February 24, 2020 by The Hill, by Diane Archer
No matter how you design a single-payer public health insurance system, it would have lower overall health care costs, so long as for-profit private health insurers no longer exist to drive up health care costs.
Sen. Elizabeth Warren, D-Mass., speaks during an event to introduce the Medicare for All Act of 2017 on Capitol Hill on Sept. 13, 2017. (Photo: Yuri Gripas/Reuters)
The evidence abounds: A Medicare for All single-payer system would guarantee comprehensive coverage to everyone in America and save money.
Christopher Cai and colleagues at three University of California campuses examined 22 studies on the projected cost impact for single-payer health insurance in the United States and reported their findings in a recent paper in PLOS Medicine. Every single study predicted that it would yield net savings over several years. In fact, it’s the only way to rein in health care spending significantly in the U.S.
All of the studies, regardless of ideological orientation, showed that long-term cost savings were likely. Even the Mercatus Center, a right-wing think tank, recently found about $2 trillion in net savings over 10 years from a single-payer Medicare for All system. Most importantly, everyone in America would have high-quality health care coverage.
Medicare for All is far less costly than our current system largely because it reduces administrative costs. With one public plan negotiating rates with health care providers, billing becomes quite simple. We do away with three-quarters of the estimated $812 billion the U.S. now spends on health care administration.
Administrative costs are so high because thousands of insurance companies individually negotiate benefit rules and rates with thousands of hospitals and doctors. On top of that, they rely on different billing procedures – and this puts a costly burden on providers.
Administrative savings from Medicare for All would be about $600 billion a year. Savings on prescription drugs would be between $200 billion and $300 billion a year, if we paid around the same price as other wealthy countries pay for their drugs. A Medicare for All system would save still more with implementation of global health care spending budgets.
Even more savings are possible in a Medicare for All system because, like every other wealthy country, we would have a uniform electronic health records system. Such a system generates additional savings because system problems would be easier to detect and correct. A uniform claims data system helps reduce health care spending for fraudulent services. In 2018, total US health care costs were $3.6 trillion, representing 17.7 percent of GDP.
Savings are in part a function of the benefits Medicare for All covers. The Mercatus report and others projected savings, even with the elimination of deductibles and out-of-pocket costs. Under both Sen. Bernie Sanders‘ (I-Vt.) Medicare for All bill and Rep. Pramila Jayapal‘s (D-Wash.) Medicare for All bill, patients would not pay deductibles or coinsurance when they receive medical care. Their bills also provide for vision, hearing and dental care, as well as long-term services and supports, such as home care and nursing home care.
No matter how you design a single-payer public health insurance system, it would have lower overall health care costs, so long as for-profit private health insurers no longer exist to drive up health care costs. Yes, it’s true that some other wealthy countries rely on “private insurers” to provide benefits and spend far less than we do on care. But, these insurers do not operate in any way like health insurers in the U.S.
Other wealthy countries dictate virtually every element of the health insurance people receive, including what’s covered, what’s paid, and people’s out-of-pocket costs—all identical for everyone. The insurers operate like claims processors or bill payers. They follow the coverage and payment rules set by the government, nothing like the private health insurers in the U.S. which revel in product diversity (read: complexity and confusion).
And, if you’re thinking that having the federal government guarantee coverage to all Americans is a big deal, it’s actually not. The government already pays for about two-thirds of health care costs. Among other things, it pays for Medicare, Medicaid, VA, TriCare, and a wide range of state and local health care programs, along with private insurance for government employees and tax subsidies for private insurance.
Whether you call it single-payer or Medicare for All, it isn’t some socialist pipe dream. It’s a sensible, efficient, and effective way to guarantee excellent health insurance to everyone.
Diane Archer is president of Just Care USA, an independent digital hub covering health and financial issues facing boomers and their families and promoting policy solutions. She is the past board chair of Consumer Reports and serves on the Brown University School of Public Health Advisory Board. Ms. Archer began her career in health advocacy in 1989 as founder and president of the Medicare Rights Center, a national organization dedicated to ensuring that older and disabled Americans get the health care they need. She served as director, Health Care for All Project, Institute for America’s Future, between 2005 and 2010.
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February 24, 2020 by Common Dreams
As a Corporate Tool, Buttigieg Is Now a Hammer to Bash Sanders
The corporate establishment has not yet figured out how to defeat Bernie Sanders in the primary, but the former mayor of South Bend, Indiana appears dead set on damaging the progressive frontrunner as much as possible.byNorman Solomon
Democratic presidential candidate former South Bend, Indiana Mayor Pete Buttigieg greets supporters as he arrives at a town hall campaign event at the Denver Airport Convention Center February 22, 2020 in Denver, Colorado. Nevada held its presidential caucus earlier today. (Photo: Win McNamee/Getty Images)
Soon after his distant third-place finish in the Nevada caucuses, Pete Buttigieg sent out a mass email saying that “Senator Sanders believes in an inflexible, ideological revolution that leaves out most Democrats, not to mention most Americans.” The blast depicted “the choice before us” in stark terms: “We can prioritize either ideological purity or inclusive victory. We can either call people names online or we can call them into our movement. We can either tighten a narrow and hardcore base or open the tent to a new, broad, big-hearted American coalition.”
The bizarre accusations of being “narrow” and not “inclusive” were aimed at a candidate who’d just won a historic victory with one of the broadest coalitions in recent Democratic Party history.
Buttigieg has gone from pseudo-progressive to anti-progressive in the last year, and much of his current mission involves denouncing Bernie Sanders with attack lines that are corporate-media favorites (“ideological purity. . . call people names online. . . a narrow and hardcore base”). Buttigieg’s chances of winning the 2020 presidential nomination are now tiny, but he might have a bright future as a rising leader of corporate Democrats.
Weirdly, Buttigieg’s claim that Sanders has “a narrow and hardcore base” came from someone who appears to be almost incapable of getting votes from black people. In Nevada, columnist E.J. Dionne noted, Buttigieg “received virtually no African American votes.” And Buttigieg made his claim in the midst of a Nevada vote count showing that Sanders received more than three times as many votes as he did. The Washington Post reported that Sanders “even narrowly prevailed among those who identified as moderate or conservative.”
As chances that Buttigieg could win the nomination slip away—the latest polling in South Carolina indicates his vote total there on Saturday is unlikely to be any higher than it was in Nevada—his mission is being steadily repurposed. After increasingly aligning himself with the dominant corporate sectors of the party—vacuuming up millions of dollars in bundled checks along the way—Buttigieg is hurling an array of bogus accusations at Sanders.
Four months ago, while Buttigieg’s poll numbers were spiking in Iowa and big donations from wealthy donors poured in, I wrote an article with a headline dubbing him a “Sharp Corporate Tool.” The piece cited an influx of contributions to Buttigieg from the health insurance, pharmaceutical and hospital industries—while he executed a U-turn from proclaiming support for Medicare for All to touting a deceptive rhetorical concoction called “Medicare for all who want it.” I concluded that Buttigieg is “a glib ally of corporate America posing as an advocate for working people and their families.”
Since then, continuing his rightward swerve, Buttigieg has become even more glib, refining his campaign’s creation myth and fine-tuning his capacity to combine corporate policy positions with wispy intimations of technocratic populism. Buttigieg is highly articulate, very shrewd—and now, in attack mode, more valuable than ever to corporate patrons who are feverishly trying to figure out how to prevent Sanders from winning the nomination. During last week’s Nevada debate, Buttigieg warned that Sanders “wants to burn this party down.”
Over the weekend, the Buttigieg campaign sent out email that tried to obscure its major support from extremely wealthy backers. “At the last debate,” Buttigieg’s deputy campaign manager Hari Sevugan wrote indignantly, “Senator Bernie Sanders condemned us for taking contributions from billionaires. That’s interesting. Because what that tells us is in the eyes of Bernie Sanders, the donations of 45 folks (that’s .0054% of our total donor base) are more important than the donations of nearly 1,000,000 grassroots supporters.”
