What You Should Know about the Campaign to Fix the Debt and the CEOs Involved in Deficit Talks

FixtheDebtReportSubmitted 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


Fix the Debt sounds promising, but the authors- the CEOs- broke it (Nolan Chart)

Five Job-Destroying CEOs Trying to “Fix” the Debt by Slashing Corporate Taxes and Cutting Social Security Benefits (AlterNet)

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)

A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts (Institute for Policy Studies)

Executive Excess 2012: The CEO Hands in Uncle Sam’s Pocket (Institute for Policy Studies)

CEO Council Demands Cuts To Poor, Elderly While Reaping Billions In Government Contracts, Tax Breaks (Huffington Post)

‘Fix The Debt’ CEOs Underfund Employee Retirement, Demand Cuts For Elderly (Huffington Post)

As Talks Begin on “Fiscal Cliff,” Report Warns “Fix the Debt” a Front for More Corporate Bailouts (Democracy Now!)

MacKenzie: Fix the Debt would do so on backs of the middle class (Nashua Telegraph)

The Campaign to Fix the Debt CEO Fiscal Leadership Council

50 thoughts on “What You Should Know about the Campaign to Fix the Debt and the CEOs Involved in Deficit Talks

  1. combined with the right to work laws that are popping up all over we are really getting Scrooged Right and left.

  2. Combined with right to work laws, We are getting scrooged And turning into a two-class society: the haves and the have nots. This is a disease that feeds on itself. Pretty soon the corporations will all but exhaust the middle class and have no 1 left to market to.

  3. 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.”

    After the Hostess bankruptcy can we call these planned underfundings

    The New Twinkie Defense.

  4. WED NOV 14, 2012
    ‘Fix the Debt’ operates as a front for corporate tax breaks and cuts in government social programs

    A key element of the campaign is the proposed shift to a territorial tax system. The way things work now is that, regardless of where U.S.-headquartered corporations make their profits, they owe U.S. taxes on them at a top tax rate of 35 percent. They get a credit for foreign taxes paid. Profits from any investments deemed to be made permanently overseas are exempted unless the money is brought back to the States. So far, so good.

    But in many cases when the profits are not invested permanently overseas, corporations tuck them away in tax havens such as Bermuda and the Cayman Islands. If they brought these lightly taxed or not taxed at all profits back to the States, they would have to pay at the 35 percent rate. A territorial tax system that only taxes domestically earned income would allow corporations to “repatriate” those profits without coughing up a nickel to the government. The Obama administration has been cool to the idea of a territorial tax system, while Vice President Joe Biden has spoken out adamantly against it.

    Klinger and Anderson focused on 63 of the more than 80 companies that are part of the Fix the Debt campaign and found, through their 10K filings, that they hold $418 billion off-shore. Other sources estimate that the total stashed away by Fortune 500 companies is $1.5 trillion or considerably more.

    The biggest potential winners [of a territorial system] are General Electric, which could reap a tax windfall of as much as $35.7 billion on its overseas earnings stash of $102 billion, and Microsoft, which could garner a savings of $19.4 billion on its $60.8 billion in accumulated foreign earnings.
    A territorial system would give companies additional incentives to disguise U.S. profits as income earned in tax havens in order to avoid paying U.S. income taxes.

    How does Microsoft finagle this disguise? Anderson writes:
    A Senate investigation this year shed light on this question. They found that Microsoft takes the patents for software developed at its U.S. research facilities and registers them in tax haven countries. That way, when a U.S. customer buys a copy of Microsoft Office, a hefty chunk of the profits is recorded in no-tax zones.

  5. The Obscenely Rich Men Bent on Shredding the Safety Net
    By Lynn Parramore, senior editor at Alternet and founder of Recessionwire.

    New York magazine calls it a “Mass Movement for Millionaires.” The New York Times’ Paul Krugman sums up the idea: “Hey, sacrifice is for the little people.”

    The Campaign to Fix the Debt is a huge, and growing, coalition of powerful CEOs, politicians and policy makers on a mission to lower taxes for the rich and to cut Social Security, Medicare and Medicaid under the cover of concern about the national debt. The group was spawned in July 2012 by Erskine Bowles and Alan Simpson, architects of a misguided deficit reduction scheme in Washington back in 2010. By now, the “fixers” have collected a war chest of $43 million. Private equity billionaire Peter G. Peterson, longtime enemy of the social safety net, is a major supporter.

