Public Policy War Unfolding
Peter G. Peterson, former Commerce Secretary under Richard Nixon and co-founder of the Blackstone Group, has been a substantial beneficiary of the free-enterprise system. In June 2007, Blackstone became a pubic company while attracting over $4.13 billion in its initial stock sale and ballooning the company market value to $33 billion. The company also enjoyed a lucrative tax break, being taxed at 15% (the partnership rate) rather than at 35% (the corporate rate). Peterson allocated $1 billion of his wealth to form the Peter G. Peterson Foundation, with Peterson, his wife and his son as sole directors.
The foundation’s agenda covers many issues confronting contemporary America, including nuclear arms proliferation, but the issue of greatest emphasis is the nation’s impending entitlement funding crisis.
To fight this public policy battle, Peterson hired David Walker, the then-acting Comptroller General of the United States, to become the new CEO. Walker has a history of speaking out against federal deficits. As the nation’s chief accountant, Walker has earned a respected reputation with some bipartisan, both-sides-of-the- aisle overtones. Appointed by President Bill Clinton, Walker began the 15-year job after successful ratification by both houses of Congress, and continued through most of George W. Bush’s terms of office until February 2008.
The first priority of the new foundation is to release an independent film and publish a book entitled I.O.U.S.A. Inspired by the enormous success of former Vice President Al Gore’s environmental movie, An Inconvenient Truth, Peterson and Walker hope to stir the public debate about entitlements in the same manner that Gore successfully positioned environmental degradation and irreparable climate change as one of today’s most discussed public policy issues.
In 2006, another pubic policy group formed. Americans for Generational Equity advances “public understanding of the stakes of younger and future generations in pending changes to the social contract, which will occur as America accommodates the baby boom generation’s retirement.” Its board president is Richard Lamm, former three-time Governor of Colorado and a vocal critic of entitlement programs as “fiscal child abuse.” In mid-June 2008, AGE held a forum in Washington D.C, entitled YES — Youth Entitlement Summit. The Summit created a context to develop youth leadership around entitlement issues, driven by the underlying ideological framework that entitlements represent enormous fiscal threats to future generations.
The Concord Coalition is another public policy institution sharing goals similar to AGE: a nationwide, grass roots organization advocating generationally responsible fiscal policy. The Coalition has been sponsoring the Fiscal Wake-Up Tour, “a series of public forums around the country designed to focus attention on our nation's daunting long-term fiscal challenges.” These allegedly bipartisan forums, starring David Walker and Bill Bixby, Coalition executive director, have provided rich visual fodder for I.O.U.S.A. camera crews to capture raw video for their movie. Pete Peterson helped start the organization in 1992, along with the late former senator Paul Tsongas and Senator Warren Rudman.
Another major contributor in the anti-entitlement fraternity is Laurence Kotlikoff, Boston University economics professor and author of The Coming Generational Storm — What You Need to Know about America’s Economic Future. Kotlikoff provides the intellectual underpinning and academically grounded theories upon which acolytes often draw their proof of fiscal disasters besetting the nation.
In this book, Kotlikoff offers a number of recommendations for addressing his perceptions of the fiscal challenges of Social Security. His most dramatic proposal is to eliminate the Old Age Insurance component of Social Security and replace it with equivalent compulsory contributions to PSS (Personal Security System) accounts. How would these accounts be managed? By investing them “in a single market-weighted global index fund of stocks, bonds, and real estate.” In other words, everyone gets to play in the financial markets.
Do you want to be wealthy? Make sure Kotlikoff's proposals become law, and then be sure you're leading for one of the private-sector investment companies who will service and oversee these investments, handing taxpayers their transaction costs.
Comments