Michael Corcoran: Corporate Media Takes a Side in Debate over 'Entitlements'

Originally published at Truthout
Michael Corcoran
March 30, 2011.
Corporate Media Takes a Side in Debate over 'Entitlements'
Pundits and politicians have often said that the thought of cutting Social Security and Medicare are, as Chris Cillizza of The Washington Post described them, the "third rails of American politics. Nobody wants to touch them." This, Cillizza argues, is an unfortunate trend, since chopping these staples to the United States ever-thinning safety net, is the "obvious fix" to our nation's budget problems. "The simple solution is to make cuts to two large government entitlement programs: Social Security and Medicare," he notes.
Despite this often repeated claim that cutting Social Security and Medicare is never discussed in American politics, in reality, the media is relentless in its perpetuation of the myth that cuts to these programs are needed - and right away. In recent months, the media has served to amplify the ideological claims of elites that use the recession - caused by large financial institutions' reckless behavior - as an excuse to further burden the nation's poor and elderly, even as the rich continue to benefit from massive tax breaks and bailouts. The question the media pose is not whether Social Security and Medicare should be cut, but when and how. But there is no debate as to who should sacrifice to balance the budget: the poor and the elderly.
In recent months, especially since President Obama's National Commission on Fiscal Responsibility and Reform released their initial report on deficit reduction and the GOP took over the House, the corporate media has excluded views of labor or working class-people, ignored alternative proposals to cutting these programs - such as various forms of revenue increases, all more popular with the populace - and perpetuated the falsehood that Social Security is in the throes of a deep crisis and is responsible for our budget woes. The idea that those on Wall Street who caused the financial crises - and the extreme revenue shortfalls that followed - should be asked to help pay a little more of their massive profits in an age of historically-low taxation on the rich is, indeed, the true "third rail" in the media.
Corporate Media, Corporate Agenda
To close followers of the economics of the mass media, it comes as no great surprise that the media is effectively serving as a communications arm of corporate America - the media is corporate America. And the corporatization of the media has only grown this year. In a few weeks, media activists will meet in Boston for Free Press's National Conference on Media Reform. Among the major topics to be discussed are the increasing corporate domination of the media; increased consolidation with the merger of NBC and Comcast; the passing of Citizens United, which served to createan effective "stimulus package" for media companies due to increased political ads; the battle over net neutrality, which will determine if corporations will dominate the web at the expense of independent web sites and the attempted desecration of public media, further enabling corporations to control information in the United States.
So, it comes as little surprise that the same media that supported the urgentpassing of the Troubled Assets Relief Program, the most massive example of upward redistribution of wealth in US history, and are currently singing itspraises as an unmitigated success, would then ask for the nation's fiscal woes to be "fixed" on the backs of working-class people.
This sentiment does not merely come from the opinion makers, but the news pages of the major national papers, which continue to perpetuate the myth that Social Security is in crises. Consider the appraisal of New York Times reporter Jackie Calmes, who said Congress was tasked with the "unsustainable combination of fast-growing entitlement programs like Social Security and Medicare and inadequate tax revenues." The Washington Post's news pages, likewise, push the same flawed narrative. Reporter Lori Montgomery concluded that "budget experts say it would be difficult to significantly reduce future deficits without addressing the rising cost of Social Security."
It appears the Post ignored "budget experts" who offered a differing view. For example, the Center for Economic and Policy Research (CEPR) and its co-founder Dean Baker - one of the only economists to predict the housing bubble that the media missed out on - have shown that the program is solvent at least until 2037, giving us decades to tweak policies to make sure those who receive benefits in 2038 get 100 percent benefits.
But, the likes of Baker are rarely given a platform in the US mainstream media, where the expert pundits represent an incredibly narrow range of opinions. On shows such as "Meet the Press," conservative Democrats, such as chairman of the Democratic Leadership Council Harold Ford, often, absurdly, appear on the show as representatives of the left.
Consider the panel discussion on the show after the release of the deficit reduction report. The panel included Newt Gingrich, Alan Greenspan on the right and on "the left," Ford and Vanity Fair's Bethany Maclean (not exactly a modern-day Eugene Debs). Ford used the platform to give right-wing talking points and bash the left. "As long as you don't allow the far left and the far right, again, to crowd out the predominant middle, we can get a lot of this done," he said. "If that means making tough choices on Social Security - I'm 40, I'm willing to give mine up and I think a lot of people my age who may reach a certain income level are willing to do the same."