    This new Wall Street movement, which includes Republicans and plenty of Democrats, is hitting the airwaves, hosting roundtables, gathering at lavish fundraising fêtes, hiring public relations experts, and traveling around the country to push its agenda. The group aims to seize the moment of the so-called “fiscal cliff” debate to pressure President Obama to concede to House Republicans and continue the Bush income tax cuts for the rich while shredding the social safety net. The group includes Goldman Sachs’ Lloyd Blankfein, JPMorgan Chase’s Jamie Dimon, Honeywell’s David Cote, Aetna’s Mark Bertolini, Delta Airlines’ Richard Anderson, Boeing’s W. James McNerney, and over 100 other influential business honchos and their supporters.

    Corporations represented by the fixers have collected massive bailouts from taxpayers and gigantic subsidies from the government, and they enjoy tax loopholes that in many cases bring their tax bills down to zero. Sometimes their creative accountants even manage to get money back from Uncle Sam. For instance, according to Citizens for Tax Justice, Boeing has paid a negative 6.5 percent tax rate for the last decade, even though it was profitable every year from 2002 through 2011.

    These CEOs talk about shared sacrifice, but it seems that they don’t intend to share anything but your retirement money with their wealthy friends. As New York mag reports:

    Most on-the-record comments are a mishmash of platitudes about shared sacrifice and working together for the good of the country. But interviews with a number of organizers and CEO council members point to a massive networking effort among one-percenters — one that relies on strategically exploiting existing business relationships and appealing to patriotic and economic instincts.

  6. Fighting Fiscal Phantoms
    Published: November 25, 2012

    These are difficult times for the deficit scolds who have dominated policy discussion for almost three years. One could almost feel sorry for them, if it weren’t for their role in diverting attention from the ongoing problem of inadequate recovery, and thereby helping to perpetuate catastrophically high unemployment.

    What has changed? For one thing, the crisis they predicted keeps not happening. Far from fleeing U.S. debt, investors have continued to pile in, driving interest rates to historical lows. Beyond that, suddenly the clear and present danger to the American economy isn’t that we’ll fail to reduce the deficit enough; it is, instead, that we’ll reduce the deficit too much. For that’s what the “fiscal cliff” — better described as the austerity bomb — is all about: the tax hikes and spending cuts scheduled to kick in at the end of this year are precisely not what we want to see happen in a still-depressed economy.

    Given these realities, the deficit-scold movement has lost some of its clout. That movement, by the way, is a hydra-headed beast, comprising many organizations that turn out, on inspection, to be financed and run by more or less the same people; dig down into many of these groups’ back stories and you will, in particular, find Peter Peterson, the private-equity billionaire, playing a key role.

    But the deficit scolds aren’t giving up. Now yet another organization, Fix the Debt, is campaigning for cuts to Social Security and Medicare, even while making lower tax rates a “core principle.” That last part makes no sense in terms of the group’s ostensible mission, but makes perfect sense if you look at the array of big corporations, from Goldman Sachs to the UnitedHealth Group, that are involved in the effort and would benefit from tax cuts. Hey, sacrifice is for the little people.

  7. Nice Polite Republican’s radio had a bit on Morning Edition a couple weeks ago where they talked to 6 economists that they CLAIM crossed the spectrum from con to lib. There were only two things the bozos on that bus agreed to – remove the home mortgage interest deduction and stop taxing businesses. I almost ripped the radio out of the car!

    If they can additionally gut Social Security and Medicare – which have not only paid for themselves but funded over 3 trillion dollars of the Reagan/Bush tax cuts they will have competed a feat I assumed to be impossible, the sheep will have slaughtered themselves.

  8. I have been reading up on the debt ceiling. It was created by congress during the time of WW-I, and is nothing more than a bookkeeping artifice. From what I have read, it may even be unconstitutional, since it flies in the face of the ‘full faith and credit’ clause. How can a statute passed by a legislative body trump the Constitution? All the debt ceiling does is limit whether the government can pay its bills for services they have already agreed to pay. If I told the electric company their bill exceeded my own debt ceiling and I was not going to pay it, I would be sitting here in the dark.

    Robert Reich

    Democrats, here are eight principles to guide you in the coming showdown over the fiscal cliff:

    ONE: HOLD YOUR GROUND. The wealthy have to pay their fair share of taxes. That’s what the election was all about, and we won. It’s only fair they pay more. They’re taking home record share of national income and wealth, and have lowest effective tax rate in living memory.