But Sevugan left out the pivotal roles that very rich contributors have played in launching and sustaining the Buttigieg campaign, with lobbyists and corporate executives serving as high-dollar collectors of bundled donations that add up to untold millions. Buttigieg’s corresponding shifts in policy prescriptions make some sense if we follow the money.
In a detailed essay for Common Dreams that appeared last week, “Buttigieg Is a Wall Street Democrat Beholden to Corporate Interests,” former Communications Workers of America chief economist Kenneth Peres summed up: “Buttigieg and his supporters like to portray him as a ‘change agent.’ However, he has proven to be a change agent that will not in any significant way challenge the current distribution of power, wealth and income in this country. Given his history, it is no surprise that Wall Street, Big Tech, Big Pharma, Health Insurers, Real Estate Developers and Private Equity have decided to invest millions of dollars into Buttigieg’s campaign.”
In the aftermath of the Nevada caucuses, Buttigieg is escalating his attacks on Sanders (who I actively support), in sync with “news” coverage that is especially virulent from some major corporate outlets. Consider, for example, the de facto smear article that the New York Times printed on Sunday. Or the venomous hostility toward Sanders that’s routine on Comcast-owned MSNBC, which has stepped up its routine trashing of Sanders by journalists and invited guests.
More than ever, corporate Democrats and their media allies are freaking out about the grassroots momentum of the Bernie 2020 campaign. No one has figured out how to stop him. But Buttigieg is determined to do as much damage as he can.
Norman Solomon is co-founder and national coordinator of RootsAction.org. His books include “War Made Easy: How Presidents and Pundits Keep Spinning Us to Death“ and “Made Love, Got War: Close Encounters with America’s Warfare State.” He is the founder and executive director of the Institute for Public Accuracy.
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ebruary 17, 2020byCommon Dreams
Buttigieg Is a Wall Street Democrat Beholden to Corporate Interests
Given his history, it is no surprise that Wall Street, Big Tech, Big Pharma, health insurers, real estate developers and private equity have decided to invest millions of dollars into Buttigieg’s campaign.byKenneth Peres
Buttigieg changes positions in response to pressure from Wall street and big pharmaceuticals. (Photo: Scott Olson/Getty Images)
The most important – and often most ignored – issue in the coming election is not health care, taxation, education or even climate change. It is Power: who has it, how it is obtained, who benefits and who loses. Power determines the ability to address or not address all the other issues. I have previously analyzed the process through which corporations dominate our political economy through a system of legalized corruption in which Big Business basically purchases the allegiance of politicians by investing billions of dollars in campaign contributions; obtains favorable legislation by spending billions more in lobbying; and ensures that the legislation is supported by pro-corporate judges who have been appointed by those same politicians (see here, here and here).
This system has allowed big corporations and the wealthy elite to dominate our politics over the past 45 years during which they have obtained trillions of dollars through tax cuts, deregulation, unfair trade deals and the privatization of public assets. Simultaneously, they have prevented the passage of pro-worker and consumer legislation. This system of corporate domination has prevailed with bi-partisan Congressional majorities under both Democratic and Republican presidents. Big corporations, especially Wall Street, will invest hundreds of millions of dollars during this election to ensure that their domination continues into the future.
In this and a number of future articles, I will examine specific presidential candidates not in terms of the liberal, moderate or conservative labels but in terms of their relationship to the U.S. power structure: who supports and funds them, whose power is increased or decreased from the policies they espouse, and whose interests they have in the past and will in the future actually represent.
Wall Street plays a significant role in the overall economy as it basically controls the Federal Reserve which, by setting interest rates, has more power over the general economy than any president.
Wall Street is probably the most powerful sector in the corporate economy. Wall Street plays a significant role in the overall economy as it basically controls the Federal Reserve which, by setting interest rates, has more power over the general economy than any president. Wall Street also influences the decisions of all other major corporations. Corporations rely on Wall Street in order to market stocks and bonds and obtain various loans. But it goes much deeper: the concerns of Wall Street can alter the behavior of even the largest corporations.
AT&T provides a cautionary tale. This gigantic corporation was forced by a vulture hedge fund to buy back $30 billion of its own stock in order to artificially increase the stock price and, not coincidentally, the value of its corporate officers’ stock options. Concurrently, AT&T eliminated 37,800 jobs and reduced its capital expenditures by $1 billion. Moody’s, the credit rating agency stated that the large cost of the buyback could put AT&T at risk for a credit downgrade. Not surprisingly AT&T is still being rewarded with a $42 billion tax cut even though it is cutting jobs and investments. Wall Street also has cemented its dominance of our political system by investing $6.53 billion in their chosen political candidates from 1990-2019, an additional $8.94 billion in lobbying these same politicians and by utilizing a well-known revolving door between Wall Street lobbyists and key staff and elected positions in Congress and the Executive Branch. For example, just in 2019, the entire financial capital sector as a whole (Finance, Insurance and Real Estate) employed, 2,348 lobbyists of which 1,430 or 61% were former Congressional staffers or elected officials or White House staffers.
The following analysis will examine Pete Buttigieg not in terms of his “social” or “cultural” policies but in terms of his relationship to Big Business, especially Wall Street. Does he and will he support Wall Street or Main Street?
BUTTIGIEG, BIG BUSINESS AND WALL STREET
Former Mayor Pete Buttigieg is often portrayed as a non-ideological but high-minded pragmatist who will do well with Middle America and pass progressive legislation with the support of “Republicans of conscience.” He is also seen as the representative of a rising generation, a Washington outsider who provides a new perspective, and a trailblazer as the only openly gay candidate. He has garnered a lot of support from many establishment political pundits. For example, a number of NY Times columnists have praised Buttigieg. David Brooks states that “Buttigieg’s secret is that he transcends many of the tensions that run through our society in a way that makes people on all sides feel comfortable.” Brooks column is titled “Why you love Mayor Pete…Buttigieg detaches progressive politics from the culture war.” Frank Bruni, though concerned with Buttigieg’s age and lack of managerial experience, stated “He routinely steers clear of extremes—on health care, on guns, on environmental issues – not because he lacks conviction or courage, at least not from where I’m sitting, but because extremes aren’t where the most progress is usually made or where healing is likeliest to happen. He’s a champion of the sensible. In that way, he seems much older than his age.”
Do these characterizations of Buttigieg stand up to a more detailed, substantive analysis? Who is the “real” Pete Buttigieg? As mayor of South Bend, Indiana, Buttigieg did not have a voting record on national policy issues. Therefore, his future policy positions and allegiances must be discerned from his practices as mayor; the major contributors to his past campaigns for mayor and current presidential campaign; and his policy pronouncements.
As the following analysis will reveal, Buttigieg has carefully reassured Big Business and Wall Street that he is on their team especially in relation to his history of rewarding big donors with large government contracts; appointing key staff with ties to the financial and high-tech sectors; changing positions/statements on health care policy and Electoral College reform in response to Wall Street and Big Pharma pressure; support for pro-business Supreme Court appointments; support for the privatization of public education; relying on billionaire donors especially from the financial, high tech and pharmaceutical sectors; and, accepting contributions from known union-busting law firms. The conclusion: While Buttigieg is socially liberal, he is pro-Big Business, pro-Wall Street in relation to economic policy.
Follow the Money: Buttigieg Relies on Contributions from Wall Street and Billionaires who See Him as An Alternative to Sanders and Warren. According to the Center for Responsive Politics, the capital finance sector (classified as Finance-Insurance-Real Estate) contributed $4.18 million to Buttigieg in 2019. Communications and Technology formed the second largest business sector contributor with $3.6 million. Major sources of contributions include individuals tied to Alphabet (Google), Microsoft, AT&T, Disney, Comcast, Wells Fargo and Bank of America.
Buttigieg is also a favorite among billionaire donors. An analysis by Forbes found that Buttigieg obtained donations from 40 billionaires. Thirteen of these gave exclusively to Buttigieg’s campaign “by far the most of any Democrat running for president.” Forbes goes on to state, “More than one third of Buttigieg’s wealthy benefactors got rich in finance and investments.”
