Dec 8, 2013
Kucinich Says Obama Got the Deal He Wanted
Posted on Aug 4, 2011
Is the president a bad negotiator, or did he get the deal he wanted all along, as Rep. Dennis Kucinich suggests?
With health care, extending the Bush tax cuts and, now, the debt ceiling deal, President Obama has developed a reputation for giving away the store—but maybe that’s been his intention all along.
On Wednesday’s Truthdig Radio (airs Wednesdays at 2 p.m. on 90.7 KPFK Los Angeles), Kucinich said: “I don’t think the president of the United States ever accepted a deal he didn’t want.”
He also revealed that the compromise to raise the debt ceiling passed more easily than expected in Congress because of an unwillingness among Democrats to further weaken the president.
Listen to the full episode, play individual interviews or continue reading the full transcript below.
Kevin Pollack on prospects for the economy
Virginia Reno on the phony Social Security scare
Peter Friedrich teaches drama in Iraq
Rep. Dennis Kucinich challenges our perception of Obama’s politics
Peter Scheer: Welcome to Truthdig Radio in collaboration with KPFK. I’m Truthdig managing editor Peter Scheer. Today on the show, we hear about teaching drama in Iraq; with social security on the chopping block, Robert Scheer gets a reality check from Virginia Reno; and later, Dennis Kucinich gives us the inside scoop on the debt deal. Stay with us.
Peter Scheer: We’re back with Truthdig Radio. Before we get to the rest of the show, we’re lucky to be joined by Ethan Pollack and Robert Scheer in studio. Welcome to Truthdig Radio.
Ethan Pollack: Good to be here.
Peter Scheer: So, you know, we got word of this debt deal earlier in this week. And we’d heard so much about the debt ceiling, but what we’re really wrapping our heads around this week is the idea that we’ve killed the recovery in the crib, if the recovery was even … had much of a chance to begin with. So, dad, why don’t you kick it off?
Robert Scheer: Yeah. I mean, basically, your pieces have been quite pessimistic—that we’re going after a very small part of the domestic discretionary budget. And I was wondering, they are putting some of the defense budget on the table; does that impress you? Do you think that’s significant?
Ethan Pollack: It certainly could be. We need to remember that, first off, the caps … you know, so the first gauge has broad, top-line discretionary caps. But it only has a firewall between the security and non-security portion of the budget for two years. And I think we should also remember that it will be easier for Congress to—I think just because the military-industrial complex plays a much better inside game than the rest of us little people—and so I think it’ll be … it’s more likely for Congress to break the kind of either defense or security caps than it will be for them to exceed the caps on some of the other levels. So I think generally it impresses me a little bit to see them at least commit to making these cuts, but whether these cuts actually materialize—or at least to the extent that they’re supposed to materialize—I’m a little bit skeptical.
Robert Scheer: Your basic point is that we’re doing exactly the wrong thing, I guess—that we’re not dealing with the recession, we’re not dealing with the job creation, and we’re cutting programs that actually might help counter the recession. Is that still your view after the signing of this debt-ceiling increase?
Ethan Pollack: Absolutely. You know, one of the … the piece talked first about, the immediate job loss in 2012, which would be about—against what would otherwise happen, which we’re not sure—but that this would lower employment by about 1.8 million jobs. And that’s just in calendar year 2012. And then it talks about kind of the impact on cutting public investments, which really just transfers debt to future generations. What we really should be doing is increasing public investments. The cost of financing is so low; generally speaking, it costs more to repair a bridge now than to wait until it’s collapsed and rebuild it. So there’s cost savings there. And then, of course, we need the jobs right now, too. So there’s so many reasons why … the case for more public investments right now is overwhelming, and yet what we’re seeing is Congress moving in the exact opposite direction—not just cutting spending, but cutting spending in ways that actually make us poorer today and poorer tomorrow.
Peter Scheer: We’re speaking with Ethan Pollack of the Economic Policy Institute. You were also a staff economist for President Obama’s National Commission on Fiscal Responsibility and Reform. What was it—what’s the attitude like in the, or the prevailing attitude like in the administration?
Ethan Pollack: You know, I don’t know. The commission was very separate from kind of the administration; the administration took a pretty hands-off approach to kind of the commission’s work …
Peter Scheer: Did you feel like your work was taken seriously?
Ethan Pollack: I think that, you know [laughs], I wouldn’t want to take ownership of the entirety of the fiscal commission package. And if I were in Congress, I would have voted against it. I think that there are certain elements of it that are positive and certain ones that aren’t. And I think that, generally speaking, it turned out … I think it was a centrist package, and I think that the real shame here is that the budget debate has moved so far to the right that, at this point, the fiscal commission’s package is seen as left. Which is really sad, because if anything, it was probably a little bit center-right. And certainly if we had a Republican Party of the early ’90s or ’80s, then I think it would definitely be considered to the right. So I think it more just represents the sign of how much the debate has moved to the right.
Robert Scheer: Speaking of that, there was Richard Nixon, who actually accepted Daniel Moynihan’s idea of a guaranteed annual income for all Americans. Just give us your basic take on this, though: Have we been sold out by this debt-ceiling thing? Because on my reading of it, it looks like they’re not going to really be able to do anything very much about foreclosures, about jobs; we’re pretty much dependent upon the Fed to do it through some kind of quantitative easing, and that hasn’t worked for anybody but the banks. What is your basic summary of where we are?