    TWO: NO DEAL IS BETTER THAN A BAD DEAL. You’re in a strong bargaining position. If you do nothing, the Bush tax cuts automatically expire in January, and we go back to rates during Clinton administration. Which isn’t such a bad thing. As I recall we had a pretty good economy during the Clinton years.

    THREE: MAKE REPUBLICANS VOTE ON EXTENDING THE TAX CUTS JUST FOR THE MIDDLE CLASS. After all the Bush tax cuts expire, have Republicans vote on an extending the Bush tax cut just for the middle-class. If they refuse and try to hold those tax cuts hostage to tax cuts for the wealthy, it will show whose side they’re on. They’ll pay the price in 2014.

    FOUR: DEMAND HIGHER TAX RATES ON WEALTHY, NOT JUST LIMITS ON DEDUCTIONS. Don’t fall for Republican offers to limit some tax deductions on the wealthy. Demand we go back to higher tax rates on the wealthy and eliminate their unfair tax loopholes, so they truly start paying their fair share.

    FIVE: DON’T CUT SAFETY NETS. Don’t sacrifice Medicare or Social Security, or programs for the poor. Americans depend on these safety nets and can’t afford any benefit cuts.

  10. Why We Should Stop Obsessing About The Federal Budget Deficit
    Robert Reich
    Sunday, November 18, 2012

    I wish President Obama and the Democrats would explain to the nation that the federal budget deficit isn’t the nation’s major economic problem and deficit reduction shouldn’t be our major goal. Our problem is lack of good jobs and sufficient growth, and our goal must be to revive both.

    Deficit reduction leads us in the opposite direction — away from jobs and growth. The reason the “fiscal cliff” is dangerous (and, yes, I know – it’s not really a “cliff” but more like a hill) is because it’s too much deficit reduction, too quickly. It would suck too much demand out of the economy.

    But more jobs and growth will help reduce the deficit. With more jobs and faster growth, the deficit will shrink as a proportion of the overall economy. Recall the 1990s when the Clinton administration balanced the budget ahead of the schedule it had set with Congress because of faster job growth than anyone expected — bringing in more tax revenues than anyone had forecast. Europe offers the same lesson in reverse: Their deficits are ballooning because their austerity policies have caused their economies to sink.

    The best way to generate jobs and growth is for the government to spend more, not less. And for taxes to stay low – or become even lower – on the middle class.

    (Higher taxes on the rich won’t slow the economy because the rich will keep spending anyway. After all, being rich means spending whatever you want to spend. By the same token, higher taxes won’t reduce their incentive to save and invest because they’re already doing as much saving and investing as they want. Remember: they’re taking home a near record share of the nation’s total income and have a record share of total wealth.)

    Why don’t our politicians and media get this? Because an entire deficit-cutting political industry has grown up in recent years – starting with Ross Perot’s third party in the 1992 election, extending through Peter Petersen’s Institute and other think-tanks funded by Wall Street and big business, embracing the eat-your-spinach deficit hawk crowd in the Democratic Party, and culminating in the Simpson-Bowles Commission that President Obama created in order to appease the hawks but which only legitimized them further.

    Most of the media have bought into the narrative that our economic problems stem from an out-of-control budget deficit. They’re repeating this hokum even now, when we’re staring at a fiscal cliff that illustrates just how dangerous deficit reduction can be.

    Deficit hawks routinely warn unless the deficit is trimmed we’ll fall prey to inflation and rising interest rates. But there’s no sign of inflation anywhere. The world is awash in underutilized capacity As for interest rates, the yield on the ten-year Treasury bill is now around 1.26 percent – lower than it’s been in living memory.

    In fact, if there was ever a time for America to borrow more in order to put our people back to work repairing our crumbling infrastructure and rebuilding our schools, it’s now.

  11. Elaine,

    You expect it to get better when people like this control….it reminds me of what I’ve read of the Rothschilds……

  12. 9 Greedy CEOs Trying to Shred the Safety Net While Pigging Out on Corporate Welfare
    Financiers, polluters and other biz honchos team up to strangle the economy.
    AlterNet / By Lynn Stuart Parramore

    November 26, 2012 | A gang of brazen CEOs has joined forces to promote economically disastrous and socially irresponsible austerity policies. Many of those same CEOs were bailed out by the American taxpayer after a Wall Street-driven financial crash. Instead of a thank-you, they are showing their appreciation in the form of a coordinated effort to rob Americans of hard-earned retirements, decent medical care and relief for the poorest.

