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Spending $1 Billion to Restore Fiscal Sanity

July 14, 2008, Nyt, Spending $1 Billion to Restore Fiscal Sanity, by John Harwood.

Gaffes have commanded presidential campaign headlines lately, including Carleton S. Fiorina’s remarks on Viagra and health insurance, and the Rev. Jesse Jackson’s vulgar criticism of Senator Barack Obama. Peter G. Peterson wants people to focus on what he considers real news: the nation is going broke.

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Fred R. Conrad/The New York Times

Peter G. Peterson


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Because he wasn’t born yesterday, Mr. Peterson, co-founder of the Blackstone Group and a secretary of commerce under President Richard M. Nixon, will spend $1 billion in an effort to get the public’s attention. The money, which comes from the windfall Mr. Peterson received when Blackstone went public last year, will finance a media blitz, starting with a documentary, “I.O.U.S.A.”

The film aims to startle voters and politicians alike, and summon them to the task of closing the long-term imbalance between what the government will take in and what it has promised to pay out, most notably through Social Security and Medicare.

Mr. Peterson, 82, says he yearns for the can-do spirit that helped politicians forged by the Depression finance the G.I. Bill of Rights, the Interstate highway system and the Marshall Plan from the ashes of World War II. Yet he is uncertain of finding it through the torrent of trivia from the 21st-century politics of rapid response teams, microtargeting, cable television rants and angry bloggers.

“Has something fundamental happened to the character of our people or our societal structure, or has no one stepped up to provide the leadership?” Mr. Peterson asked. “We’re not going to know that until we try.”

Low Priority

Budget-balancing rarely receives more than cursory attention in any campaign. It is getting even less in this one, when a weak economy has the two major-party candidates emphasizing the financial salve they would provide anxious voters.

Mr. Obama recommends his $80 billion in tax cuts for working families and retirees, his $65 billion-a-year plan to expand access to health care coverage, and his call for a $50 billion economic stimulus package. Last week, Jason Furman, his economic policy adviser, disputed the calculation by the nonpartisan Tax Policy Center that Mr. Obama had proposed a net tax increase by raising rates on affluent taxpayers; the center, Mr. Furman said, had failed to count tax credits for health care that Mr. Obama would distribute.

Senator John McCain proposes $100 billion in new tax cuts for corporations, $65 million for individuals by doubling the personal tax exemption for dependents, and a gas tax holiday on top of the Bush tax cuts he would make permanent. Mr. McCain pledges to somehow close a budget deficit topping $400 billion, but has not specified how.

Their emphasis is no surprise. In a recent Pew Research Center poll, the federal deficit ranked behind the economy, education, jobs, health care, energy, Social Security and Iraq among voters’ priorities.

Those rankings are precisely what Mr. Peterson hopes to change. The Web site of the Peter G. Peterson Foundation flashes a frightening fiscal fact: The looming retirement of 78 million baby boomers has generated unpaid entitlement obligations that are triple the size of the entire economy — $175,000 for each American.

“We just need fiscal sanity,” said David M. Walker, the foundation’s president and a former comptroller general. He warns that looming debt will ultimately make today’s housing and financial market crises seem like small change.

Though Mr. Peterson has endorsed Mr. McCain, his efforts to control debt are bipartisan, and he has enlisted Robert E. Rubin, President Bill Clinton’s treasury secretary, to make his case. The foundation does not expect the candidates to propose comprehensive solutions while chasing votes; instead, it will pursue the more limited goal of dissuading the candidates from ruling out potential solutions.

Money Talks

At the center of Mr. Peterson’s plan lies “I.O.U.S.A.,” which will be screened for the news media in Washington on Monday and opens in 400 theaters next month. Directed by Patrick Creadon, who shot “Wordplay,” about crossword-puzzle enthusiasts, “I.O.U.S.A.” hopes to give as much cachet to long-term fiscal policy as “An Inconvenient Truth” gave to environmentalism.

Mr. Peterson’s foundation is planning an active Internet strategy, tapping bloggers and social networks to reach young voters, who typically pay little heed to far-off fiscal obligations. In early 2009, as the new president takes office, the foundation will try to draw attention with programming on public television, and possibly television advertisements and infomercials.

The effort resembles those of public policy advocacy groups, with a big exception: the money Mr. Peterson has put behind it. After decades in and around public life, he knows that is his only chance to make an impact.

“You can buy a lot of airtime” with $1 billion, Mr. Peterson said. “People are going to hear from us.”

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