Liberals continue to be skeptical of Peterson, since he originally advocated for just overhauling the entitlement programs. Many progressives see his fight as one waged to primarily shrink the size of Medicare, Medicaid, and the social safety net, rather than to sincerely deal with the tax code or deficit. Peterson disagrees with this characterization, saying that one area he’s most interested in is preserving programs like Social Security for the needy.
“He has misrepresented the nature of the crisis, implying that we have a deficit crisis because we have out-of-control spending. The reality is very simple. We have a deficit crisis because the economy collapsed,” says Dean Baker, an economist and founder of the Center for Economic and Policy Research.
One of Peterson's most interesting traits is that he changed his approach in the past few years to better suit this particular political climate. Rather than simply calling for changes to the entitlement programs, his “go big” approach now includes proposed tweaks in tax policy and calls for revenue alongside cuts to spending and changes to Medicare. He sat out endorsing a candidate during the presidential race because he wants to attract bipartisan support for his plans, but he’s always identified as a moderate Republican.
Though his groups advocate for politicians to take brave actions to tackle the deficit, his foundation has funded the creation of policy proposals from liberal groups that care far more about job creation and the safety net than immediate debt-reduction measures.
Peterson has also learned to take a less visible role publicly, opting instead to fund outside organizations to advocate on behalf of his plans and casting himself as patron and curator of diverse ideas and high-level people. This has made a difference in advancing his agenda, according to people close to him. “Pete is a great guy, but he is a lightning rod because he is a billionaire. He worked for Nixon; he made his money on Wall Street. And for a long time, he was solely focused on Medicare and Social Security,” says Dave Walker, former CEO of the Peterson Foundation and the founder of the Comeback America Initiative.
Peterson’s reach in D.C. was on full display at a recent fiscal conference, sponsored by his foundation roughly one week after the election. Just as President Obama and congressional leaders met at the White House to discuss the fiscal cliff, Peterson convened his own deficit-reduction crowd. On the seventh floor of the Newseum, dressed in a dark suit, pink tie, and pink pocket square, Peterson welcomed a long list of lawmakers, current and former administration officials, and think-tank wonks who spoke about the need to tackle the fiscal cliff and a 2013 budget deal.
“We would not be here if it wasn’t for the Peterson Foundation and Pete Peterson. They laid the groundwork, and we stand here on their shoulders,” said Erskine Bowles, the former chief-of-staff for President Clinton and one of the architects of the Simpson-Bowles deficit-reduction plan.
Peterson has certainly created an ongoing drumbeat for a grand budget deal. The big question is whether any deal will include elements of the Simpson-Bowles plan or others that Peterson prefers. It’s also unclear whether his ideas have gained enough traction to penetrate the consciousness of the tiny group of staffers and elected officials who ultimately will determine the contours of the negotiation.
Deal or no deal, “Pete will soldier on,” says William Novelli, former CEO of AARP and a member of the Peterson Foundation advisory board.
He has created an apparatus of deficit hawks that will long outlast the demands of the fiscal cliff; it’s so robust now that it’s like the budget community’s version of the military-industrial complex. His son, Michael, also seems prepared to carry out Peterson’s legacy as the CEO of the foundation.
This means that Peterson is here to stay as D.C.’s richest deficit hawk. Not a resident of the city, per se, but someone who influences its conversation — and the fiscal cliff should have little bearing on that role, regardless of whether we jump off the cliff or avert it.
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