    Using the excuse of a phony, manufactured crisis known as the “fiscal cliff” – which isn’t a crisis at all, as economist James K. Galbraith has succinctly explained — they are gearing up to pull the wool over the public’s eyes by cutting Social Security, Medicare and Medicaid. The CEOs are part of the Fix the Debt campaign run by the Peter Peterson -backed Center for a Responsible Federal Budget, which plans to unleash tens of millions pushing for a deficit reduction deal that favors the rich.

    You can be sure that many more CEOs in addition to the names on the list below sympathize with plans to shred the social safety net and enjoy windfall tax breaks. But these Scrooges are so bold as to publicly announce their desire to pick the pockets of fellow Americans while simultaneously pigging out at the corporate welfare trough. Multitasking!

    A generation ago, an American CEO would think twice about announcing utter disregard not only for his neighbors and employees, but also for the economy, which can’t prosper when income is consistently redistributed upward (see Nobel laureate Joseph Stiglitz’s The Price of Inequality for more on that theme). But in the present culture — even after the Occupy Wall Street movement – these business barons feel perfectly comfortable trumpeting their desire to get richer at your expense.

    Here’s a sample of the Fix the Debt CEO Council Hall of Shame.

    1. Lloyd Blankfein, chairman and CEO, Goldman, Sachs & Co. Blankfein, infamous for describing his financial activities as “God’s work,” shared his attitude toward society with CBS news recently. He explained his keen desire to see Americans lowering their sights for the future. You really have to watch the interview to get the full flavor of Blankfein’s smug assurance that predation can be sold as concern for the nation’s well-being. In addition to trotting out several myths about Social Security’s design and functions, including the bogus notion that retirement age must be raised , he gives a pithy summary of what life is going to be like for the 99 percent:

    “You’re going to have to do something, undoubtedly, to lower people’s expectations of what they’re going to get, the entitlements, and what people think they’re going to get, because you’re not going to get it.”

    Not if Lloyd Blankfein has anything to do with it. He calls it managing expectations. Here’s another word: theft.

    Since the financial crash, Blankfein’s company, Goldman Sachs, has received tens of billions of dollars in what the Economic Policy Journal describes as “direct and indirect succor from the Fed.” In sharp contrast to average Americans, when Goldman needed help in the 2008 crisis, a friendly Federal Reserve let Goldman turn into a commercial bank almost overnight, so it could go to the Fed for help 24/7.

    2. Jeffrey Immelt, chairman and CEO, General Electric Company . In 2011, President Obama welcomed outsourcing pioneer Jeffrey Immelt to his White House inner circle as chair of a newly created jobs council – a move that was a sharp slap in the face to American workers. Immelt returned the favor by dumping Obama in favor of Mitt Romney in the recent election .

    Obviously, supporting disastrous financial deregulation, dodging taxes and helping to destroy American manufacturing has not satisfied Immelt. He’d like to add insult to injury by making sure that people who have been screwed by the reckless activities of short-sighted corporate titans like himself are left to starve in their golden years and go without medical care. And as for the poor, well, couldn’t they be just a little bit poorer? Immelt thinks that would be swell.

    After the 2008 crash, the government gave a giant boost to hard-pressed GE Capital, the company’s financing arm, through the Temporary Liquidity Guarantee Program. GE has also helped itself to enormous taxpayer-funded subsidies, especially in green energy. And guess how much GE paid in taxes in 2010? Nothing. In fact, using what the New York Times describes as its “innovative accounting practices,” it claimed a tax benefit of $3.2 billion!

  13. Fiscal Cliff Primer: Should Congress Take Social Security Advice From Bailed-Out Goldman Sachs CEO Lloyd Blankfein?
    By Zach Carter & Jason Linkins

    Goldman Sachs CEO Lloyd Blankfein urged Congress and President Barack Obama to cut Social Security, arguing that the program cannot “afford” to keep funding longer modern retirements. He left out that Social Security currently has a $2.7 trillion surplus and could strengthen its financial footing further by simply taxing more of the income of wealthy executives like Blankfein himself.

    During an interview with CBS News’ Scott Pelley on Monday, Blankfein said that entitlement programs including Social Security “have to be slowed down and contained.”

    “Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career,” Blankfein said. “So there will be things that, you know — the retirement age has to be changed. Maybe some of the benefits have to be affected. Maybe some of the inflation adjustments have to be revised.”

