Peter George Peterson, a billionaire Wall Street executive, recently died at age 91. Leading members of the party that founded Social Security may be mourning him a bit too much.
Peterson was known as the former chairman and CEO of Lehman Brothers between 1973 and 1985, before founding the Blackstone Group — the largest alternative investment firm in the world, managing more than $434 billion in total assets as of last year. However, what may be Peterson’s most significant legacy is his passionate lobbying for gutting the American social safety net. Forbes estimated Peterson’s net worth at roughly $2 billion.
Given Peterson’s reputation as a diehard fiscal hawk who spent roughly half a billion dollars lobbying for cuts to programs that working-class retirees depend on, Leading Democrats’ eulogies are more than a little disheartening. After Peterson’s death, former President Bill Clinton called Peterson a “brilliant businessman, principled public servant, committed philanthropist, great friend and profoundly good man” in a statement posted to the Clinton Foundation website. He characterized Peterson’s aggressive lobbying as an endeavor to “involve young Americans in meeting our long-term challenges.”
Additionally, House Minority Leader Nancy Pelosi (D-California), who is widely viewed as the front-runner for Speaker of the House should Democrats retake control of the House of Representatives in the 2018 midterms, issued a statement calling Peterson a “clarion voice for fiscal responsibility,” adding that his “prophetic voice on the unsustainable trajectory of the debt was invaluable for generations of policymakers on both sides of the aisle.”
Here's a Pelosi statement on the death of Pete Peterson. The Peterson deficit hysteria events were always fully bipartisan. pic.twitter.com/Vl8iYEEIxv
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Since its inception, the Peter G. Peterson Foundation has been on a mission to cast America’s leading social safety nets — Social Security, Medicare, and Medicaid — as in a state of emergency, requiring steep cuts in order to assure their future solvency.
On the Peterson Foundation’s website, one of the policies it proposes is raising the retirement age to 67, as well as capping cost-of-living increases in Social Security. This means the already modest payments the program makes to retirees would have progressively less spending power over time, even as retirees’ taxes increase:
“Many economists believe that Social Security currently uses an index that overstates inflation, so benefits grow faster than the true cost of living. They propose replacing the current index with chained-CPI, which is a more accurate measure of inflation.”
It’s important to note that Peterson’s depiction of the Social Security fund as unsustainable is flatly untrue. Even though Social Security is capable of fully paying out benefits until 2035, extending its lifeline beyond that threshold doesn’t have to come at the cost of stiffing retirees.
As Senator Bernie Sanders (I-Vermont) proposed on his 2016 campaign website, lifting the current pay-in cap of $118.500 to $250,000 — meaning the richest Americans would pay a little bit more than working-class Americans to ensure the sustainability of the program — Social Security would be solvent for another 50 years, and would even be able to pay out more money in benefits to seniors.
Removing the cap entirely, thereby subjecting all income earners to a flat 12.4 percent payroll tax, would ensure the program’s solvency for another 75 years, meaning today’s high school students would still be able to retire comfortably well into their eighties. The below chart from the Center on Budget and Policy Priorities (CBPP) shows that this tax increase would only seriously impact the top tenth of the top one percent of Americans, who saw their incomes grow by more than 300 percent between 1980 and 2015:
President Franklin Delano Roosevelt, the longest-serving president in American history, would likely be rolling in his grave at the eulogies Pelosi and Clinton gave to a billionaire who made his life’s work undermining that program. FDR’s intention when signing the Social Security Act into law in 1935 was that seniors should never have to go into poverty upon retirement. If Peterson’s proposals ever became law, that would almost assuredly happen.
“We put those payroll contributions there so as to give the contributors a legal, moral, and political right to collect their pensions and their unemployment benefits,” FDR said in 1941. “With those taxes in there, no damn politician can ever scrap my Social Security program.”
With all due respect to Peterson’s family, the late billionaire’s lobbying for cuts to Social Security and Medicare was harmful and based on misleading arguments. Democrats should refrain from lionizing someone with unimaginable wealth who made it his mission in life to make sure working people had to make do with even less.
Carl Gibson is co-publisher of Grit Post. His work has previously been published in The Guardian, The Washington Post, The Houston Chronicle, Al-Jazeera America, and NPR, among others. Follow him on Twitter @crgibs or send him an email at carl at gritpost dot com.