Host David Gregory was convinced by the wisdom of cuts to entitlements. "I don't see why, for instance, some of these suggestions, Harold, on Social Security are going to be demagogued to death," Gregory said. "Why, in 50 years, people can't look at raising the retirement age and have that be a serious discussion point?"
The Real Social Security Crisis
While the likes of Ford and Gregory may be able to endure cuts to Social Security, statistics show current and future retirees cannot. In fact, the real Social Security crisis is not that the program is insolvent - as noted above, it is in decent fiscal shape - but that the benefits are no longer sufficient to enable many people to live decent lives.
As CEPR reports, "the vast majority of near-retirees will rely on Social Security for the vast majority of their income in retirement," and therefore "cuts in Social Security imply large cuts in income for a population that is already not especially wealthy." The real debate in the media ought to be over how to increase benefits, so we can provide retirees with a dignified life.
Raising benefits should not be viewed as a radical idea. Contrary to media hysteria, Social Security is not reckless overindulgence in social welfare, but rather a modest (relative to other countries) pension program, that could be improved in the richest nation in the world. According to a report from the Organization for Economic Co-Operation and Development (OECD), our federal pension system offers quite meager benefits, compared to other developed nations in the OECD. Social Security accounts for about 16 percent of our total public expenditure, which is lower than about 80 percent of all developed nations.
In fact, there are many changes we can make to increase Social Security benefits - the most obvious of which is to implement more progressive taxation. Currently, Social Security taxes are capped at $106,000. This means that someone making $1 million a year is only paying Social Security taxes on about 10 percent of their income. If we removed the cap, the program would remain solvent for 75 more years, according to theCongressional Budget Office. Another option would be a tax on financial speculation, a modest tax on Wall Street trading that could raise $1 trillion in revenue over the course of a decade.
In fact, Baker estimates that raising Social Security by 25 percent would cost about 1.5 percent of GDP, about 66 percent of which would be covered by a financial speculation tax. To put this into perspective, the increase in defense spending just from 2000 - 2010, accounted for 1.8 percent of GDP. "This seems affordable to me," Baker said in an email.
Indeed, wealthy people can afford the tax. According to a study done by an economist for the Federal Reserve Bank of San Francisco, between 1979 and 2005, mean after-tax income for the top 1 percent increased by 176 percent, while the bottom 20 percent saw an increase of 6 percent only. With the extension of the Bush tax cuts, this trend seems likely to continue. But the idea of raising taxes, even slightly, on the rich is out of the realm of acceptable discourse in the media.
The Real Health Care Crises
Media attacks on Medicare are also fallacious. The general argument portrayed in the media is that the inefficiency of Medicare is causing costs to rise at a fast rate, adding to the deficit and thus, it must be cut. But Medicare is actually more efficient than private health care plans - its cost is rising 8.3 percent annually per beneficiary for Medicare, compared to 9.3 percent for private plans. The increase has a lot to do with the increase of people over the age of 65, not flaws with the program.
But rather than cutting Medicare, as pundits proclaim we must, the media should target on the real villain of the deficit: the exploding health care costs associated with the US's broken private health care system. Public plans such as Medicare are actually more efficient than private plans, since they have considerably less administrative waste. In fact, as this graph shows, if you replaced the US wasteful system - which costs about 17 percent of GDP, almost double of the average developed nation - with any public system from any OECD country, the deficit would be eliminated.
But, as Fairness and Accuracy in Reporting has documented, the narrow ideology of the mass media does not even allow for a discussion of public health care. In a study of news coverage during the debate over federal health care reform, the organization concluded that out of "hundreds of stories" that mentioned health care reform "all but 18 of these stories made no mention of 'single-payer' ... and only five included the views of advocates of single-payer - none of which appeared on television."
The Media Agenda
As noted above, it is neither surprising, nor conspiratorial, to suggest that media companies - owned by large corporations - would produce information that would benefit their own institutions. This is precisely why the increasing corporate stranglehold of the media is such a topic of concern for media activists and why alternative media sources are so crucial to our democracy. The coverage of Social Security and Medicare in recent months is a perfect example of the narrow, ideologically driven agenda of the corporate media that is serving to help the rich dismantle important social programs.