    In fact, people do not receive full Social Security benefits until age 67, and the average worker receives those benefits for 16.1 years. Raising the retirement age would disproportionately hurt low-income workers, who tend to live shorter lives than wealthier workers.

    Moreover, without any changes, Social Security’s existing surplus is projected to keep the program solvent through 2033. That solvency could be further extended, without resorting to benefits cuts, by lifting the earnings cap on rich workers. Under current law, workers and employers pay Social Security taxes only on the first $110,100 of an individual’s income. Any earnings beyond that are not subject to the tax, which is currently 6.2 percent for workers, plus an additional 6.2 percent for their employers.

    Lifting the cap and making all income subject to Social Security tax would inject billions of dollars in additional revenue into the program.

  14. Elaine,

    Brilliant article that encompasses the entirety of the fiscal fraud being perpetrated against us by the wealthy elite of this Nation. I will copy it for my files in its entirety as a great reference for future comments. What interests me as a former Psychotherapist is what is motivating these me besides greater profits and income. Once a person achieves the financial success of these people, when does the need to accumulate more wealth end, if ever? The conundrum is their opposition to programs like SS, Medicare and Medicaid that benefit the less wealthy in society. Why wouldn’t they want people with lower incomes taken care of since it would benefit all of society? I can offer a few explanations and perhaps they as an aggregate answer the question.

    1. They view society as the “makers and the takers”. They “make” and the rest of us parasitically take. This is illustrated by Romney’s 47% remark and the yea saying echoes of it among CEO’s like Blankfein. They want to punish the “takers” for their “non-contribution” to society.

    2. Perhaps as studies have shown the majority of them are sociopaths and so have little but disdain for anyone else.

    3. As I’ve put forth elsewhere they are part of a “Return to Feudalism” movement with them as the “Nobility”. The overwhelming majority of us have to be reduced to poverty and serfdom, so that they ca clearly be identified as the “worthy nobles”.

    4. They represent a generation of people who read Ayn Rand and their ego driven critical faculties are such that they believed her self-serving drivel.

    5. They are abysmally imperceptive and have risen to their positions either by luck of birth, by relentless clawing to the top via the “Peter Principle and don’t deserve the high offices to which they have been raised.

    6. All, or some of the above.

  15. Mike S.,

    “What interests me as a former Psychotherapist is what is motivating these me[n] besides greater profits and income. ”

    I’d like to know what motivates them too. They’re self-absorbed, greedy, and amoral.


    Bernie Sanders: When Is Enough Enough? (December 2010)

  16. ‘Fix the Debt’ Shows Its True, Billionaire-Funded, Anti-Tax Colors
    Richard (RJ) Eskow
    Posted: 12/03/2012

    “Fix the Debt” is allegedly an impromptu alliance of America’s largest CEOs. But it’ really the latest manifestation of a perenially right-wing, pro-billionaire, pro-corporate lobby — one created years ago by hedge fund manager and former Nixon Cabinet member Pete Peterson. It has assumed many shapes, forms, and identities over the years, always in the guise of a noble and “bipartisan” effort to address what it describes as the “urgent” issue of the Federal deficit.

    Any organization that promotes a policy agenda may wind up advocating for goals that benefit some groups more than others. What’s surprising is how routinely this network of organizations undermines its own stated goal of deficit reduction, and how starkly and consistently it serves the self-interest of its sponsors.

    Now, confronted with some runaway executives and an aggressive Senator, this allegedly “nonpartisan” group and its most public spokesperson are finally showing their true colors. Behind all the “independent” rhetoric, it’s a network of covert Grover Norquists out to protect tax breaks for millionaires, billionaires, and corporations.

    The Thing

    Peterson’s Hydra-headed operation has gone by many names over the years, including the “Comeback America Initiative,” “The Can Kicks Back,” and the Committee for a Responsible Federal Budget, to name just a few. But while the guises have been many, the message has always been the same: Gut Social Security and Medicare. Shrink government. And absurdly, reduce tax rates for millionaires and corporations in the name of deficit reduction.

    Like the creature from The Thing, it assumes many forms: A group of young people “spontaneously” organizing themselves. A sudden movement to have town hall meetings on the deficit. And now, America’s CEOs sharing their selfless concern for the national debt’s impact on others.

    Whenever it morphs itself it tries to present each new form as a spontaneous reaction by some segment of the population. But the makeshift illusion of grassroots support is hard to maintain, given that a small group of key players forms the core cadre of this shapeshifting antigovernment entity: Erskine Bowles. Alan Simpson. David Walker.