Ethan Pollack: Again, it’s hard to say. I think that there’s two unknowns here. One is, the administration really hopes that if … that now they can pivot back towards jobs. And they’re going to be pushing an infrastructure bank; they’re going to be pushing an extension of unemployment benefits in the payroll tax holiday. And if they are correct in reading that political mood—I’m a little skeptical about that—but if they are correct, then it might have been at least somewhat worth it. I don’t know. But there might be a silver lining to this, where they actually do get somewhat of a jobs package.
Peter Scheer: We’re going to—sorry, we’re going to have to leave it there. But we’d love to have you on. This is really enlightening. Speaking with Ethan Pollack of the Economic Policy Institute. Thank you for joining us.
Ethan Pollack: Thanks. It was fun having you.
Virginia Reno: Well, people do get confused about Social Security and its relationship to the rest of the budget. In truth, Social Security is the most fiscally responsible part of the entire government. Over its entire life, which spans more than 75 years, it has collected more in revenues than it’s paid out in benefits, and it has large reserves of about $2.6 trillion. So the big deficits that worry policymakers are exclusively in the non-Social Security part of the budget. That’s where the deficits are. Last year, Social Security ran a surplus of about $69 billion; the rest of the budget ran a deficit of nearly $1.4 trillion. So that’s where the deficits are.
Robert Scheer: So what in the world are we talking about with Social Security, a program—I looked at the audit, that most recent audit—that can fund at a hundred percent for the next quarter of a century? There are very few corporations, certainly government agencies, that can make that guarantee. You know, what is this baby boom issue and why is it coming up now?
Virginia Reno: Well, when people lump Social Security into the rest of the budget, they say, oh, look—it’s big. Well, it is big. But it’s also paid for by the American workers and employers who have been paying in over the past 75 years. So it’s big, and it is really a separate kind of social compact between workers, employers and beneficiaries.
Robert Scheer: So is there any issue—as I look at it, they say in the audit that 25 years from now, because of the baby boomer burden, that Social Security will only be able to pay 75 percent, not a hundred percent. And yet you look at the cap—I think the cap right now is $106,000? I may be wrong on that …
Virginia Reno: Yes, that’s the amount of earnings that workers and employers pay a Social Security tax on.
Robert Scheer: So beyond $106,000—even if you make $20 million a year, as some of the investment bankers do—you’re not paying Social Security. So if we have a problem with Social Security 25 years up the road, we could easily increase that cap. And those people probably wouldn’t even notice, much, the increase. Is that … ?
Virginia Reno: Well, certainly one of the most popular proposals on the table is to lift that cap. The only question is, how much? And it is true, if you lift the cap, it simply means that people making above the cap would pay the Social Security contribution—that’s 6.2 percent for workers and employers each—they’d pay it longer during the year. Right now they stop paying as soon as they reach the cap.
Robert Scheer: So this is a nonproblem? I mean … even 25 years from now, it’s a problem that could be addressed by increasing that cap on the wealthier people …
Virginia Reno: That certainly is an option, and even the Bowles-Simpson Commission recommended lifting that cap. And it’s something that could start fairly soon, because it affects a fairly small segment of the workforce; only six percent of workers make more than that cap of $106,000, but it could bring in a big part of the shortfall.
Robert Scheer: Right. And when you say only 6 percent, I mean, 2 percent of income earners have 40 percent of the wealth and 40 percent of the income. So we do have this skewing. There are whole categories of people that are exempt from any Social Security obligation, right? Like hedge fund operators and so forth. Is that another area where we could get funding for this program?
Virginia Reno: Well, Social Security is financed by the taxes levied on earnings and self-employment earnings. And so if people’s income comes in forms other than earnings, wages and self-employment, then that is not subject to the Social Security tax.
Robert Scheer: Yeah. So we could …
Virginia Reno: But one could …
Robert Scheer: Yeah, we could decide to include hedge fund operators.
Virginia Reno: … or income from wealth.
Robert Scheer: Income from wealth, and you know, it’s just a social contribution. The other question I have—you know, I have to tell you, I’m really furious about this because I think there’s so much misinformation. And as a senior myself [laughs]—I’m 75 years old—it is annoying to me to think, you know, I’ve paid in all my life and I’m still paying, because I’m still working …
Virginia Reno: Well, good for you! Congratulations. [laughs]
Robert Scheer: … no, but I mean, people forget—people forget that a lot of us older people are never able to retire. And we have to keep paying. And the other part that drives me crazy is I remember my mother collected Social Security, and I kept thinking, how would I have been able to stay in graduate school if I had to support my mother to that degree? And you know, she’d been a garment worker. And it’s always left out—it’s put as a generational thing. The fact is, if we didn’t have Social Security and if we didn’t have Medicare, the burden would fall on the children of those people, and the grandchildren, to take care of them.
Virginia Reno: Absolutely. Absolutely, and people without children or grandchildren, or with children or grandchildren who didn’t take care of them, would be in dire straits.
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