Is Peter Peterson America's most influential billionaire, or most… (Jin Lee / Bloomberg )
My recent column on Peter G. Peterson, the hedge-fund billionaire who's been pushing deficit reduction via the gutting of Social Security and Medicare, has started a debate over (among other things) the following question: What defines "influence" in Washington?
Among those agreeing that Peterson's influence stems from his billion-dollar funding of pro-austerity think tanks is Ryan Grim of the Huffington Post. The day after my column ran, Grim reported on Peterson's latest multimillion-dollar initiative, the Fix the Debt campaign.
Fix the Debt is chaired by former Pennsylvania Gov. Ed Rendell, a democrat, and former Sen. Judd Gregg of New Hampshire, a Republican -- this sort of D.C. garden-party bipartisanship being a hallmark of the Peterson style. The group is encouraging D.C. lawmakers to cut "entitlements" in return for a modest tax increase. Peterson's other pets include Erskine Bowles and Alan Simpson, whose Bowles-Simpson deficit cutting plan is widely promoted by Peterson-funded groups.
In case you've forgotten, entitlements are Social Security and Medicare, to which you're entitled because you've paid for them during most of your working life.
On the other side of the argument are those who point out that, despite Peterson's years of efforts, Social Security and Medicare haven't been affected. The most incisive expression of this view is by Kevin Drum of Mother Jones, whose piece was headlined "America's most Ineffectual Billionaire."
"Peterson has been a prophet of doom for 30 years now," Drum wrote, "and so far his actual influence on Social Security has been approximately ... zero." (The ellipsis is his.)
Matthew Yglesias at Slate.com makes essentially the same point, calling Peterson "probably the guy who's wasted the most money to the least effect in American political advocacy."
Jonathan Chait at New York Magazine spins this a bit, though I think he's incorrect to say that the "liberal critique" of Peterson is that deficit reduction is wrong -- the critique is that it's wrong to put it all on the shoulders of Social Security and Medicare, and to make it an urgent goal now, when it would sap the economy of stimulus that still needs it.
So is Peterson influential or ineffectual? My argument was that he has certainly shifted the debate in Washington toward the treatment of the deficit as a near-term, urgent problem, and he has put Social Security and Medicare on the table.
Judged against the record of the last half-century, this is a real achievement for Peterson. Social Security benefits never used to be the target of deficit cutters as they they are today -- not even when the program faced a genuine fiscal crisis in 1982. That crisis was resolved by a very slight increase in retirement age and a significant hike in the payroll tax -- but no one questioned whether Social Security was a commitment to seniors we could no longer afford. The political trend was always toward expanding benefits (which is still needed).
Social Security and Medicare may have survived the Petersonian attack so far, but there's no guarantee they will in the near future, and plenty of disturbing signals that they won't.
These programs used to be the "third rail" of American politics; now the Republican presidential campaign is all but based on a platform of rolling them back. You wouldn't have seen that in the past, and you certainly wouldn't have seen it before Pete Peterson began throwing his millions around.