Wealthy individuals also act as bundlers who aggregate the contributions of multiple donors. The minimum contribution to qualify as a bundler is $25,000. Buttigieg lists 180 bundlers on his website. According to a report from the Center for Economic and Policy Research, 54% percent of his total bundlers are tied to the FIRE sector including 39% from Finance-Insurance (the largest source of bundlers) and 15% from Real Estate (the second largest source of bundlers). At a minimum, the FIRE sector bundlers raised at least $2.35 million. Sixty-eight or 39% are tied to the financial industry. The report also shows that while Buttigieg likes to tout his support from rural and suburban voters, 59% of his big money support comes from New York, Chicago, California and Washington DC.
Buttigieg has only begun to tap the billionaire donor class. Following his good showing in the Iowa caucuses, the Washington Post published an article entitled, “The Finance 202: Pete Buttigieg lures even closer look from Wall Street donors following strong Iowa caucuses performance.” The article states, “Wall Street sources say the former South Bend, Ind., mayor, already a favorite of Democratic financiers, can expect something of a Wall Street windfall now after he proved that he has momentum in the chaotic 2020 race.” One bundler cited in the article pointed to a “tremendous pent-up supply of donor funds available for a leading Democratic candidate who can coalesce the party… In this community, the more momentum Bernie and Elizabeth get, the more bundlers will start to come off the sidelines. Every day, there’s more information that gets traditional New York finance bundlers motivated to get behind someone who can win.”
Pay to Play: Contributors to Buttigieg’s Campaigns Will Expect to Be Rewarded—As They Have Been in South Bend. An investigative report jointly conducted by the Center for Public Integrity and The Young Turks reached the following conclusions: “Buttigieg’s earliest big-dollar campaign bankrollers include numerous lobbyists and prospective government contractors interested in doing business with South Bend, according to campaign finance records obtained by TYT…. South Bend-area contractors, who stood to benefit from doing business with the city, appear throughout Buttigieg’s 2011 list of mayoral pre-primary contributors…. Public Integrity and TYT identified a number of them that later ended up getting lucrative business from Buttigieg’s mayoral administration.”
Another investigative report by Sludge was entitled “After City Incentives, South Bend Real Estate Executives Donate to Mayor Pete’s presidential Campaign.” This report provided a number of examples including Great Lakes Capital, a private equity firm, that with its connected businesses, obtained a number of subsidies from South Bend for real estate development including $790,000 for a downtown project. For the first quarter of 2019 alone, upper level GLC employees gave $9,000 to Buttigieg’s campaign.
These relationships and contributions may not seem like a lot of money from the perspective of a national campaign. However, they are indications to Wall Street and Big Business that Buttigieg addresses the needs of his major contributors and engages in quid-pro-quo politics, i.e., he rewards those who provide campaign contributions.
Buttigieg Has Filled Key Staff Positions with Individuals Tied to Wall Street. Buttigieg has not only obtained significant campaign contributions from Wall Street but has filled key staff positions from individuals with ties to Wall Street. And he has adjusted some important positions as a result.
- Key Staff and Supporters with Ties to Wall Street. Buttigieg has many close ties to Wall Street. His National Policy Director is a former executive from Goldman Sachs and Google. Furthermore, some of Buttigieg’s biggest supporters are directly from Wall Street. Here is just one example highlighted in The American Prospect article that deserves an extended quote because it contrasts the interests of Wall Street and homeowners/renters – an issue of special interest to Buttigieg. “One of the most notable financial-industry titans supporting Buttigieg is Tony James, the executive vice chairman of Blackstone, the world’s largest private-equity firm. James hosted a fundraising event at his home for Buttigieg earlier in June. Blackstone’s interests are opposed to major reforms on many fronts. Any plan to make housing more affordable, for example, will have to contend with private equity’s grip on single-family home rentals. Indeed, the UN Special Rapporteur on the right to adequate housing directly called out private equity in general, and Blackstone in particular, for representing a “devastating” force undermining tenants. That James has fundraised for Buttigieg is an indication of his confidence that a President Buttigieg will not hurt private equity’s real-estate interests. This does not mean that Buttigieg will fail to address housing affordability; he can still, for example, encourage Congress to increase federal funding for affordable housing, as his “Issues” page promises. Of course, that would not threaten Blackstone’s business model.” As previously discussed, such a relationship is not new for Buttigieg. When he was mayor, Buttigieg established a symbiotic relationship between his campaign and private equity firms that obtained lucrative contracts while providing contributions to his campaign.
- Buttigieg has been invited to meetings with Wall Street donors as part of their stop Sanders offensive. A New York Times article revealed that Wall Street favors Buttigieg as a realistic alternative to Sanders. “The matter of What to Do About Bernie and the larger imperative of party unity has, for example, hovered over a series of previously undisclosed Democratic dinners in New York and Washington organized by the longtime party financier Bernard Schwartz. The gatherings have included scores from the moderate or center-left wing of the party, including Speaker Nancy Pelosi of California; Senator Chuck Schumer of New York, the minority leader; former Gov. Terry McAuliffe of Virginia; Mayor Pete Buttigieg of South Bend, Ind., himself a presidential candidate; and the president of the Center for American Progress, Neera Tanden (emphasis added).”
Strong Ties to and Key Staff from Facebook, Zuckerberg and Silicon Valley. Buttigieg has deep connections to Zuckerberg, Facebook and Silicon Valley. As reported in the American Prospect, Buttigieg was friends with two of Zuckerberg’s roommates, Joe Green, and Facebook co-founder Chris Hughes. Buttigieg has subsequently cultivated many other leading Silicon Valley voices, including a partner (Cyan Bannister) of Trump’s biggest tech backer, Peter Thiel (himself Facebook’s first outside investor). Senior Facebook executives have donated to Buttigieg’s campaign. The Buttigieg campaign also hired two Zuckerberg recommended staffers: Eric Mayefsky, senior digital analytics adviser, and Nina Wornhoff, organizing data manager. These hires followed the highly unusual step of a series of private emails sent by Zuckerberg and his wife recommending specific people for the campaign to hire. Not surprisingly, Buttigieg has criticized proposals to break-up Facebook. After analyzing Buttigieg’s relationship with High Tech one commentator for Wired stated: “From Silicon Valley’s perspective, Buttigieg is the dream candidate: a change agent who doesn’t want to change them.”
Buttigieg Changes Positions in Response to Pressure from Wall Street and Big Pharmaceuticals. It is not uncommon for candidates to change their positions during campaigns. But the key question is not only what has changed but also why the changes have been made. In a number of key areas, Buttigieg has changed his positions in response to concerns expressed by major Wall Street and Big Business funders.
- Pressure from Wall Street Has Already Forced Buttigieg to Moderate Some of His Positions. Buttigieg has stopped addressing his proposals to reform the Supreme Court and eliminate the Electoral College in response to pressure from major financial donors. Initially, Buttigieg’s proposals for reforming the Supreme Court and eliminating the Electoral College were central features of his campaign – and key pieces of his initial stump speeches. However, the New York Times reports that “Multiple financial bundlers told the campaign that the Supreme Court and Electoral College proposals were not popular, according to people familiar with the discussions. Mr. Buttigieg has since quietly dropped them from his stump speech.”
- Pressure from Big Pharma Has Contributed to a Major Change in His Position on Medicare for All. Buttigieg initially supported Medicare for All and ending private health care insurance. However, he has been accused of changing his position on these issues. Buttigieg states that what he really meant was Medicare for All Who Want It – a position that would preserve private health insurance. It is of course interesting to note that the Pharmaceutical/Health products sector has contributed more to Buttigieg than any other Democratic candidate for the Presidency (second only to Trump). Individuals who have given at least $1,000 to Buttigieg’s campaign include senior executives at CVS Health, Astex Pharmaceuticals, Anthem Inc. and Ironwood Pharmaceuticals.
