From NBC's Ali Weinberg
The spate of criticism toward members of President Obama's debt-reduction team continued today as a group of progressive economists claimed that a one-day "fiscal summit," reflects the undue "Wall Street" influence of the summit's host, former investment banker and New York Fed chairman Peter G. Peterson, over the White House's economic policy.
As First Read reported earlier today, Grover Norquist's conservative group Americans for Tax Reform yesterday questioned the anti-tax bona fides of former Sen. Alan Simpson (R-WY), who chairs Obama's Commission on Fiscal Responsibility and Reform with Erskine Bowles, accusing him of, among other actions, voting for a Social Security tax increase while Ronald Reagan was president.
Today, both Simpson and Bowles got heat from the left, as economists on a call organized by the liberal think tank Campaign for America's Future (CAF), criticized them for steering Obama's debt commission in a "dangerously conservative direction," focusing more on cutting the deficit through Medicare and Social Security reductions than medium-term goals of restoring the economy to its pre-recession levels of employment and revenue.
"The White House commission and Peterson's conservatives could cause the President and Congress to pivot away from job creation and stimulus even as the economy remains fragile," which would be "disastrous both economically and politically," CAF's co-director Roger Hickey warned on the call.
"If you put the cart before the horse and emphasize deficit-reduction first, it's a more painful way to get the budget balanced," added Robert Kuttner, co-founder and editor of the American Prospect.
Kuttner also said that Peterson's wealth and exposure through his epononymous foundation afforded him a strong voice in the debate on economic recovery, especially when some members of the commission are already sympathetic to his views.
"The Pete Petersons of the world have the megaphone and the conventional wisdom, even intimidated president of the United States that he has to have [Peterson's] version of fiscal austerity," Kuttner said.
Peterson, a co-founder of the Blackstone investment firm and former New York Fed chairman, was also Secretary of Commerce in 1972 under President Nixon, and served on economic advisory panels during the Ford and Clinton administrations. He convened the summit through his epononymous foundation with the goal of fostering a "national bipartisan dialogue on America's fiscal challenges," according to the foundation's website.
The summit's roster includes former Fed Chairman Alan Greenspan, Sen. Judd Gregg (R-NH) and Rep. Paul Ryan (R-WI), and President Clinton's Treasury secretary Robert Rubin. Hickey said that the summit's very guest list demonstrates Peterson's attempts at exerting influence over the Obama administration.
"Rubin presided over the deregulation of Wall Street and the orgy of speculation and fraud that brought the financial system crashing down," Hickey said. "The Wall Street billionaires who activiated financial deregulation, who created the fiscal crisis, are gathering tomorrow to lecture senior citizens and the rest of us about the need to tighten our belts and slash Social Security and Medicare," he added.
Today's conference call fell on the same day that the deficit commission began its work. At opening remarks today, President Obama stressed that the commission would not fall prey to "special interest pressures, to the pull of local concerns, and to the reality familiar to every single American -- it's a lot easier to spend a dollar than to save one."
Obama continued, "We're not playing that game. I'm not going to say what's in. I'm not going to say what's out. I want this commission to be free to do its work."
Later toward the end of the meeting, Simpson lambasted critics on the right who have accused the commission of being "a stalking horse for taxes," saying that he and Bowles are only "stalking horses for our grandchildren" and that he has never been the favorite of the extreme wing of his party.
In remarks geared to reflect the difficulty of reaching a bipartisan consensus on deficit reduction, Simpson had criticism for both parties, who he said "have done nothing to stem this unstemmable tide. I was in the Senate for 18 years and the cry to me was always: Al, go bring home the bacon. Well, the pig has died."