  17. Elaine M, Fantastic article and links.

    “This new Wall Street movement, which includes Republicans and plenty of Democrats, is hitting the airwaves, hosting roundtables, gathering at lavish fundraising fêtes, hiring public relations experts, and traveling around the country to push its agenda.”

    It seems as if the “Sugar Daddies” of the Tea Party are coming out of their
    closets and trying to gather more plebiscites.

    I suggest even more transparency and light be shone on these Masters of Hoard. Call them what they are.

    …..”The Me Party” … or more crudely,… “The Eff You Party”

  18. Our Nitwit CEOs
    What the smart guys don’t understand about politics.
    By Paul Begala
    Dec 3, 2012

    Businesspeople are fond of saying politicians don’t know anything about business. While in the main that is true, the opposite is also true: business geniuses are often political numskulls.

    Case in point: the Campaign to Fix the Debt—a dream team of CEOs, including registered Democrats like Goldman Sachs’s Lloyd Blankfein and Honeywell CEO (and Obama supporter) David Cote. These are smart people. Smart enough that they can grasp the fiscally obvious: America must pay down its debt. And it can only do so through a combination of increased revenue and restrained spending.

    So far so good. Fix the Debt should follow the lead of billionaire investor Warren Buffett, who campaigns for higher taxes for upper-income Americans. Buffett’s courage, clarity, and common sense make it easier for Republicans to do the responsible thing. After all, Buffett is hardly a Marxist. Drawing on decades of experience during which he made billions, Buffett notes that when both capital-gains and income-tax rates were much higher than today, the economy boomed.

    This is elementary. And yet some of the platinum-plated CEOs currently sounding off about the politics of debt reduction don’t seem to understand their role. Instead of patriotically calling on their fellow millionaires to pay a little more, they are lecturing the poor and the middle class on the need to cut entitlements, and even ­advocating—get this—zero taxes on corporations. That’s right, zero. Honeywell’s Cote has actually called for a corporate tax rate of zilch-point-nada. As the great political mind Homer Simpson might say, “D’oh!”

    Millionaire CEOs calling for higher taxes on the rich is Nixon to China. Millionaire CEOs calling for cutting health care for the elderly while eliminating taxes on corporate profits is more like Mao to China. They no doubt have their hearts in the right place. Debt is a major long-term challenge, and the cost of Medicare and Medi­caid has exploded, as has private-sector health care.

    But what Blankfein, Cote, and other business titans don’t seem to grasp is that struggling seniors or families with a special-needs child are not eager to hear CEOs tell them, as Blankfein recently did, “You’re going to have to undoubtedly do something to lower people’s ­expectations—the entitlements and what people think that they’re going to get, because … they’re not going to get it.” It’s Blankfein who doesn’t get it. I’m sure he’s a wiz at whatever it is Goldman Sachs does, but he stinks at what political leaders do: build support for tough choices.

    An agenda of reducing Medicare for your grandma while simultaneously eliminating taxes on big corporations is political suicide. I asked one of the toughest, smartest professionals on Capitol Hill—someone deeply committed to finding a deal to pay down the debt—whether the CEOs were helping. His response nearly burned a hole in my computer screen:

    “These fools are under the belief that ideas like limiting deductions on individuals is a good plan to help raise revenue for the deficit, yet at the same time they think we are going to lower the corporate tax rate, which we know will increase the deficit! They turn around and say things like they will be open to closing loopholes, but we both know they will fight like lions to protect their favorite tax breaks. And then, can you imagine a member of Congress choosing to lower corporate taxes while telling Granny she has to wait another two years before getting Medicare!!!!!!”

  19. Un-Shared Sacrifice: How ‘Fix the Debt’ Companies Buy Washington Influence & Rig the Game
    November, 2012

    Executive Summary

    A coalition of 95 companies, including some of the country’s largest corporations, are urging Congress to “Fix the Debt,” through a plan that mostly hurts middle class families while preserving tax breaks and windfalls for big corporations.

    The coalition is kicking off a splashy $80 million lobbying campaign to “Fix the Debt,” a plan that, according to the Institute for Policy Studies, consists of two basic points: “pro-growth” corporate tax reform and “reforming” earned-benefit programs. In plain English, their goal is to make cuts to Medicare and Social Security while securing windfalls for some of the country’s biggest corporations—a plan that’s nowhere near balanced.