Buttigieg Sends Clear Signals to Wall Street and Billionaires that He is On Their Side. Buttigieg has sent important signals to Wall Street and the economic oligarchs that he not only supports them in relation to their own sector but on other issues as well.
- Buttigieg Gets Contributions from Union-Busting Firms. An investigative report in Sludge is entitled “Biden and Buttigieg Take Big Bucks From Union-Busting Lawyers: Attorneys at law firms with notable histories of anti-worker actions have been coalescing around the moderate Democratic presidential candidates.” The report states, “These groups include elite law firms and consulting companies with long histories of offering expensive “union avoidance” services to employers looking to squash their worker’s organizing efforts among other anti-labor services. Employees of these firms range from associates to CEO’s and from low dollar donors to bundlers, but their support of these candidates may hint that the labor policies they expect from a Biden (or Buttigieg) administration are more employer-friendly than what unions are expecting. At the very least, these firms may be looking to influence strategic appointments at Departments and Agencies like the Department of Labor and the National Labor Relations Board, where sympathetic board members can help ensure the firm’s clients stay “union free”.”
- Support for Moderate/Pro-Business Supreme Court Appointments. In a Cosmopolitan interview Buttigieg praised ex-Justice Anthony Kennedy as an example of judges who can “think for themselves.” He said that the justices he would appoint personally under that plan would be more liberal than Kennedy. Ben Mathis-Lilley in his Slate article puts this into context: “a Supreme Court to which Democrats appoint liberals and Republicans appoint conservatives, with throwback Kennedys in the middle, is the same arrangement that produced a number of the outcomes Buttigieg once claimed to deplore. Kennedy himself cast crucial swing votes in Citizens United, in the 2018 Janus decision that dealt a major blow to labor organizing, the 2013 Shelby County decision that killed a key section of the Voting Rights Act” and the Husted decision that supported voter suppression.
- Support for Corporate and Privatized Education. Buttigieg comes down on the side of corporate education policy and privatization. Diane Ravitch issued a stinging critique of Buttigieg’s position on education. Ravitch is a Professor of Education at NYU and a former Assistant Secretary of Education under George H.W. Bush. Initially, she was a strong proponent of charter schools and national testing. However, she is now a strong critic of both. She met with Sona Michel (Buttigieg’s National Policy Advisor and former employee of Goldman Sachs and Google). Ravitch’s conclusion: “Mayor Pete may have many things going for him, but his education agenda is not one of them. If he were president, he would continue the failed Bush-Obama agenda.” In terms of specifics Ravitch stated: “It was a frustrating conversation because we were at opposite poles. We disagreed about whether charters are effective, whether they are sufficiently regulated, whether they need more oversight. We disagreed about the value of annual testing. I said that no high-performing nation has annual testing for every child in grades 3-8 as we do. They said I was wrong and cited Japan and South Korea. I corrected them and said those nations have periodic testing, not annual testing. I asked whether their candidate wanted to appeal to the 6% who send their children to charters or the 90% who don’t. I did not get an answer.”
- Reduce the Federal Debt by Cutting Government Programs. Buttigieg has also taken out a page from the Wall Street preferred policy playbook: point to the federal debt as a rationale to cut social programs. NBC News recently reported that Buttigieg has proposed to reduce the debt. He specifically stated, “It’s not fashionable in progressive circles to talk too much about the debt, largely because of the irritation to the way it’s been used as an excuse against investment. But if we’re spending more and more on debt service now, it makes it harder to invest in infrastructure and health and safety net that we need right now…” The NBC article noted that “Buttigieg hasn’t laid out a plan to significantly lower the national debt, which could require steep tax hikes or cuts in cherished programs like Social Security.” However, Buttigieg is wrong at the level of economic theory and experience. Paul Krugman, the Nobel Prize winning economist, stated, “Maybe Buttigieg is unaware of the growing consensus among mainstream economists that the deficit hysteria of seven or eight years ago was greatly overblown… Buttigieg is playing into… the [Republican] strategy of hobbling the economy with fiscal austerity when a Democrat occupies the White House, then borrowing freely as soon as the G.O.P. regains power. If Democrats win, they should pursue a progressive agenda, not waste political capital cleaning up the G.O.P.’s mess.” It is also interesting that Buttigieg is playing the austerity card when the federal debt service as a percentage of the gross domestic product is much lower now than in the late 1990s when there was significant growth in GDP, jobs and wages. According to the Federal Reserve Bank of St. Louis, debt service was 1.75% of GDP in 2019 – even after the two year impact of the Trump tax cut (that will add $2.289 trillion to the federal debt over ten years according to the Congressional Budget Office). This percentage was 3.04% in 1995 and 2.9% in 1999. It is very interesting how the federal debt becomes a problem when related to government programs including Medicare and Social Security but not when related to tax cuts for the corporations and wealthy or the military budget.
- Work for McKinsey and Company. Former Mayor Buttigieg has issued conflicting reports about his role as an employee of McKinsey and Company, the giant global management consulting firm. When he ran for mayor of South Bend, Buttigieg boasted about his role in turning around a number of Fortune 500 companies. A Washington Post analysis stated: “A review of speeches and interviews that Buttigieg gave when he first pursued public office in Indiana shows that he consistently played up his McKinsey experience, touting work advising “senior decision-makers” and claiming he was “part of billion-dollar decisions made by Fortune 500 companies.” The Washington Post article also refers to a 2011 interview with the South Bend Tribune in which Buttigieg stated “I’m the only candidate who has been involved in multibillion-dollar decisions in the private sector, with some of the world’s top firms.” Now that he is running for president, Buttigieg is downplaying his role at McKinsey especially after he was forced to reveal the companies he analyzed, and it became public that a number of those companies actually laid off thousands of workers as recommended by McKinsey and its analysts. The Washington Post article also refers to a Dec. 10 interview with the Atlantic, in which “Buttigieg painted a picture of himself as a low-level employee locked in a room with a computer, who not only was removed from decision-making power but often didn’t talk to his clients’ employees or know the outcomes of his projects…When asked if his work had led to job losses at Blue Cross Blue Shield, Buttigieg told the magazine: ‘I don’t know what the conclusions were or what it led to. So, it’s tough for me to say.'” A Vox investigative report into Buttigieg’s experience at McKinsey has a sub-heading labeled “The McKinsey scrutiny plays into broader questions about Buttigieg’s coziness to power.” There are at least two conclusions that can be reached in relation to this entire episode. First, Buttigieg has given two very different perspectives on his time at McKinsey that have served his different purposes when running for mayor and as president. Second, his work for McKinsey is another signal to Wall Street that Buttigieg is on their side.
Buttigieg and his supporters like to portray him as a “change agent.” However, he has proven to be a change agent that will not in any significant way challenge the current distribution of power, wealth and income in this country. Given his history, it is no surprise that Wall Street, Big Tech, Big Pharma, Health Insurers, Real Estate Developers and Private Equity have decided to invest millions of dollars into Buttigieg’s campaign. And based on past actions, Buttigieg will make sure that investment pays off if he is elected.
Kenneth R. Peres retired as chief economist of the Communications Workers of America. Formerly, he served as economist for the Northern Cheyenne Tribe, the Montana House Select Committee on Economic Development, and the Montana Alliance for Progressive Policy. Ken has held teaching positions at the University of Montana, St. John’s University, Chief Dull Knife College, and the City University of New York. He obtained a PhD in economics from the New School in New York City.
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February 23, 2020byCommon Dreams
Joe Biden Serves Wall Street, Not Main Street
He has relied and continues to rely on the campaign contributions of Wall Street and billionaires, including union busting law firms.byKenneth Peres
Former Vice President Joe Biden, a 2020 Democratic presidential candidate, gives a speech on July 11, 2019 in New York City. (Photo: Spencer Platt/Getty Images)
He calls himself “Uncle Joe” and “Middle Class Joe.” He often talks about his almost archetypal U.S. political success story of rising from the middle class to become a U.S. Senator and Vice-President.
Now he is running for President. Biden contends that he will and has always represented the interests of the U.S. middle class.
