Peter G. Peterson is on a crusade to end Social Security as we know it, and he’s spread his tentacles throughout the media.
Peterson, investment banker and co-founder of the Blackstone Group, is also a co-founder of the Concord Coalition, a trustee of the Committee for Economic Development and a board member of the Committee for a Responsible Federal Budget. Peterson has long been a corporate media favorite (Extra!, 3-4/97), but since 2008, he’s also poured money into making his own media—via his Peter G. Peterson Foundation, a $1 billion behemoth dedicated to “fiscal sustainability issues related to federal deficits, entitlement programs and tax policies.”
The Peterson Foundation is behind IOUSA, the scaremongering documentary about the national debt and the need to cut entitlement programs. CNN (1/10-11/09) broadcast a shortened version of the video along with a panel discussion including Peterson himself, in order, as CNN anchor Ali Velshi put it, to answer “important” (and certainly not in any way biased) questions like, “Is it fair to expect our grandchildren to pay for the money that this generation has spent?”
Peterson’s foundation produced a sequel, IOUSA: Solutions, which CNN eagerly aired as well (4/10-11/10), again organizing a panel discussion composed of two CNN correspondents and six deficit hawks; four of the eight were directly affiliated with Peterson projects (including Peterson himself).
The Fiscal Times, a for-profit news outlet funded by Peterson, brought the billionaire’s media dealings into the spotlight, when the Washington Post (12/31/09) published a Fiscal Times piece on its front page as part of a content-sharing deal with the outfit. The “news” article, headlined “Support Grows for Tackling Nation’s Debt,” took it as a given that the “tough decisions that will be required to dig the nation out of debt” include “painful spending cuts and tax increases”—and “spending” referred to the “skyrocketing spending on Medicare, Medicaid and Social Security,” not the $663 billion military budget.
The Fiscal Times piece failed to include any perspectives counter to its patron’s position, and also managed to plug the Concord Coalition and the Peterson-Pew Commission on Budget Reform without noting that both groups are also funded by Peterson. (The Post later appended a note to the web article saying that it should have acknowledged the tie to Concord.)
Peterson’s foundation has also directed money to ProPublica, the nonprofit investigative reporting outfit, and WorldFocus, a PBS international news program that recently ended. According to the New York Times (2/4/09), “the foundation expected Worldfocus to produce reports examining how other countries have dealt with the challenges facing the United States, like healthcare and Social Security reform.”
Even the Columbia Journalism Review (1/25/10) now boasts a Peterson fellow “covering news media coverage of economic and fiscal policy” in order to, among other things, “encourage the press to explore the national debate over the federal budget, the national debt, entitlement programs and taxes.”
The reason that these blatant conflicts of interest are seen as acceptable in corporate media circles is that Peterson’s anti-entitlement mania is not seen as a bias. It’s viewed as akin to funding anti-cancer research—rather than a political effort that would have the effect of shifting vast amounts of wealth from the middle class to Pete Peterson’s class.
But this only reflects the narrowness of corporate media’s coverage of the issue, which takes as given ideas that ought to be subject to debate: that, though the deficit is “gargantuan,” only “non-defense” spending should be on the table, and that Social Security has to be raided to be saved (See sidebar.) If these questions were debated more openly, the fact that proponents of one side are buying more and more voice would raise greater alarm.
Research assistance: Daniel de Corral.
Protecting the Wealthy by ‘Saving’ Social Security
Social Security is funded by the payroll tax, which is capped at just over $100,000. This means that it’s a regressive tax: Upper-income people pay a far lower percentage of their earnings in to Social Security than lower-income people. Someone who makes millions every year—like, say, Peter Peterson—pays the same amount in Social Security taxes as someone with one-tenth the income.
In the 1980s, Social Security taxes were raised and benefits cut in the name of covering the retirement of the Baby Boomers—and, not incidentally, so that the system could loan its surplus to the Treasury Department to cover for Ronald Reagan’s income-tax slashing (Extra!, 1-2/88; Nation, 3/2/09). That money was to be paid back to Social Security with interest, just like any other government debt.
If Social Security benefits are cut again so that the Treasury won’t have to pay back the money it owes, that would amount to a massive fraud and transfer of wealth, as trillions of dollars specifically collected to pay for workers’ retirement benefits would never be used for that purpose, and instead would merely have transferred the cost of government from progressive income taxes to the regressive payroll tax (Center for Economic and Policy Research, 1/27/05).