He was once considered unquestionably above the fray, but these are hard times for Federal Reserve Chairman Alan Greenspan who has irked Democrats by first backing GWB’s tax cuts and now endorsing the President’s Social Security overhaul plans.
Remember that Greenspan — he of the insufferably boring reports to Congress (if you have insomnia, record it and play it and your problem will be solved), he so beautifully lampooned by The Capitol Steps in a song (Mr. Sandman became Mr. Greenspan) — for many years was considered something of a referee. Now Democrats seemingly accuse him of wading into political waters:
Mr. Greenspan, who has come under fire from Democrats for supporting President Bush’s goal of partly privatizing Social Security, said he supported Mr. Bush’s tax cuts because almost all budget analysts were forecasting trillions of dollars in surpluses that never materialized.
As events turned out, federal deficits rose as tax revenues plunged for three years in a row and spending grew on everything from war costs in Afghanistan and Iraq to education and homeland security. What was expected to be a $5.6 trillion surplus by 2011 is now expected to be at least a $4 trillion deficit by 2015 if Mr. Bush’s tax cuts are made permanent.
“We were confronted at the time with an almost universal expectation amongst experts that we were dealing with a very large surplus for which there seemed to be no end,” Mr. Greenspan told members of the Senate Select Committee on Aging.“I look back and I would say to you, if confronted with the same evidence we had back then, I would recommend exactly what I recommended them,” he continued. “It turns out we were all wrong.”
His biggest critic is New York Senator Hillary Clinton, who is steadily moving herself towards the center of her party:
Mr. Greenspan defended himself after pointed criticism from Senator Hillary Rodham Clinton, Democrat of New York, who said the Fed chairman effectively opened the way for the government to spend surpluses in the Social Security trust fund that were to supposed to have been saved for when the baby boom generation starts to retire.
“Your testimony helped blow the lid off the lockboxes when it came to the size of the tax cut, the extent of the tax cut,” Mrs. Clinton said.
In recent days, Congressional Democrats have begun to criticize Mr. Greenspan more openly than in the past. Senator Harry Reid, Democrat of Nevada and the Senate Democratic leader, accused Mr. Greenspan of being the “biggest political hack” in Washington.
That’s a pretty big distinction in a city filled with big political hacks…
What next? As the battle over Social Security gets more intense, Greenspan probably come under more fire. No matter what it’s no longer unseemly to blast Greenspan. He’ll likely be scrutinized and it will be hinted that he’s just a financial bigwig but as someone who allied with a political stance and party. And so U.S. polarization continues its inexorable, unmerciless, unstoppable spread…
Joe Gandelman is a former fulltime journalist who freelanced in India, Spain, Bangladesh and Cypress writing for publications such as the Christian Science Monitor and Newsweek. He also did radio reports from Madrid for NPR’s All Things Considered. He has worked on two U.S. newspapers and quit the news biz in 1990 to go into entertainment. He also has written for The Week and several online publications, did a column for Cagle Cartoons Syndicate and has appeared on CNN.