In one campaign ad, Biden states, “Maybe the most important thing my mom and dad taught me was that everyone should be treated with dignity. Today too many middle class and working class people, they’re not able to look their kid in the eye and say, ‘Honey, it’s going to be okay,’ and mean it. That’s why I’m running.” In his first campaign speech delivered to a largely union crowd in Pittsburgh, Biden stated “Let me say this simply and clearly, and I mean this: The country wasn’t built by Wall Street bankers, CEOs and hedge fund managers. It was built by you. It was built by the great American middle class.” In an interview, Biden stated, “It’s high time we helped Main Street.”
At a rally in Iowa, Biden summed up his main campaign theme, “I think the moral obligation of our time is to rebuild the middle class…That’s my north star and the reason for that is when the middle class does well, everybody does well.”
Throughout his political career, Biden has portrayed himself as siding with the millions of middle-class workers and small businesspersons who populate Main Street against the bankers, corporate executives and billionaires who inhabit Wall Street.
Is Biden’s self-portrayal accurate? In his long political career, has Biden been the champion of the middle class against the “Wall Street bankers, CEOs and hedge fund managers”?
In this and a number of future articles, I will examine specific presidential candidates not in terms of the liberal, moderate or conservative labels but in terms of their relationship to the U.S. power structure: who supports and funds them, whose power is increased or decreased from the policies they espouse, and whose interests they have in the past and will in the future actually represent.
In a previous article, I analyzed Pete Buttigieg in terms of his relationship to the interests of Wall Street and the corporate elite. In this article, I will examine Joe Biden not in terms of his “social” or “cultural” policies but in terms of whether Biden serves the interests of Wall Street or Main Street. This analysis will be based on identifying Biden’s main contributors, the legislation and policies he supported as senator and vice president, and his statements and policy proposals.
As a Presidential Candidate, Biden Literally Promised Wall Street and Billionaires: “I Won’t Let You Down, I Promise You.” Biden has gone to great lengths to reassure Wall Street of his fidelity. For example, in June 2019, Joe Biden addressed more than 100 wealthy donors at the Carlyle Hotel in Manhattan.
The crowd included Robert Rubin (former Co-Chair of Goldman Sachs and Treasury Secretary under Clinton) and Robert Altman (former co-head of investment banking at Lehman Brothers; Assistant Secretary of the Treasury under Carter and Clinton; and former Vice-Chairman of the Blackstone Group). Obviously, the attendees represented not just the mega-rich but also some of the most powerful members of the Wall Street political elite.
Biden not only pledged his fealty to their interests but also differentiated himself from the progressive wing of the Democratic Party. Biden stated “The truth of the matter is, you all, you all know, you all know in your gut what has to be done. We can disagree in the margins but the truth of the matter is it’s all within our wheelhouse and nobody has to be punished. No one’s standard of living will change, nothing would fundamentally change…I need you very badly. I hope if I win this nomination, I won’t let you down. I promise you.”
Follow the Money: Biden Has Always Relied on Contributions from Wall Street. Biden has been beholden to Wall Street and billionaire donors throughout his entire career.
- As Senator, Biden relied on Wall Street money. Biden’s cozy relationship with Wall Street reflects the role of that industry in Delaware – the state Biden represented as Senator from January 1973 to January 2009. Delaware is the chosen home for large corporations and many financial services firms. Delaware has more businesses incorporated in the state (1.4 million) than there are residents (967,000 in 2018). More than 50% of all publicly traded companies and more than 67% of the Fortune 500 are incorporated in Delaware. One leading business professor stated, “Delaware is an outlier in the way it does business … what it offers is an opportunity to game the system and do it legally.” There are three major reasons for Delaware’s popularity among big corporations: it is a tax haven that allows corporations to declare certain types of revenue in Delaware rather than in higher tax states; Delaware makes it easy to incorporate, avoid liability and retain privacy without providing much documentation; and the Delaware courts allow companies to resolve disputes quickly with a judge rather than a jury. Financial services dominate the Delaware economy. According to the U.S. Bureau of Economic Analysis, the traditional measure of the entire financial sector (Finance, Insurance and Real Estate) accounts for 44% of the entire state economy and almost 50% of the private sector. Finance and Insurance alone account for 30% of the entire state economy.
Thus, it is no surprise that the interests of the financial services sector and Biden are intertwined. According to the Center for Responsive Politics the entire finance capital sector (Finance, Insurance and Real Estate) has been the largest business sector contributor to Biden’s various senatorial and his 1988 and 2008 presidential campaigns. Between 1990-2007, this sector invested $6.87 million in Biden. The second largest individual business contributor to Biden’s campaigns over this period was MBNA that invested $265,350 into Biden’s campaigns before he ran for Vice-President on the Obama ticket. MBNA was the largest independent credit card company in the U.S. and the largest private sector employer in Delaware. In 2007, MBNA was acquired by Bank of America and in 2017 by Lloyds Banking Group of the UK. - As Presidential candidate, Biden continues to rely on Wall Street money. Data from the Center for Responsive Politics also reveals that the Finance, Insurance, and Real Estate (FIRE) sector has invested $6.32 million in Biden’s current presidential campaign – this not only is the largest source of Biden’s campaign funds among businesses, but it is FIRE’s largest investment in any Democratic candidate and second only to Trump overall. This figure includes a $3.04 million investment by the finance and insurance sector of Wall Street. The Blackstone Group (a major multi-national private equity firm) and Morgan Stanley are among Biden’s largest contributors. Biden also has received $3.28 million in contributions from the real estate industry – second only to its investment in President Trump.
According to a Forbes article in December 2019, forty-four billionaires have given to Biden’s campaign. Twenty-five or almost 60% come from the Finance, Insurance, and Real Estate sector including 17 from “Finance and Investments” and 8 from Real Estate. The article states, “Biden’s billionaire backers may come in handy down the line. In October, a pro-Biden super PAC called Unite The Country sprang to life. Super PACs, which can end up buying ads to support or oppose particular candidates, are not controlled directly by campaigns.” According to the Center for Responsive Politics, Unite the Country spent $5.5 million as of February 2020. The finance/insurance/real estate sector accounted for $2.4 million.
Wealthy individuals also act as bundlers who aggregate the contributions of multiple donors. The minimum contribution to qualify as a bundler is $25,000. Biden lists 262 individuals as bundlers on his campaign site. According to a report from the Center for Economic and Policy Research, 40% of his total bundlers were tied to the FIRE sector including 23% from the “financial industry” and 17% from real estate. At a minimum, the FIRE sector has bundled $2.625 million. The report also shows that while Biden likes to tout his support from rural and suburban voters, 106 of his big money bundlers reside in the big urban centers of from New York, Chicago, California and Washington DC.
An investigative reporter, Lee Fang, published an article in The Intercept examining Biden’s ongoing ties to Wall Street and other major corporate funders during his 2020 campaign. The title of the article tells the story: “Joe Biden’s Super PAC Is Being Organized by Corporate Lobbyists for the Health Care Industry, Weapons Makers, Finance.”
Biden Has Consistently Chosen Wall Street over Main Street. Biden has served his Wall Street investors well. The following list provides some of the highlights of Biden’s service to Wall Street over his career – to the detriment of Main Street.
- Supported banking industry consolidation and Too Big to Fail Banks. Biden helped banks and insurance companies consolidate and become too big to fail. In 1994, Biden backed the Riegle-Neal Interstate Banking and Branching Efficiency Act that eliminated any remaining barriers to inter-state banking. This opened the floodgates to a new era of corporate consolidation of the banking industry.
- Supported the elimination of protections that limited Wall Street speculation. Biden helped to eliminate protections against financial industry speculation thereby creating conditions that exacerbated the Great Recession of 2008. In 1999, Biden voted for the Financial Services Modernization Act, which repealed the Depression-era Glass-Steagall law barring banks from owning securities and insurance businesses. One of Biden’s largest contributors MBNA lobbied for the repeal of Glass Steagall and he delivered. Glass-Steagall created a wall between commercial banks and investment banks. Workers and small businesses use commercial banks to deposit their money in federally guaranteed checking and savings accounts. Glass Steagall prevented banks from transferring these federally guaranteed deposits to their investment banking operations that focused on high risk and speculative investments.
