[Congressional Record Volume 158, Number 133 (Friday, October 5, 2012)]
[Extensions of Remarks]
[Page E1682]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                        ``THE REAL REFERENDUM''

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                           HON. BARNEY FRANK

                            of massachusetts

                    in the house of representatives

                        Friday, October 5, 2012

  Mr. FRANK of Massachusetts. Mr. Speaker, Paul Krugman is absolutely 
correct and every member of Congress should read his thoughtful column 
before voting on any economic matter.

               [From the New York Times, Sept. 30, 2012]

                          The Real Referendum

                           (By Paul Krugman)

       Republicans came into this campaign believing that it would 
     be a referendum on President Obama, and that still-high 
     unemployment would hand them victory on a silver platter. But 
     given the usual caveats--a month can be a long time in 
     politics, it's not over until the votes are actually counted, 
     and so on--it doesn't seem to be turning out that way.
       Yet there is a sense in which the election is indeed a 
     referendum, but of a different kind. Voters are, in effect, 
     being asked to deliver a verdict on the legacy of the New 
     Deal and the Great Society, on Social Security, Medicare and, 
     yes, Obamacare, which represents an extension of that legacy. 
     Will they vote for politicians who want to replace Medicare 
     with Vouchercare, who denounce Social Security as 
     ``collectivist'' (as Paul Ryan once did), who dismiss those 
     who turn to social insurance programs as people unwilling to 
     take responsibility for their lives?
       If the polls are any indication, the result of that 
     referendum will be a clear reassertion of support for the 
     safety net, and a clear rejection of politicians who want to 
     return us to the Gilded Age. But here's the question: Will 
     that election result be honored?
       I ask that question because we already know what Mr. Obama 
     will face if re-elected: a clamor from Beltway insiders 
     demanding that he immediately return to his failed political 
     strategy of 2011, in which he made a Grand Bargain over the 
     budget deficit his overriding priority. Now is the time, 
     he'll be told, to fix America's entitlement problem once and 
     for all. There will be calls--as there were at the time of 
     the Democratic National Convention--for him to officially 
     endorse Simpson-Bowles, the budget proposal issued by the co-
     chairmen of his deficit commission (although never accepted 
     by the commission as a whole).
       And Mr. Obama should just say no, for three reasons.
       First, despite years of dire warnings from people like, 
     well, Alan Simpson and Erskine Bowles, we are not facing any 
     kind of fiscal crisis. Indeed, U.S. borrowing costs are at 
     historic lows, with investors actually willing to pay the 
     government for the privilege of owning inflation-protected 
     bonds. So reducing the budget deficit just isn't the top 
     priority for America at the moment; creating jobs is. For 
     now, the administration's political capital should be devoted 
     to passing something like last year's American Jobs Act and 
     providing effective mortgage debt relief.
       Second, contrary to Beltway conventional wisdom, America 
     does not have an ``entitlements problem.'' Mainly, it has a 
     health cost problem, private as well as public, which must be 
     addressed (and which the Affordable Care Act at least starts 
     to address). It's true that there's also, even aside from 
     health care, a gap between the services we're promising and 
     the taxes we're collecting--but to call that gap an 
     ``entitlements'' issue is already to accept the very right-
     wing frame that voters appear to be in the process of 
     rejecting.
       Finally, despite the bizarre reverence it inspires in 
     Beltway insiders--the same people, by the way, who assured us 
     that Paul Ryan was a brave truth-teller--the fact is that 
     Simpson-Bowles is a really bad plan, one that would undermine 
     some key pieces of our safety net. And if a reelected 
     president were to endorse it, he would be betraying the trust 
     of the voters who returned him to office.
       Consider, in particular, the proposal to raise the Social 
     Security retirement age, supposedly to reflect rising life 
     expectancy. This is an idea Washington loves--but it's also 
     totally at odds with the reality of an America in which 
     rising inequality is reflected not just in the quality of 
     life but in its duration. For while average life expectancy 
     has indeed risen, that increase is confined to the relatively 
     well-off and well-educated--the very people who need Social 
     Security least. Meanwhile, life expectancy is actually 
     falling for a substantial part of the nation.
       Now, there's no mystery about why Simpson-Bowles looks the 
     way it does. It was put together in a political environment 
     in which progressives, and even supporters of the safety net 
     as we know it, were very much on the defensive--an 
     environment in which conservatives were presumed to be in the 
     ascendant, and in which bipartisanship was effectively 
     defined as the effort to broker deals between the center-
     right and the hard right.
       Barring an upset, however, that environment will come to an 
     end on Nov. 6. This election is, as I said, shaping up as a 
     referendum on our social insurance system, and it looks as if 
     Mr. Obama will emerge with a clear mandate for preserving and 
     extending that system. It would be a terrible mistake, both 
     politically and for the nation's future, for him to let 
     himself be talked into snatching defeat from the jaws of 
     victory.

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