Here we go again with former Sen. Alan Simpson slamming his fists on the table, demanding that our politicians agree to make some form of "grand bargain" later this year and berating Republicans for their fear of Grover Norquist coming after them if they aren't loyal to his anti-tax pledge.
As Ross Eisenbrey reminds us this week, Simpson is no hero when it comes to his plans for our social safety nets: Alan Simpson isn’t ‘saving Social Security’:
Alan Simpson is at it again. Launching another off-color attack on people who oppose the Bowles-Simpson plan to bomb Social Security in order to save it, Simpson claims he is saving it for young people who would otherwise be “gutted.” In fact, Simpson’s overarching desire to protect rich Americans from paying their fair share of Social Security taxes (if wealthy earners paid FICA taxes on all of their income, most of Social Security’s solvency problems would be solved) leads him to propose cuts in Social Security almost as large as the automatic benefit reductions that will occur in 2033 under current assumptions.
According to an analysis of the Bowles-Simpson plan by Social Security’s chief actuary, middle-class workers with average earnings over the course of their careers (around $43,084 in 2010) would see a 22 percent cut in benefits by 2080, not significantly different from the 23.5 percent cut in benefits these workers would face if nothing were done to shore up Social Security’s finances. Our children and grandchildren will lose critical benefits under Simpson’s plan, while seniors like him are mostly protected.
Notwithstanding Simpson’s crocodile tears for young people, under the Bowles-Simpson plan, if someone who is born in 2015 retires at age 65 with a middle-class income in 2080, Social Security will replace only 28 percent of their pre-retirement earnings. By contrast, a 65-year old who retired in 1980 replaced 49 percent of pre-retirement earnings. It is Simpson himself who wants to gut the Social Security of coming generations.
That didn't stop CNN's Fareed Zakaria from treating Alan Simpson and his fellow commission head Erskine Bowles as some sort of heroes during his interview with them this Sunday. If they really wanted to make sure Social Security remains solvent, as Ross noted, they'd lift the income cap instead of using the hole they blew in the budget with the Bush tax cuts and two wars they refused to pay for as an excuse to gut our social safety nets.
ZAKARIA: Who better to talk about this than Alan Simpson and Erskine Bowles who are joining me now from North Carolina?
Thank you so much for joining me, folks.
SIMPSON: It's a pleasure.
BOWLES: Great to be here.
Senator Simpson, you've seen what's been going on these last few months. The House actually voted on the Simpson-Bowles proposal and it went down decisively.
Paul Ryan, the leader of the House on fiscal issues, I suppose, said that Simpson-Bowles was the wrong way to go because there weren't enough spending cuts and there were too many tax increases.
What was your reaction? That's your party.
SIMPSON: Well, I think my party and I have different views on a lot of things. I guess I'm known as a "rhino" now, which means a Republican in name only because I guess of social views perhaps or common sense would be another one which seems to escape members of our party.
Abortion is a horrible thing, but, for heaven's sakes, a deeply intimate and personal decision and men legislators shouldn't even vote on it. Gay-lesbian issues, we're all human beings. We're all God's children. What is that?
And for heaven's sakes, you have Grover Norquist wandering the Earth in his white robes saying that if you raise taxes one penny, he'll defeat you. He can't murder you, he can't burn your house, the only thing he can do to you, as an elected official, is defeat you for reelection.
And if that means more to you than your country when we need patriots to come out in a situation when we're in extremity, you shouldn't even be in Congress.
ZAKARIA: But talk about Ryan particularly, because what I'm struck by is the Simpson-Bowles plan calls for an awful lot of spending cuts and, yet, those weren't enough.
SIMPSON: Well, Erskine can tell you we don't call for -- You can't cut spending your way out of this hole. You can't grow your way out of this hole and you can't tax your way out of this hole "Put that in your pipe and smoke it," we tell these people.
This is madness. If you want to be a purest, go somewhere on a mountain top and praise the east or something, but if you want to be in politics, you learn to compromise and you learn to compromise an issue without compromising yourself. Show me a guy who won't compromise and I'll show you a guy with rock for brains.
ZAKARIA: Erskine, you're hopeful. You think that some of the ideas gaining fraction and, you know, there's a kind of inevitability if you're going to do this, there has to be some approach that's pretty close to what you're describing.
BOWLES: Fareed, I believe the markets will force us to. I've spent my life in the markets, as you know, and look at what's happening at the end of the year.
We have about $7 trillion worth of economic events that are happening. We have expiration of the Bush tax cuts, we have the patch that's been placed on the alternative minimum tax that'll affect so many middle-class taxpayers, we have the payroll tax deduction that's expiring.
We have these senseless, mindless, across-the-board cuts that come from the sequester that comes as a result of a failed super committee. You know, all of those are hitting at once and the economic effect of those just next year, about 2 percent of GDP.
If we have a negative effect of 2 percent of GDP, we'll be right back in recession and you better believe that the people of America will be calling on these members of Congress to do something.
So we think something will happen in the lame duck session. We believe it'll probably be a two-step process where we end up setting up a framework with a time-frame in order to get something done.
ZAKARIA: Boy, that's pretty optimistic.
BOWLES: And don't forget it doesn't have to be exactly what the Simpson-Bowles plan has, but it's got to be a balanced plan. You've got to have some small amount of revenue that comes from reforming the tax code and there's broad agreement that the tax code needs to be reformed.
So I believe that you will find -- if, in fact, we can get the right kind of momentum going, I think I'll find strong support. We've been working with 47 members of the Senate, an equal number of Republicans and Democrats, the same kind of group in the House of Representatives.
And I believe these -- this group will come together during the lame duck to put forward a plan like this. Now, I don't think the plan itself will be implemented during the lame duck, but I think there will be an agreement that we have to do some kind of balanced plan.
If we don't, then I think you will see the markets really take a really adverse look at the country and I think you'll see us lose another downgrade in our credit and I think you'll see interest rates pop up and, before long, you'll see the availability of credit lessen. So I think we could have a real problem if we don't do something and do something relatively quick.
SIMPSON: And you know who will get hurt the worst in that process when interest rates go up and inflation kicks in, the little guy, the one that everybody on their hind legs talks about, "We're doing this for the little guy, the most vulnerable, the unfortunate." Well, Merry Christmas, those guys are going to get eaten when interest rates and inflation kicks in.