In this way, Glass-Steagall served to limit the ability of banks from using no-risk federal guaranteed deposits for high-risk speculative investments. The 1999 act repealed these protections. Not surprisingly, this allowed Wall Street to create a new era of rampant speculation – which adversely affected small businesses and workers. - Supported Wall Street banks while hurting Main Street small business and middle-class borrowers. The Bankruptcy Act of 2005 presented Biden with a stark choice between Wall Street and Main Street. Biden not only chose Wall Street, but he championed Wall Street’s interests. This bill made it much more difficult for financially distressed families to receive the protections that accompany a bankruptcy filing. Conversely, it aided the banking industry by making it easier to collect that debt.
Bankruptcy was designed to help individuals and businesses eliminate all or part of their debt or help them repay a portion of what they owe. It often involves a bankruptcy court and negotiating a repayment plan. However, the Act basically removed bankruptcy as an option for millions of families. Many consumer groups and unions opposed the bill.
However, it was proposed and energetically supported by the finance industry. The credit card industry spent $100 million lobbying for the bill over an eight-year period. MBNA, one of Biden’s leading donors, lobbied hard for its passage. Only Biden and 3 other Democratic Senators joined with a solid bloc of Republicans to defeat every attempt to moderate the bill.
An article in The Guardian provides an assessment of Biden’s role by Melissa Jacoby, a law professor at the University of North Carolina at Chapel Hill specializing in bankruptcy, “Biden was one of the most powerful people who could have said no [to the Bankruptcy Act], who could have changed this. Instead he used his leadership role to limit the ability of other Democrats who had concerns and who wanted the bill softened…. I don’t know how else to explain his stance on bankruptcy policy for financially distressed families other than his relationship with the consumer credit industry. There really isn’t another plausible explanation.”
Elizabeth Warren, then a Harvard law school professor, adamantly opposed the bill in its various forms. She even wrote an entire paper criticizing Biden’s role in an earlier version of the bill. Bernie Sanders, then a Congressman from Vermont, voted against the bill. In the final vote, Biden and 17 other Democrats voted for the bill.
A Mother Jones article by Tim Murphy provides a detailed account of how Biden assisted his investors (especially MBNA and the entire banking sector) by supporting and helping to craft this pro-Wall Street legislation that was ironically named the Abuse Prevention and Consumer Protection Act. Between 1980 and 1997, the number of Americans filing for personal bankruptcy jumped more than 300 percent, affecting 1.3 million households annually. Borrowers were being hit with significant increases in medical bills, student loans, credit card fees, and mortgages while experiencing a long period of stagnant incomes.
The rise in personal bankruptcies was very troubling to the banks and credit card companies. The banking industry crafted a bill that did not focus on the needs of debtors and did not address the reasons why personal bankruptcies were increasing. Instead, the banking industry and its political allies focused on making it harder for people to declare bankruptcy and easier for banks and credit card companies to collect. The Bankruptcy Act made personal bankruptcy more expensive, complex, bureaucratic, burdensome and less effective and, thus, more difficult for families to get out of crushing debt. But it did protect the assets and interests of the banks holding the debt. The number of personal bankruptcy filings has fallen by half since the Act became law. - Helped create the student debt crisis – this is not hyperbole. Biden’s role in the creation of the student debt crisis is especially illustrative of his choice of Wall Street over Main Street. Biden was part of a multi-decade banking strategy to make it easier for students to acquire debt while making it much more difficult for them to declare bankruptcy.
Obviously, this benefitted the banks who expanded their loans to students and their power to collect the debt. Currently, 45 million Americans owe nearly $1.6 trillion in student loan debt. More than 1 million people default on their student loans every year. An investigative report in the Intercept concludes that “Joe Biden played a central role in the creation of the student debt crisis that he and other candidates are now promising to fix, according to a close look at the legislative history around the spiraling phenomenon.”
The article cites Biden’s role in the 1970s in passing legislation that made it easier for students to acquire student loan debt while also writing other legislation blocking students from seeking bankruptcy protections on those loans after graduation. In 1986, Biden supported legislation that prevented students in default under the Guaranteed Student Loan program from receiving new federal assistance. As discussed above, Biden was a major proponent for the Bankruptcy Act of 2005 that made it even more difficult for students to declare bankruptcy due to crushing student debt.
The combination of easier availability of loans and less availability of bankruptcy protections led to a massive increase in student loans and defaults. Student loan statistics collected by Motley Fool show that from 2005 to 2019, total student debt soared from $391 billion to $1.6 trillion. There are now 44.7 million Americans holding student debt – most of which is comprised by federal loans. However, there is approximately $125 billion in private student loans. About 20% of all people with student loans are behind on their payments.
Falling behind or missing payments can lead to a lower credit rating that will make it more difficult to obtain future financing for such important items as cars, homes and small business ventures. The Intercept article notes that “Biden, who has said he’s still paying off $298,000 in student debt for his three children, opposes free college and student debt forgiveness, calling it unrealistic.” - Placed corporate rights over consumer rights. Biden was also active in opposing efforts to give consumers the right to sue companies for predatory business practices. Zach Carter, in a Huffington Post article, describes how Biden opposed Senator Ted Kennedy’s effort to protect consumer rights. Instead, Senator Biden supported corporate rights. Carter states, “Biden…. was also trying to thwart a Kennedy effort that would have empowered consumers to sue over a broader swath of antitrust violations.
In 1977, the Supreme Court issued a controversial ruling that only those who directly purchased products could sue companies for antitrust violations. That meant that manufacturers who sold their goods through wholesalers could only be sued by the wholesalers, not consumers. Kennedy prepared a bill that would have reversed the court’s decision, but Biden, in the words of The New York Times, “vexed” him by siding with Republicans. Biden was going out on a limb by bucking leadership.
Only two of the committee’s 10 Democrats opposed Kennedy on the bill, and the other was Howell Heflin, a conservative Democrat from Alabama. The bill narrowly made it out of committee after Kennedy made some desperate last-minute concessions to win over Republican Sen. Charles Mathias (R-Md.), but the bill never got a floor vote. Kennedy’s broader antitrust ambitions died with it.”
Biden has Consistently Sought to Cut Social Security and Government Social Services in order to Reduce the Federal Debt. Biden’s position on the federal debt and government spending provides yet another example of his preference for Wall Street and the wealthy over Main Street and the “middle class.” Wall Street consistently calls for budget cuts to social security and government social services, often to pay for their tax cuts. It is part of the overall Corporate Agenda (increase profits by cutting taxes on corporations and the wealthy, government regulations, government social spending and labor costs while increasing privatization). Biden has bought into important parts of this agenda.
Many articles have detailed Biden’s attempts over a 40-year period to reduce the federal debt by cutting social programs as well as Social Security (examples include Slate, The Intercept, The Week, and Huffington Post). The Slate article concludes, “For the vast majority of his career, Joe Biden was a proud deficit hawk—a man who fretted for decades about federal spending and, on occasion, bragged about his own personal attempts in the 1980s ‘to freeze all government spending, including Social Security,’ in the name of fiscal prudence….there’s no getting around the fact that Biden spent the vast majority of his time in Washington beating the drum for budget cuts.”
- Supported the Reagan tax cut and then proposed cuts to social programs and Social Security to reduce the resulting deficits. The Huffington Post article traces Biden’s preference for budget cutting back to the 1980s when Biden “voted for the Reagan tax bill that slashed the top income tax rate from 70% to 50% and exempted many wealthy families from the estate tax on unearned inheritances, a measure that cost the federal government an estimated $83 billion in annual revenue. He then called for a spending freeze on Social Security in order to reduce the deficits that tax law helped to created. “While this program is severe,” Biden said on the Senate floor, ‘it is the only proposal that will halt the upward spiral of deficits,” which supposedly threatened ‘an economic and political crisis of extraordinary proportions’ within 18 months.”
