Progress Report: From the New Deal to the Raw Deal

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Mon, 16 May 2005 08:09:54 -0700

Progress Report: From the New Deal to the Raw Deal

" American Progress Action Fund "

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The Progress Report

by Christy Harvey and Judd Legum with Nico Pitney and Mipe Okunseinde

www.progressreport.org

4/22/2005

 

For news and updates throughout the day, check out our new blog at

ThinkProgress.org.

 

ECONOMY

 

From the New Deal to the Raw Deal

 

Franklin Roosevelt's New Deal promised Americans " cradle-to-grave

security. " Today, President Bush and big corporations are set to

unravel that promise, replacing it with a Raw Deal. Under the guise of

the " Ownership Society, " President Bush is helping companies foist

costs and risk onto American workers. This weekend, the Washington

Post reported the retirement safety net is coming unraveled and, for

many American workers, making ends meet in retirement is going to be a

lot tougher. Economists and financial planners have long compared

retirement security to a three-legged stool comprised of Social

Security, employee pensions and personal savings. Today, thanks to

President Bush and his corporate cronies, all three legs are in jeopardy.

 

LEG ONE – SOCIAL SECURITY: The first leg of retirement security is

Social Security. President Bush's new plan to privatize Social

Security will mean a benefits cut for many Americans. (No wonder so

many Americans are against his plan.) Under the Bush plan, millions of

American workers will see their Social Security checks shrink

dramatically. According to the Center on Budget and Policy Priorities,

under Bush's plan, by 2055, Social Security benefits for medium

earners " would drop 66 percent, or two thirds, compared to the current

benefit structure. " Instead of seeing $1,844 a month, someone making

$36,600 a year would receive a mere $626. The cut is even higher for

middle-class Americans making a little more: under the Bush plan,

workers making $59,000 today will see their Social Security benefits

slashed by 87 percent in 2055. That means instead of a monthly Social

Security check of $2,441, their benefit would be just over $300. (Here

are more details on how the president's plan will hit American workers.)

 

LEG TWO – PENSIONS: The second leg of the retirement stool – pension

plans – is also being sawed off. Traditional pension plans offered

workers guaranteed security in their retirement. As Newsweek points

out, they offered " an income you can't outlive—a critical point as

lives grow long. " But according to the Christian Science Monitor, " The

nation's private pension system is fraying and at risk of unraveling

altogether. " Today only 20 percent of Americans have a traditional,

defined-benefit plan; that's down " 50 percent from just 20 years ago. "

And more and more companies are defaulting on their pension plans.

(For an example of how this works, just look at the United Airlines

fiasco.) Of those plans, " more than 75 percent are underfunded. " When

a plan fails – which 192 did last year alone – it's dumped on the

Pension Benefit Guaranty Corp, the government insurer that's supposed

to guarantee workers some benefits if their company goes under. The

PBGC today is facing a deficit of nearly $30 billion. (American

Progress's Christian Weller has some ideas of ways to fix the pension

crisis.)

 

LEG THREE – PERSONAL SAVINGS: The third leg of retirement security is

personal savings. Americans' personal savings rate was below 1 percent

this year. (Compare that to the 12.3 percent personal savings rate of

1950.) Much of the money Americans make today goes toward breaking

even. People are making less – the American workforce took an

across-the-board pay cut this year when the growth in wages trailed

inflation for the first time in 14 years. The value of the minimum

wage is down; unemployment is up; and more Americans have fallen into

poverty. (For a look at the state of America under President Bush,

check out the Center for American Progress's Quarterly Taxpayer Report.)

 

HEALTH CARE: The squeeze will be particularly intense for employees

who have to spend more precious retirement dollars on their health

benefits. In 1988, 66 percent of companies with more than 200

employees offered health benefits to retired employees; according to

the Kaiser Family Foundation, last year that plummeted to only 36

percent. Employers have cut 5 million workers from their insured rolls

from 2001 alone. And those remaining are stuck with higher bills, as

businesses are passing along expenses by " nearly doubling the amount

that employees must kick in for a typical family plan to $222 a month. "

 

JUDICIARY

 

The Political Grandstanding Continues

 

Senate Majority Leader Bill Frist (R-TN) has spent months threatening

to detonate the nuclear option, a reckless move that would destroy the

centuries old tradition of the Senate filibuster. Late last week,

Frist finally declared that the time is nigh: " Upon completion of

action on the pending highway bill, the Senate will begin debate on

fair up or down votes on judicial nominations. " As expected, Frist

will be leading with two of the most radical nominees: Priscilla Owen

and Janice Rogers Brown. Frist would lead the American people to

believe that he sought out " an appropriate resolution " before being

forced to invoke a move that " no White House and no party in control

of the Senate has ever, ever resorted to … in order to achieve its

goal. " For additional information, check out our Nuclear Option

Resource Guide.

 

REWRITING THE CONSTITUTION: In his most recent statement regarding the

nuclear option, Frist again attempted to rewrite the Constitution to

his own advantage; once again, he claimed a " Constitutional

responsibility … to advise and consent with fair, up or down votes. "

In fact, the responsibility stipulated by the Constitution is simply

to " advise and consent " with absolutely no language – and thus no

mention of " up or down votes " – on how the Senate is supposed to

exercise this duty. Frist knows this to be a fact. Last week on the

Senate floor, Sen. Robert Byrd (D-WV) asked Frist the simple question:

" Does the Constitution accord to each nominee an up-or-down vote on

the Senate floor? " Frist had no choice but to admit: " No, the language

is not there. " (Here are John Podesta and Mark Agrast's ideas on how

the Senate can reclaim its duty to advise.)

