Submitted by Elaine Magliaro, Guest Blogger
Have you heard about the Campaign to Fix the Debt? It sounds like an initiative that our country needs at this time. Mark MacKenzie, president of the New Hampshire AFL-CIO, said the campaign “presents itself as a grassroots, bipartisan organization that is committed to lowering our debt. It sounds good, especially in today’s environment of extreme partisanship and political maneuvering.” Mackenzie warns, however, that Fix the Debt’s “major contribution to the conversation over the fiscal cliff is that while the George W. Bush tax cuts for the wealthy and corporations should be off the table, Americans’ retirement security and health care most definitely should [not] be.”
The Institute for Policy Studies claims that the Fix the Debt initiative is driven by business and is actually using the fear of going over the fiscal cliff “as a cover for tax-code changes that would damage our economy.” The institute found that Fix the Debt “has raised $60 million and recruited more than 80 CEOs of America’s most powerful corporations to lobby for a debt deal that would reduce corporate taxes and shift costs onto the poor and elderly.”
Scott Klinger, co-author of a report produced by the institute titled The CEO Campaign to “Fix” the Debt said, “The ‘Fix the Debt’ CEOs are trying to pass themselves off as noble leaders who are willing to compromise in order to save America from financial ruin. In reality, the campaign is a Trojan horse concealing massive corporate tax breaks that would make our debt situation much worse.”
Here are some of the findings of the institute’s report:
- The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not have to pay U.S. federal income taxes on foreign earnings when they bring the profits back to the United States.
- The CEOs backing Fix the Debt personally received a combined total of $41 million in savings last year thanks to the Bush-era tax cuts. The top CEO beneficiary of the Bush tax cuts in 2011, Leon Black of Apollo Global Management, saved $9.9 million on the Bush tax cuts. The private equity fund leader reaped $215 million in taxable income last year just from vested stock.
- Of the 63 Fix the Debt CEOs at publicly held firms, 24 received more in compensation last year than their corporations paid in federal corporate income taxes. All but six of these firms reported U.S. profits last year.
The Institute for Policy Studies says that “corporations leading this campaign are contributing to Americans’ retirement insecurity by funneling enormous sums into their CEO retirement accounts while underfunding their employee pension funds.” It released another report titled A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts. That report analyzed the retirement policies of US corporations leading the campaign to Fix the Debt. Here are some of the reports key findings:
- The 71 Fix the Debt CEOs who lead publicly held companies have amassed an average of $9 million in their company retirement funds. A dozen have more than $20 million in their accounts. If each of them converted their assets to an annuity when they turned 65, they would receive a monthly check for at least $110,000 for life.
- The Fix the Debt CEO with the largest pension fund is Honeywell’s David Cote, a long-time advocate of Social Security cuts. His $78 million nest egg is enough to provide a $428,000 check every month after he turns 65.
- Forty-one of the 71 companies offer employee pension funds. Of these, only two have sufficient assets in their funds to meet expected obligations. The rest have combined deficits of $103 billion, or about $2.5 billion on average. General Electric has the largest deficit in its worker pension fund, with $22 billion.
Christina Wilkie and Ryan Grim (Huffington Post) wrote that the CEOs “who have made a high-profile foray into deficit negotiations have themselves been substantially responsible for the size of the deficit they now want closed.” They also wrote that the companies represented by executives working on the debt campaign “have received trillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholes that virtually eliminate the companies’ tax bills.”
They added that recently “CEOs belonging to what the campaign calls its CEO Fiscal Leadership Council — most visibly, Goldman Sachs’ Lloyd Blankfein and Honeywell’s David Cote — have barnstormed the media, making the case that the only way to cut the deficit is to severely scale back social safety-net programs — Medicare, Medicaid, and Social Security — which would disproportionately impact the poor and the elderly.”
Sarah Anderson, director of the Global Economy Project at the Institute for Policy Studies and co-author of the report, The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks, talked with Amy Goodman on Democracy Now! about the debt campaign and the CEOs involved in the deficit talks. Anderson told Goodman that they were “doing a massive media and lobbying blitz, portraying themselves as the reasonable ones, because they’re calling for both raising revenues and cutting spending. But if you look at the details of their tax plan, you see that they are really just a Trojan horse. They’re pushing for the same old tax breaks for corporations that they’ve been pushing for for about a decade.”
She continued, “And we looked at one of them, which is they want a permanent exemption from U.S. taxes for all of their foreign earnings. And we calculated that the companies in this campaign stand to gain a windfall of as much as $134 billion, if they get this corporate tax break through. And so, people should be very wary of this big ad campaign that they’re about to see in their newspapers across the country. This is just one more corporate attack on our fair taxation system.”
Lloyd Blankfein is the Face of Class Warfare
Goldman Sachs CEO Lloyd Blankfein Proposes Cutting Medicare, Medicaid & Social Security
Wealthy CEOs Want Tax Breaks, Cuts to Poor and Elderly
SOURCES & FURTHER READING
Fix The Debt CEOs Shorting Their Employees’ Retirement Funds (Crooks and Liars)
The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks (Institute for Policy Studies)
Executive Excess 2012: The CEO Hands in Uncle Sam’s Pocket (Institute for Policy Studies)
MacKenzie: Fix the Debt would do so on backs of the middle class (Nashua Telegraph)