- Supported a balanced budget constitutional amendment which, if enacted, would have created an economic disaster. A report by the Center for Budget Policy and Priorities includes a withering critique of a proposed constitutional amendment mandating a balance budget. “If such an amendment had been ratified when Congress last voted on these proposals and had been enforced for fiscal year 2012, ‘the effect on the economy would be catastrophic,’ Macroeconomic Advisors, one of the nation’s preeminent private economic forecasting firms, concluded at the time. It would have caused the unemployment rate to double from 9% in that year to 18% by throwing an additional 15 million people out of work, according to the firm. Not only that, ‘recessions would be deeper and longer’ under a constitutional budget amendment, and uncertainty would be cast over the economy that could retard economic growth even in normal economic times, the analysis concluded.”
Such critiques are prevalent whenever the balanced budget constitutional amendment has been proposed. Yet, Biden enthusiastically supported such an amendment even though it would have been devastating to the economy. The Slate article includes the following 1995 Biden quote,
“I am one of those Democrats who voted for the constitutional
amendment to balance the budget. I have introduced on four occasions
– four occasions! – entire plans to balance the budget… I tried with
Senator Grassley back in the ‘80s to freeze all government spending,
including Social Security. Including everything….”
The U.S. Chamber of Commerce, the preeminent trade group representing Big Business, and the American Legislative Exchange Council, another leading big business group, have supported balanced budget amendments over the years. However, Biden faced strong opposition from unions, consumer groups, and AARP. The Delaware News Journal carried a story that was headlined: “Biden gets blasted on budget bill: Seniors head list of groups pressing him to reconsider.”
The article even quoted an AARP representative as stating that the amendment “is nothing more than a raid on Social Security’s trust fund.” Bernie Sanders, then a Congressmember from Vermont stated on the House floor, “The balanced budget amendment will be a disaster for working people, for elderly people, for low-income people…It will mean, in my view, the destruction of the Social Security system as we know it.” In order for a constitutional amendment to go to the states for ratification, it requires a 2/3 majority vote in both the House and the Senate. The balanced budget amendment obtained the 2/3 majority in the House. The vote was known to be close in the Senate.
Despite facing strong opposition Biden voted for the amendment – it failed to obtain the 2/3 majority in the Senate by just one vote. Economic disaster was avoided despite not because of Biden. - Called for cuts to Social Security during his 2008 presidential campaign. In a 2007 interview with Tim Russert on Meet the Press, Biden stated that he would consider cutting Social Security benefits by raising the retirement age which would push back the age at which seniors could begin collecting benefits and by reducing cost-of-living increases. Biden stated that he agreed with such cuts, “Absolutely, you have to.” Biden furthermore boasted about his role in helping to negotiate a deal that previously raised the retirement age to 67. An article in The Week, also reported that the 2008 Biden campaign a released a plan that included “options such as upping the retirement age[.]” And that he “endorsed the idea again during a primary debate (to be fair, he also endorsed removing the payroll tax cap to add revenue).”
- Led the 2011-2012 attempt to negotiate a “grand bargain” of long-term cuts to Social Security and Medicare in return for modest tax increases on the rich. In 2011-12, the Obama/Biden administration agreed that the deficit was a major problem – even though the economy was still in the throes of the Great Recession. Sound economic policy would require greater government spending at such a moment, not government cutbacks. However, the administration was still reeling from the results of the 2010 landslide election of Republicans to the House and Senate. Obama gave in to pressure from Republicans and big business lobbyists and decided to make a budget deal. Obama dispatched Biden to try to ink a “grand bargain” with the House GOP that would have traded relatively modest tax increases for significant long term cuts to Social Security and Medicare. The Grand Bargain would have reduced the debt by an estimated $4 trillion over 10 years. Despite strong efforts by the administration and Biden, the Grand Bargain failed because right wing Republicans would not support any, even modest, tax increases.
- Biden is still promoting cuts to Social Security and Medicare. Biden’s current campaign platform actually calls for slightly expanding Social Security benefits for seniors. And yet, as reported by Slate and many other outlets, during a 2018 speech at the Brookings Institute, Biden still managed to suggest that both Social Security and Medicare would need “adjustments” – which is inside-the-beltway talk for “cuts.” Biden stated, “Paul Ryan [former Republican Speaker of the House] was correct when he did the tax code. What’s the first thing he decided to go after? Social Security and Medicare. That’s the only way you can find room to pay for it.” There is some controversy over whether Biden was being serious or sarcastic. However, such a statement clearly fits the pattern of Biden’s proposals over 40-years.
While Touting Support for Workers, Biden Collects Major Contributions from Union Busting Law Firms, was Culpable in the Failure to Pass Important Pro-Union Legislation and Supported Job Killing Trade Deals. Unions are still important – especially to the Democratic Party. In 2019, unions represented 16.4 million wage and salary workers (14.6 million union members and 1.8 million others whose job is represented by unions). Unions are an important source of money for candidates but also, more importantly, unions provide thousands of volunteers for canvassing, phone banking and get-out-the-vote efforts. Biden portrays himself as a friend of labor. So far, he has won the endorsements of a number of unions including the International Brotherhood of Electrical Workers, the Amalgamated Transit Union, and the International Association of Firefighters. However, there are a number of troubling concerns about Biden and his support of unions including the following:
- Continues to accept financial contributions from union-busting firms. While seeking support from labor unions and touting his past support from unions, Biden is simultaneously accepting thousands of dollars in contributions from union-busting firms. A report in Sludge detailed the thousands of dollars in contributions that union-busting law firms have given to Biden.
The report includes a list of Biden donors that constitute a veritable “who’s who” among anti-union firms in the U.S. The list includes Jackson Lewis, one of the most well-known anti-worker firms, which has a long history of orchestrating aggressive anti-union campaigns for retailers like Ikea, as well as manufacturers, media outlets, and universities. Another contributing firm, Morgan Lewis, promises employers will “avoid union penetration, and strategically shape bargaining units to minimize potential union organizing victories.” The report also details how a number of Morgan Lewis partners have served on the National Labor Relations Board – including two appointed by President Trump.
The website of another donor firm, Cozen O’Connor, states that it helps employers “avoid unionization through positive employee relations and regain nonunion status when employees indicate they no longer wish to be union-represented.” Ballard Spahr offers legal services including “union avoidance training and counseling” and “prevention and control of strikes and picketing” in order to “help clients maintain a union-free environment.” Obviously, Biden sees no problem accepting donations from anti-union firms while seeking union endorsements. - Biden played an important role in undercutting support for important pro-worker legislation in 1978. In 1977-78, the Democrats controlled the White House as well as majorities in the House and the Senate. President Carter and other leading Democrats promised unions that they supported and would pass a mild set of labor reforms that would have speeded up the process for workers to accept or reject union representation and to negotiate a first contract. The Labor Reform Act of 1978 did not pass. In a review of Biden’s labor record in The Guardian, Gabriel Winant observed, “In 1977-1978, during unions’ big push for labor law reform, he [Biden] vacillated for months and sabotaged the proposal with public criticism.”
- Biden was culpable for the failure to get important pro-worker legislation passed in 2009. In January 2009, President Obama appointed Vice-President Biden as chair of the White House Task Force on Working Families basically putting him in charge of the Administration’s support for the Employee Free Choice Act (EFCA).
This act would have made it somewhat easier for unions to organize and collectively bargain by instituting three major provisions: A “card check” provision would have allowed workers to form a union by a simple majority signing union cards; it would have imposed binding arbitration in newly unionized workplaces if the company and union could not reach a new contract within 90 days; and it would have increased fines on companies that violated workers’ right to organize.