    But the $80 million being spent on this campaign is only part of the story. Playing the influence game isn’t new to most of these companies, who have spent big over the past few years on lobbying and campaign contributions by their corporate PACs and CEOs.

    Over the coming weeks and months, Congress will grapple with the so-called “fiscal cliff” and tax reform. Many of the loudest high-paid voices, like those in this coalition, have spent years building up influence with politicians and these companies and their lobbyists will be using that to their advantage.


    – The 95 companies that make up the “Fix the Debt” coalition have spent nearly $1 billion over the past four years on lobbying and campaign contributions.

    – Twenty-two publicly traded companies that are members of the coalition have spent more on lobbying in the past three years than they have on taxes.

    – General Electric (GE) is the top influence spender of these companies. Since 2009, GE, its CEO, and political action committee (PAC) have spent a combined $112 million on lobbying and campaign contributions.

    – The influence peddling is bipartisan. 57 percent of the contributions spent by the CEOs and PACs of these companies goes to Republicans and 43 percent goes to Democrats.

  20. The ‘Fix the Debt’ Coalition of the Very Wealthy: The Rest of Us Need to Pay Attention
    by Joyce Arnold on December 4, 2012

    The Fix the Debt coalition is gaining more attention, no doubt in large part because its members are being very vocal and public. They are not shy about making known their interpretation and solutions of what ails the economy. And of course, another neat crisis – replete with “fiscal cliff” and “doomsday” gamemanship – is the perfect opening for them to swoop in and save the day. More accurately, save the day, and the foreseeable future, for themselves.

    I wrote about this earlier in Austerity, Imposed From the Top To Bottom: The ‘Fix the Debt’ Spin. These spins have a long history. It’s only “rich” for those who create them: debt ceiling, shared sacrifice, fiscal cliff, austerity, trickle-down economics, etc. As I said, “It’s about income inequality, and the difficult-to-devastating consequences in the lives of the 99%. And it’s about a government largely controlled by those at the top.”


    Austerity, Imposed From the Top To Bottom: The ‘Fix the Debt’ Spin
    by Joyce Arnold on November 27, 2012

    Some information and analysis follows, as we continue considering the DC created “fiscal cliff” (for example, see Fiscal Cliff & Shared Sacrifice: If You Build It, They Will Come), the debt/deficit, austerity, shared sacrifice, and all the other spins, going on for decades, on why the tiny number of people at the very top deserve to get whatever they want. I still think Occupy has it right, in a big picture way: it’s about income inequality, and the difficult-to-devastating consequences in the lives of the 99%. And it’s about a government largely controlled by those at the top.

    Shared sacrifice, the DC-designed “fiscal cliff,” whatever the latest spin – it’s imposed from that “top” to the “bottom” dwellers. We’re simply in the “it’s a big news story” moment of yet another spin on the same old story. But hey, it’s got more people talking again, so that’s worth something. Unless, of course, we simply rehash the same provided-for-our-consumption talking points.

  21. It’s the Simpson-Bowles Personal Profit Tour: Making Money Off the U.S. Debt
    by Leo W Gerard

    The Simpson-Bowles personal profit tour reveals that for them, for their creation – the speciously labeled Campaign to Fix the Debt – and for the CEOs, right-wing groups and Republicans rallying round them, the effort has nothing to do with deficits or fixing anything. For them, it’s all about personal profit. And if their personal gain costs the vast middle class any sense of retirement security after a lifetime of paying into these earned benefit programs, well Simpson-Bowles & Co. are just fine with that.

    The nation’s debt is a good deal for Alan Simpson and Erskine Bowles, the leaders of the failed deficit commission. The two are profiting personally by urging fat cats and CEOs to support their two-year-old, already-interred deficit reduction plan.

    Simpson, a former Republican Senator, and Bowles, a Morgan Stanley director, charge $40,000 a pop to promote their rejected scheme to fix the debt by slashing Social Security, Medicare and other programs for the middle class. That means every time they speak, Simpson and Bowles each pocket more than 2.5 times the $15,000 that a typical senior citizen gets from Social Security in an entire year.

    The Simpson-Bowles personal profit tour reveals that for them, for their creation – the speciously labeled Campaign to Fix the Debt – and for the CEOs, right-wing groups and Republicans rallying round them, the effort has nothing to do with deficits or fixing anything. For them, it’s all about personal profit. And if their personal gain costs the vast middle class any sense of retirement security after a lifetime of paying into these earned benefit programs, well Simpson-Bowles & Co. are just fine with that.

