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Noted.

John Nichols on the immediate threat to social security, Kate Murphy on opening up the FM airwaves and Braden Goyette on this year's outrageous CEO bonuses.

Various Contributors

December 22, 2010

A THREAT TO SOCIAL SECURITY? The debate over President Obama‘s deal with Senate Republicans to extend Bush-era tax cuts—in exchange for an extension of unemployment benefits—rarely got below the surface for many in the media and in the political class. But there’s a reason the most ardent critics of the agreement, which won Congressional approval after major arm-twisting by the administration, were opposed to the bitter end. They were not just worried about tax policies that extend the gap between rich and poor and embrace supply-side Reaganomics; they were specifically concerned about the future of Social Security.

The deal cuts the Social Security payroll tax paid by workers for a year, which means that the government would have to borrow $112 billion to make up the loss. According to a statement from the office of Oregon Congressman Peter DeFazio, who led the revolt against the agreement in the House Democratic Caucus, “This sets a dangerous precedent that opens Social Security up to attacks from those seeking to dismantle or privatize it, and is not the type of investment that will create jobs or put people back to work.” “At the end of 2011, the Republicans will insist on extending the payroll tax holiday,” DeFazio predicts, “and to pay for the extension, it’s likely they will demand cuts in Social Security benefits.”

All of this comes at a point when Social Security is already in the cross hairs. Incoming House Budget Committee chair Paul Ryan has made no secret of his desire to begin the process of privatization, and the president’s deficit commission has outlined proposals that could—if Obama’s State of the Union address embraces them, as the commission co-chairs hope—set the stage for a brutal debate over the program’s future. DeFazio is right when he warns that this is “the first time in seventy-five years, since President Roosevelt created Social Security, that opponents of the program are poised to undo the New Deal and turn it into a raw deal for America’s seniors, the taxpayers and working men and women.” Progressives had better be ready to wage—and win—this fight. JOHN NICHOLS

POWER TO LOW-POWER FM: While much ink has been spilled about the repeal of “don’t ask, don’t tell,” there was another important and hard-fought progressive victory on December 18: Congress passed the Local Community Radio Act. Congress authorized low-power FM (LPFM) radio service in 2000, but restrictive legislation backed by big broadcasters and media lobbyists was passed soon after. The Radio Broadcast Preservation Act of 2000 introduced limitations that made it extremely difficult for new LPFM stations to receive approval. Supporters of the bill claimed LPFM stations would cause interference on high-power FM signals, a claim wholly disproved by a Congressionally mandated and taxpayer-funded study in 2003.

The Local Community Radio Act repeals this legislation, reopening the airwaves to schools, civil rights groups, churches, sources of local music and culture and more. Candace Clement of Free Press, a nonprofit media reform organization, noted that “the Local Community Radio Act will make it possible for hundreds, if not thousands, of new local radio stations to go on the air.”

The bill received bipartisan support, from Pennsylvania Democrat Mike Doyle and Nebraska Republican Lee Terry in the House and Washington Democrat Maria Cantwell and Arizona Republican John McCain in the Senate. President Obama‘s signature on the bill will mark the end of a ten-year struggle to democratize radio and the beginning of a new chapter for low-power advocates.

Hannah Sassaman, a longtime organizer with the Prometheus Radio Project, an organization that has fought for noncommercial radio since 1998, said of the victory, “It’s humbling to understand that new young people will gain a love of telling stories at the working end of a microphone or at home listening to their neighbors. And it’s powerful to know that these stations will launch leaders in every walk of life to change their communities, and this country.” KATE MURPHY

OUTRAGEOUS FORTUNES: CEO bonus season is approaching, and despite a 
9.8 percent unemployment rate, record-breaking poverty figures and more than 
1 million expected foreclosures, top executives are raking in breathtaking sums. Some, like Yahoo’s Carol Bartz, are doing so while laying off hundreds of employees just in time for the holidays. Bartz earned more than $47 million in total compensation in 2009, and she fired 600 employees on December 14 to “position Yahoo for revenue growth.” According to the AFL-CIO‘s calculations, her salary, bonus and other perks could support 3,131 minimum-wage earners, or 1,473 average workers.

According to a September report from the Institute for Policy Studies, executive salaries are soaring across the board, with average CEO pay clocking in at double the 1990s average. The IPS also found that the highest-paid CEOs are the ones who are firing the most people. Schering-Plough’s Fred Hassan, for instance, made about 
$50 million in 2009 and laid off 16,000 people between November 2008 and March 2010. American Express’s Kenneth Chenault made $16.8 million in total compensation last year; the company has fired 4,000 people over the past two years while receiving nearly $3.4 billion in federal bailout money.

It hurts even more when the people earning these kinds of figures are the same ones who helped create the economic crisis. Bloomberg News predicts Goldman Sachs CEO Lloyd Blankfein is on track to receive a $24.3 million bonus in stock in January, based on share prices—even though, as Robert Scheer puts it, “Goldman Sachs stands accused of selling dubious derivatives that concealed enormous government debt,” and sent the global economy into a tailspin. Bank of America president of global banking and markets Thomas Montag made $30 million in 2009; now Arizona and Nevada are suing the bank for foreclosure fraud. BofA laid off 35,000 people between November 2008 and March 2010.

Even the heads of companies that are slacking on their bailout repayments are cashing in big. In 2009, AIG CEO Robert Benmosche made $2.7 million. ProPublica recently dubbed his company the biggest TARP black hole: the insurance giant received $47 billion from the Treasury and $81 billion from the New York Fed, none of which has been paid back. BRADEN GOYETTE

Various Contributors


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