The labor movement united in its effort to pass the legislation. At a labor union rally in September 2009, Biden promised that EFCA would pass Congress by the end of the year. He was optimistic, after all Democrats at various times during 2009 controlled 60 Senate seats – enough to end any filibuster. However, EFCA never got the 60 votes needed to pass the Senate and, thus, never came to the floor. Various compromises weakened the initial act but still never garnered the 60 votes. Of course, the major corporations vigorously opposed EFCA. But many analysts blamed President Obama and Vice President Biden for the defeat.
For example, the Atlantic Monthly concluded that the defeat of EFCA was due to a lack of support from Obama and Biden. “As of a few months ago, labor strategists could accurately claim as many as 58 votes in the Senate, just two shy of the magic 60 needed to avoid a filibuster. But even as President Obama and Vice President Biden dutifully praised card check in speeches, the White House did not put any political muscle into passing it, and they very clearly indicated to congressional leaders that its passage was less important than health care, its economic stimulus efforts, its financial industry regulation proposals…” - Supported major “free” trade deals that decimated U.S. manufacturing while benefiting Wall Street and other corporations. Biden voted for the two largest trade deals in U.S. history (NAFTA and China) which led to the net loss of more than 4 million U.S. jobs most of which were held by union manufacturing workers. And Biden helped lead the fight for the even larger Trans-Pacific Partnership (TPP) that was modeled after NAFTA. The TPP was not enacted due to massive opposition by labor, environment, consumer and religious groups. It should be noted that Bernie Sanders helped lead the fight against NAFTA, the China trade deals and the TPP.
- Biden supported NAFTA which displaced 850,000 U.S. jobs. NAFTA was the most contentious trade deal in modern U.S. history. The U.S. business community, led by the U.S. Chamber of Commerce, supported the deal while the entire labor movement along with many environmental, consumer and religious groups opposed the deal. It became effective in 1994 after President Clinton pushed it through Congress. According to the Economic Policy Institute, NAFTA resulted in the displacement of 850,000 U.S. jobs from 1993-2013. This loss was primarily due to corporations transferring their U.S. production facilities to Mexico where they could still have no tariff access to the U.S. market without having to meet the more stringent U.S. labor and environmental laws while also paying much lower wages to Mexican workers. NAFTA also led to the net loss of 1.2 million Mexican agricultural jobs in Mexico leading to an explosion of emigration to the U.S. Senator Biden of Delaware voted for NAFTA. At a 2019 campaign stop, Biden stated, “And I think that back in the time during the Clinton administration, it [NAFTA] made sense at the moment.”
- Biden supported trade deals with China that cost 3.4 million U.S. jobs. The U.S. greatly aided China’s quest to become a world economic power. In 2001, the Clinton administration pushed Congress into granting Permanent Normal Trade Relation (PNTR) status to China. This meant that China would be treated no differently than any of the other 129 countries with PNTR status – all of whom belonged to the World Trade Organization.
The result was that goods from China would obtain the lower tariffs accorded to other major countries trading with the U.S. This enabled China to enter the World Trade Organization (WTO). By joining the WTO, China committed to lowering its trade barriers and agreeing to a set of global trade standards, practices and the resolution of trade disputes. President Clinton stated at the time, “… it will advance our own economic interests. Economically, this agreement is the equivalent of a one-way street.
It requires China to open its markets — with a fifth of the world’s population, potentially the biggest markets in the world — to both our products and services in unprecedented new ways.” Well, as many predicted at the time, these deals did not benefit U.S. workers. The U.S. trade deficit with China exploded from $83 billion in 2001 to $385 billion in 2018 which led to the net loss of 3.4 million U.S. jobs to China. These trade deals were strongly supported by Big Business as represented by the U.S. Chamber of Commerce and opposed by organized labor and environmental groups. Senator Biden supported and voted for PNTR. - Biden helped lead the fight to adopt the Trans-Pacific Partnership. The Obama administration sponsored, negotiated, and led the effort to get Congress to pass the Trans-Pacific Partnership. This trade deal was modeled after NAFTA and was even called “NAFTA on Steroids.” The TPP included 12 countries ranging from Japan and Vietnam to the U.S., Mexico and Canada covering almost 40% of the world’s economy. The TPP, like NAFTA, would have provided incentives for corporations to transfer their U.S. operations to the other participating countries who had lower labor costs and lower labor and environmental standards while obtaining basically free access to the U.S. market.
Just like NAFTA and the China PNTR, big business including Wall Street supported the deal while labor, environmental, consumer and religious groups opposed the deal. Biden supported and actively lobbied for the TPP and tried to push it through the Senate. And, as vice president, Biden had the power to pass TPP if there was a tie vote in the Senate. Due to strong opposition, the Obama administration did not have the votes to get the TPP passed. However, Biden did not give up: in an article he wrote for Foreign Affairs before the 2016 elections, Biden urged the next administration to push the TPP through the Senate.
Possible Conflicts of Interest in Relation to Bank Loans and Government Contracts to Family Members. Biden’s ties to the banking industry and the government have created other problems. Biden’s family members have obtained unusual loans and government contracts primarily while Biden was in office. An extensive investigative report in Politico has detailed many of these connections. The report states, “Biden’s image as a straight-shooting man of the people, however, is clouded by the careers of his son and brother, who have lengthy track records of making, or seeking, deals that cash in on his name.
There’s no evidence that Joe Biden used his power inappropriately or took action to benefit his relatives with respect to these ventures. Interviews, court records, government filings and news reports, however, reveal that some members of the Biden family have consistently mixed business and politics over nearly half a century, moving from one business to the next as Joe’s stature in Washington grew…. Their ventures, over nearly half a century, have regularly raised conflict-of-interest questions and brought the Biden family into potentially compromising associations.”
For example, MBNA, one of the largest contributors to Biden’s various campaigns, hired Biden’s son, Hunter, as a lobbyist right out of law school and hired him as a consultant from 2001-2005 – the same years that Senator Biden was helping to pass the bankruptcy bill that MBNA and the entire finance industry supported, as discussed above. In the 1970s, when Biden was on the Senate Banking Committee, his brother James, “obtained unusually generous loans from lenders who later faced federal regulatory issues.”
During the Obama years, James became executive Vice-President of Hill International even though he did not have any apparent experience in the construction sector. Hill International won a $1.5 billion contract to build 100,000 homes in Iraq. One analysis of this deal asked and answered the following question, “How did the company get the contract? It helped to have “the brother of the vice president as a partner,” the company’s president allegedly told a group of investors.” Ironically and possibly unfairly, these potential conflicts of interest will be raised as an issue by none other than Donald Trump if Biden wins the Democratic Party nomination.
CONCLUSION: This article started with a question: is Biden correct to portray himself as champion of the middle class against the “Wall Street bankers, CEOs and hedge fund managers?” The answer is no. Biden’s own actions throughout his career have proven that he primarily represents the interests of Wall Street to the detriment of Main Street. He has relied and continues to rely on the campaign contributions of Wall Street and billionaires, including union busting law firms.
He supported and often led the fight for legislation that further consolidated the financial industry, eliminated laws that had curbed Wall Street’s penchant for excessive speculation, and increased protections for banks while eroding protections for consumers. And he supported trade deals that benefitted Wall Street and other big corporations while eliminating 4 million U.S. jobs primarily held by union manufacturing workers. Conversely, he is culpable for the failure to pass legislation that would have helped strengthen unions and protect the rights of consumers.
All these Biden-supported policies actually set the stage for the financial meltdown of 2008 that proved so disastrous to the millions of workers, small businesspeople and communities that actually define Main Street. And these policies also enabled big corporations and the wealthy elite to dominate our politics over the past 45 years during which trillions of dollars have been transferred from Main Street workers and the middle class to Wall Street and billionaires.
Throughout his political career, Biden has been “Uncle Joe” for Wall Street, not Main Street.
Kenneth R. Peres retired as chief economist of the Communications Workers of America. Formerly, he served as economist for the Northern Cheyenne Tribe, the Montana House Select Committee on Economic Development, and the Montana Alliance for Progressive Policy. Ken has held teaching positions at the University of Montana, St. John’s University, Chief Dull Knife College, and the City University of New York. He obtained a PhD in economics from the New School in New York City.