 

THE UP OR DOWN VOTES THAT FRIST WON'T ALLOW: Last week, Senate

Minority Leader Harry Reid (D-NV) " offered to help confirm some of

President Bush's blocked judicial nominees from Michigan in an attempt

to stave off [the nuclear option] showdown. " More than just a show of

good faith, the offer demonstrated a commitment to moving forward with

Senate business rather than continuing to be stymied by political

wrangling. Frist not only rejected the offer to get those judges

confirmed but called the proposal " a sham. " Reid, and the rest of

America, was forced to ask: " Do you want to confirm judges or do you

want to pick a fight? "

 

THE NOMINEES THAT AREN'T COMING: Frist and his fellow Senate

conservatives are not the only ones talking one game but playing

another. In full support of the nuclear option, the White House

bemoans the vacancies on the benches; but, thus far President Bush has

refused to help move business forward by sending forth reasonable

nominees to be confirmed. As continually pointed out by Sen. Patrick

Leahy (D-VT), the year is " one-third complete and the president has

sent only one new nominee. 29 other vacancies sit without nominees. "

The White House continues to shout from the political grandstands

while judicial benches sit empty.

 

Under the Radar

 

STATE WATCH – MISSOURI'S PLAN TO KICK 100K PEOPLE OFF MEDICAID:

Missouri Governor Matt Blunt ® is trying to balance the state budget

on the backs of the poor and the disabled. At Blunt's request, the

legislature sent him a budget that " will eliminate Medicaid coverage

for almost 100,000 low-income parents, people with disabilities and

elderly people who receive benefits. " Perversely, " those most affected

will be women who are leaving welfare for work in low-wage jobs and

children in the foster care system. " For instance, " a single mother

with three children would loose coverage if she made more than $300 a

month. "

 

ENVIRO – SCHWARZENEGGER'S ENVIRONMENTAL COLONIALISM: In the Rocky

Mountain West " energy companies have proposed more than two dozen

power plants...that would be fueled by coal -- a high-polluting fossil

fuel that...is a major contributor to global warming. " Now, California

Governor Arnold Schwarzenegger " pledged support for a proposed

1,300-mile electricity transmission line " that would allow power from

polluting plants located in Wyoming, Utah and Nevada to flow into

California. Joe Desmond, the governor's energy advisor claims that all

the plants will be built " will be high-tech plants that get to the

goal of near-zero emissions. " But the San Francisco Chronicle reports

that " [o]f 31 coal-based proposals now in various stages of permitting

processes, none currently plans on using the advanced technology

Desmond mentioned. "

 

CRIME – DEATH PENALTY DATA FLAWED: The AP reports " while state law

requires the collection of data about Ohio's capital punishment

system, the records are incomplete and often wrong. " The flawed data

" makes analysis of that system difficult, countering a goal of

lawmakers who hoped to use the data to make the system as fair as

possible. " Data that was tagged as related to death penalty decisions

included " more than 600 of those were not for death penalty cases. "

Meanwhile " at least 18 capital indictments were not reported to the

court. "

 

CORPORATE POWER – GREENSPAN DEFENDS SARBANES-OXLEY: Sarbanes-Oxley,

the law that was passed to ensure ethical corporate conduct in the

wake of Enron and other scandals, is under attack. The U.S. Chamber of

Commerce says the law damages " the long-term competitiveness of U.S.

companies and the U.S. capital markets and....create burdens on

these companies and their management well beyond...what is needed to

remedy acknowledged abuses. " Federal Reserve Chairman Alan Greenspan

disagrees. Speaking yesterday at the University of Pennsylvania

Greenspan said the law " importantly reinforced the principle that ...

corporate managers should be working on behalf of shareholders to

allocate business resources to their optimum use. "

JUDICIARY – ROVE GUIDED RADICAL JUDGE'S CAREER: Several " crucial

moments " in the judicial career of Texas Supreme Court Justice

Priscilla Owen have been " guided by the hand " of Karl Rove, the New

York Times reports. Indeed, thanks in large part to Rove, the

once-unknown " serial activist " Texas judge is today one of the seven

nominees at the heart of the Senate's battle over the nuclear option.

According to the Times, Rove helped launch Owen's career, selecting

her as a candidate in the course of his 1990s campaign to turn the

Texas Supreme Court into the " business-friendly…stronghold it is

today. " Rove then offered her the services of his consulting firm, and

raised nearly $1 million for her campaign. Later, Rove would overrule

then-White House counsel Alberto Gonzales in choosing Owen as one of

President Bush's very first appeals court candidates.

GOOD NEWS

Wal-Mart will apologize for " a recent newspaper advertisement that

equated a proposed Arizona zoning ordinance with Nazi book-burning, "

calling the original funding decision a " 'terrible' mistake. "

DON'T MISS

IRAQ: " How the 'tough guys' made America weak "

HEALTH: What does Iraq terrorist al-Zarqawi have to do with STDs?

ENVIRO: How the EU is doing the job the EPA won't

MEDIA: PBS legend Bill Moyers puts on his boxing gloves

DAILY GRILL

" [A]n all-Democratic congressional delegation would have little

political influence if President Bush is elected to a second term …

[then-Senate Minority Leader Tom] Daschle's role as leader of Bush's

opposition would be a 'terrible liability' during a round of base

closures. " – Case being made by Jim Thune (R-SD) as to why he could do

a better job than Daschle in protecting Ellsworth Air Force Base in

South Dakota, 10/27/04

VERSUS

" Ellsworth in South Dakota on military base closure list " – Headline,

5/16/05

DAILY OUTRAGE

The Saudi company SABIC, leading maker of the potentially

cancer-causing gasoline additive MTBE, spent over a million dollars

lobbying Congress to limit its liability for damages caused by the

chemical. The House of Representatives delivered.

© Copyright 2005 by American Progress Action Fund. All rights reserved.