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Obama Packs Debt Commission with Social Security Looters

Obama has filled his new 'debt commission' with Wall Street insiders determined to gut Social Security.

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Obama's deficit commission is actually much older than Conrad-Gregg. Its history as a vehicle for reforming Social Security goes back to 1981, when it was given life under President Ronald Reagan as the Greenspan Commission (guess who chaired it). The commission's first act was to raise Social Security payroll taxes across the board and lower benefits via changes to cost of living adjustments. Bill Clinton revived the commission many times during the '90s, each time with a slightly new name and slightly new members, always stacked to recommend partial privatization, which critics on the left mocked as " a solution in search of a problem." But Clinton thought it politically risky to proceed with its recommendations on his own, and in a little-known chapter to that story, his chief of staff, Erskine Bowles, helped negotiate a secret pact with Newt Gingrich in late 1997 to unite behind the commission's proposals to raise the Social Security retirement age and begin privatization.

The pact collapsed when the Monica Lewinsky scandal broke just days before Clinton was set to announce it. George W. Bush quickly reconstituted the commission in 2001 and adopted its core proposal – Social Security privatization – as the centerpiece to his second-term agenda in 2005. The developing quagmire in Iraq and Bush’s consequent unpopularity gave Democrats, with public outcry behind them, the confidence to unite against it, even though Democratic leaders had supported similar measures in the '90s, and the plan was soon declared dead.

Obama Stacks the Deck

The seasoned networks of money and influence behind the commission's apparent immortality, including "Washington's leading think tanks, the prestige media, tax-exempt foundations, skillful propagandists posing as economic experts and a self-righteous billionaire spending his fortune to save the nation from the elderly," have been outlined by noted economic journalist William Greider, among others. What's received comparatively little attention so far, however, is the composition of Obama's picks for the commission, what interests they represent, and what that reveals about the White House’s own strategy.

While some optimists have predicted that the 14-vote requirement guarantees gridlock, Obama may have already given Republicans the votes needed to put Social Security under the knife.

Starting at the top, the commission's two co-chairs are both veteran Social Security hawks. The Democrat is Erskine Bowles. Described by Business Week in 1998 as "Corporate America’s Friend in the White House," Bowles is president of the University of North Carolina and a venture capitalist with close ties to Wall Street. He sits on the board of Morgan Stanley and General Motors, both of which have received multi-billion dollar government bailouts since the start of the financial crisis. The finance, insurance and real estate (FIRE) sector was by far the largest donor to Bowles in his unsuccessful Senate campaigns in 2002 and 2004, donating over $3 million. His wife, Crandall Bowles, is on the board of JPMorgan Chase, making the couple two of the biggest beneficiaries of the government's financial welfare over the past two years. Crandall Bowles also gave over $14,000 to Obama's 2008 presidential campaign. Both are members of the Business Council, a prestigious association of major CEOs.

Bowles' Republican co-chair, Alan Simpson, is a former Republican senator who pushed (unsuccessfully) for a back-door benefit cut to Social Security benefits in the '90s by tampering with its cost-of-living adjustment and attacked AARP for its defense of Medicare. Simpson's former Senate aide, Chuck Blahous, is a prolific crusader against Social Security and was executive director of Bush's commission in 2001. In a warning sign for Social Security advocates, Blahous and Robert Reischauer, another policy insider who penned a memo in 2009 with fellow Brookings Institution elites calling for Obama to take "action to stem the growth of Social Security and Medicare," were recently nominated by Obama to be Social Security Trustees. (The Blahous pick he apparently owed to Senator Mitch McConnell.)