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Unmasking the most influential billionaire in U.S. politics

The most influential billionaire in America is Peter G. Peterson, whose misleading campaign to 'reform' traditional social welfare programs has subtly set the terms of the Washington debate.

October 02, 2012|Michael Hiltzik
  • Peter G. Peterson's views on the federal debt are subtly infiltrating the Washington debate — which is why Americans should start getting worried about him.
Peter G. Peterson's views on the federal debt are subtly infiltrating… (Bloomberg )

Who's the most influential billionaire business figure in national politics?

If you answered one of the Koch brothers (Charles or David) or George Soros, you're wearing your partisan blinders. The former are known for their devotion to conservative causes, the latter to liberal. In either case, you're wrong.

The most influential billionaire in America is Peter G. Peterson. The son of Greek immigrants, Peterson, 86, served as Commerce secretary under President Nixon, then became chairman and chief executive of Lehman Bros. Subsequently, he made his big money as co-founder of the Wall Street private equity firm Blackstone Group.

Peterson doesn't attract venom from the left like the Koch family or bile from the right like Soros. In Washington, he's treated with sedulous respect as a serious thinker about public policy willing to support earnest public discussion with cold cash. His money backs a large number of think tanks across the political spectrum; he has started a news outlet churning out articles about fiscal matters and is funding a high school curriculum aimed, according to its creators at Columbia University, at "teaching kids about the national debt."

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Peterson's views are subtly infiltrating the Washington debate — which is why Americans should start getting worried about him.

He isn't content merely to express concern about the federal deficit. His particular targets are Social Security, Medicare and Medicaid, which he calls "entitlement" programs and which he wants to cut back in a manner that would strike deeply at the middle class.

Many beneficiaries of Peterson grants are, like the high school syllabus, initiatives sounding the alarm on the federal deficit. And although everyone agrees that too much borrowing can be bad for the country, the real question is what to do about it.

It's a measure of Peterson's achievement that for Washington Republicans and Democrats alike, the idea that social insurance programs such as Medicare and Social Security desperately and urgently need "reform" has become a foundation stone of the debate, even though Peterson's evidence can be misleading and his contentions questionable. That points to the question of whose interests Peterson is really promoting when he talks about ratcheting back programs that were designed from their inception as universal benefits.

Peterson hasn't flown entirely under the radar; indeed, some of his beneficiaries have started to play down their associations with him. That's the case with the Comeback America Initiative, an anti-deficit program founded by David Walker, a former U.S. comptroller general who headed the Peter G. Peterson Foundation from 2008 to 2010. A significant portion of the group's budget comes from a three-year $3.1-million Peterson Foundation grant. But when Walker embarked on a nationwide bus tour to sound the deficit alarm, he took pains to insist that Peterson had nothing to do with funding it, even though the tour is running under the Comeback America banner.

The reason: "Pete's a great man, he's done great work, but he's also a lightning rod," Walker told me.

Walker attributes some of the lightning to Peterson's background as a Republican and a Wall Street billionaire. He adds, "Pete's focused on reforming social insurance programs, and that's gotten some elements of the left exercised."

Still, Peterson's influence in national politics stems largely from his ability to make his interests appear eclectic and nonpartisan. That allows intellectuals and luminaries of all political creeds to feel comfortable in the Peterson Foundation's capacious shade, displaying their public spirit as if it's a perk of eminence. The foundation's advisory board includes as members former New York Gov. Mario Cuomo; Facebook Chief Operating Officer Sheryl Sandberg; former Secretary of State George Shultz (a Republican) and former Treasury Secretary Robert Rubin (Democrat); former Federal Reserve Chairman Paul Volcker; and "60 Minutes" correspondent Leslie Stahl.

The foundation's roster of grant recipients has been similarly eclectic: the right-wing Heritage Foundation and the liberal Brookings Institution. The progressive Center for American Progress, the free-market American Enterprise Institute and the pro-union Economic Policy Institute. The independent public interest news organization ProPublica.

It might be churlish to say these organizations have been co-opted by Peterson money; let's just observe that sowing largesse so widely may help ensure that any criticism of Peterson's activities remains respectful and judicious.

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