Governing elites in Washington and Wall Street have devised a
fiendishly clever "grand bargain" they want President Obama to embrace
in the name of "fiscal responsibility." The government, they argue,
having spent billions on bailing out the banks, can recover its costs
by looting the Social Security system. They are also targeting Medicare
and Medicaid. The pitch sounds preposterous to millions of ordinary
working people anxious about their economic security and worried about
their retirement years. But an impressive armada is lined up to push
the idea–Washingtons leading think tanks, the prestige media,
tax-exempt foundations, skillful propagandists posing as economic
experts and a self-righteous billionaire spending his fortune to save
the nation from the elderly.

These players are promoting
a tricky way to whack Social Security benefits, but to do it behind
closed doors so the public cannot see whats happening or figure out
which politicians to blame. The essential transaction would amount to
misappropriating the trillions in Social Security taxes that workers
have paid to finance their retirement benefits. This swindle is
portrayed as "fiscal reform." In fact, its the political equivalent of
bait-and-switch fraud.

Defending Social Security sounds like
yesterdays issue–the fight people won when they defeated George W.
Bushs attempt to privatize the system in 2005. But the financial
establishment has pushed it back on the table, claiming that the
current crisis requires "responsible" leaders to take action. Will
Obama take the bait? Surely not. The new president has been clear and
consistent about Social Security, as a candidate and since his
election. The programs financing is basically sound, he has explained,
and can be assured far into the future by making only modest
adjustments.

But Obama is also playing footsie with the
conservative advocates of "entitlement reform" (their euphemism for
cutting benefits). The president wants the corporate establishments
support on many other important matters, and he recently promised to
hold a "fiscal responsibility summit" to examine the long-term costs of
entitlements. That forum could set the trap for a "bipartisan
compromise" that may become difficult for Obama to resist, given the
burgeoning deficit. If he resists, he will be denounced as an
old-fashioned free-spending liberal. The advocates are urging both
parties to hold hands and take the leap together, authorizing big
benefits cuts in a circuitous way that allows them to dodge the
publics blame. In my new book, Come Home, America,
I make the point: "When official America talks of ‘bipartisan
compromise,it usually means the people are about to get screwed."

The
Social Security fight could become a defining test for "new politics"
in the Obama era. Will Americans at large step up and make themselves
heard, not to attack Obama but to protect his presidency from the
political forces aligned with Wall Street interests? This fight can be
won if people everywhere raise a mighty din–hands off our Social
Security money!–and do it now, before the deal gains momentum. Popular
outrage can overwhelm the insiders and put members of Congress on
notice: a vote to gut Social Security will kill your career. By
organizing and agitating, people blocked Bushs attempt to privatize
Social Security. Imagine if he had succeeded–their retirement money
would have disappeared in the collapsing stock market.

To
understand the mechanics of this attempted swindle, you have to roll
back twenty-five years, to the time the game of bait and switch began,
under Ronald Reagan. The Gippers great legislative victory in
1981–enacting massive tax cuts for corporations and upper-income
ranks–launched the era of swollen federal budget deficits. But their
economic impact was offset by the huge tax increase that Congress
imposed on working people in 1983: the payroll tax rate supporting
Social Security–the weekly FICA deduction–was raised substantially,
supposedly to create a nest egg for when the baby boom generation
reached retirement age. A blue-ribbon commission chaired by Alan
Greenspan worked out the terms, then both parties signed on. Since
there was no partisan fight, the press portrayed the massive tax
increase as a noncontroversial "good government" reform.