on dread “entitlements” would beggar other progressive Democratic causes, like more robust spending on the nation’s aging infrastructure.

But wonder of wonders, Cowen and Kessler’s faux-adult posturing—which was but the latest entry in Washington’s never-ending pageant of fiscal-restraint display, from the Gramm-Rudman balanced-budget act of 1985 to 2011’s imbecilic Simpson-Bowles “grand bargain” on spending—was called out with unusual vigor by actual economic populists. Progressives United, the political action committee founded by former Wisconsin Sen. Russ Feingold, sent out a heated round of donor appeals, with subject headings like “Who Do These People Think They Are?”—and then supplied the impolitic answer: “Third Way is a corporate-funded ‘Democratic’ organization that took to the Wall Street Journal to attack Elizabeth Warren and progressives for fighting to expand Social Security and make the wealthy pay their fair share.”

Warren, for her part, threatened to fully expose the corporate donors behind Third Way via a call for Wall Street titans to disclose their expenditures on think tanks—a proposition that would likely be more than a little embarrassing to the group. As Lee Fang has reported at The Nation, Third Way counts two big-ticket Romney donors on its board, Daniel Loeb and Derek Kaufman, and has contracted out consulting work to the corporate lobbying behemoth Peck, Madigan, Jones & Stewart, which has a vast range of boodlers on its client roster, from the health-care giant Humana to the PhRMA trade association to the U.S. Chamber of Commerce to the International Swaps and Derivatives Association. It’s a galactic understatement to say that these organizations are none too keen on seeing tax hikes fund a wide swath of income benefits to the nation’s hard-pressed middle and working classes.

It’s too much to hope, of course, that this glimpse into D.C.’s standard-issue policy-racketeering could serve as a teachable moment, driving home for a genuine populist Democratic constituency the disgraceful folly of self-enamored Beltway centrism. That’s particularly regrettable these days, since more impartial assessments of the impact of Great Society liberalism show that its central income guarantees not only remain quite popular politically but have proven quite successful as social policy. This view flies in the face of a whole generation’s worth of Reaganite propaganda seeking to discredit the many vital legacies of the New Deal—but the record, as reported by a team of Columbia University researchers, shows that safety net programs caused the actual rate of poverty in the United States to decrease from 26 percent in 1967 to 12 percent in 2012 and, strikingly, that the expansion of protections like unemployment insurance after the 2008 economic meltdown prevented a significant uptick in poverty despite our job-starved, austerity-addled “recovery.” 

Indeed, on closer inspection, the entire centrist Democrat campaign of scaremongering about social spending pales into little more than a pipsqueak’s tantrum. In one bite-sized bit of budget alarmism, Cowen and Kessler complain that in the balmier economic conditions of the 1960s, Washington spent $3 on infrastructure for every dollar it laid out for income benefits like Social Security—and that ratio has now more than reversed, with $5 spent on entitlements for each lousy dollar on infrastructure improvements. But this disparity, which Cowen and Kessler trumpet as a sign of approaching Armageddon, turns out, like so many sky-is-falling spending laments, to be nothing of the sort. The “flipped” ratios here look so startling mainly because two of the main drivers of entitlement spending, Medicare and Medicaid, were not up and running until the late 1960s—i.e. the decade that serves as the baseline of optimal spending comparison for our Third Way shills. The Social Security trust fund, which reliably shows surpluses based on tax receipts and bond revenues, is in precisely no imminent fiscal danger. And Medicare spending, the program most battered by revenue shortfalls, has lately trended below projected outlays by, oh, a half-a-trillion dollars. What’s more, such cost reductions in the program should gain additional momentum as this country finally adopts something like universal health coverage, however slowly and oafishly it elects to do so.

In short, the only livelihoods credibly threatened by expanded spending on income supports are those enjoyed by the likes of Cowan, Kessler and other professional alarmists of the punditocracy. They don’t need to worry much, though, by the looks of things. In the recent ballyhooed bipartisan deal on the federal budget, Congress is gearing up to slash some $25 billion in benefits for the long-term unemployed. Call it the Third Way agenda, or the One Percenters’ rule—it’s all just business as usual on Planet Washington.

Chris Lehmann, a contributing editor of In These Times, is an editor of Book Forum and the Baffler and the author of Rich People Things (Haymarket, 2011). He is now working on a book about American religion and the money culture.

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