    Simpson is the avatar for those wailing, “fix the debt,” while demanding special deals for themselves. In 1996 as a Senator needing support from senior citizens, Simpson offered an amendment noting that 60 percent of them depended on Social Security for at least half of their income. It specified:

    “Social Security beneficiaries throughout the nation deserve to be reassured that their benefits will not be subject to cuts and their Social Security payroll taxes will not be increased as a result of legislation to implement a balanced budget amendment.”
    Now, when he’s a shill bagging $40,000 a speech from business groups and CEOs, he calls Social Security recipients “greedy geezers,” and scorns the program cherished by the middle class, calling it:
    “a milk cow with 310 million tits.”

  22. Reblogged this on Jerry Welch and commented:
    Interesting and Informative commentary on how the wealthiest Americans are pushing for even more corporate welfare while passing on the cost to those who need help the most.

  23. CHART: Corporate Profits Skyrocket While Corporate Taxes Plummet
    By Pat Garofalo on Dec 10, 2012

    Corporate profits are currently at an all-time high (while worker wages as a percentage of the economy have plummeted to record lows). But despite those sky-high profits, corporate income tax revenue is projected to be just 1.5 percent of GDP this year, below the recent average and far below the amount raised by the tax just a few decades ago.


    Check out the graph at the link I posted above.

  24. The Pirates Behind The Campaign To Fix The Debt
    By Charles P. Pierce

    There are many more important topics out there than The Deficit, the scary, hairy monster that haunts the dreams of David Gregory and only the blood of the poor and elderly can appease its wrath. Climate change comes immediately to mind, as do income inequality, the vast inequities of our tax code, the ongoing upward translation of the nation’s wealth, why more bankers aren’t in federal prison, and whatever did I do to the baby Jeebus that he allowed Notre Dame to play for a national championship. But the biggest reason why we should shut the national piehole on the topic is not that we have more serious problems, or even that any discussion violates the blog’s first rule of economics — Fk The Deficit. People Got No Jobs. People Got No Money. The real reason we should stop talking about it for a while is that the people who are insisting that it will eat us and our posterity on toast are lying swine who would sell your white-haired granny to the Somali pirates for another three points on the Dow. Until we all acknowledge the fact that organized wealth in this country has become downright sociopathic in the heedless damage it does, any discussion of The Deficit can and will be hijacked by that quarter in order to gain absolution for its grievous sins and the right to go on committing them against the rest of us, over and over again.

    Listening to these people talk about the national economy is like listening to a burglar tell you that you should really polish the silver more often.

    The latest confirmation of this obvious truth comes from the good folks at the Institute Of Policy Studies, who took a look at the various plutocrats and pirates who are behind Fix The Debt, the latest scam from the phony deficit scolds, albeit one made up almost exclusively of people who helped throw the national economy into the abyss for a decade, and then came looking for government handouts when it all went to hell. In a sensible world, the whole notion of taking seriously the economic proposals emanating from this particular bag of rancid marsupials would occasion an immediate takeout order from Wanda’s House Of Tar And Feathers. Instead, we have the people at IPS, to whom none of our courtier press will pay attention, but who have done us the invaluable service of showing us in detail how the folks behind Fix The Debt do business in their day jobs. These are the people, of course, who are so concerned about The Deficit because of the impact it will gave on their children and grandchildren, most of whom, of course, will not have to work a day in their lives, because Grampy stole the country back in the day. The report is a truly remarkable look at who’s really running things.

  25. CEO’s Who Can’t Manage Their Companies’ Retirement Plans Want to “Fix” Social Security
    —By Stephanie Mencimer
    Tue Nov. 27, 2012

    Corporate chief executives who get involved in politics often invoke their business bona fides as a superior guide to fixing the nation’s problems. The CEO’s behind the latest “Fix the Debt” campaign are no exception. The top dogs at more than 90 American corporations—ranging from Honeywell’s David Cote to Loews’ James Tisch— have signed on to the coalition to press Congress to rein in federal spending, particularly on entitlements, and to balance the nation’s books. The anti-debt coalition would like to see big cuts in Social Security benefits and an increase in the retirement age as a “fix” for the program.

    Of course, American political leaders should always take the advice of rich businessmen with a grain of salt (and here they are almost uniformly men), especially when the remedy also includes big corporate tax cuts, as the “Fix the Debt” coalition is advocating for. But also, in this case, it’s fairly clear that there’s nothing about being a CEO that makes one especially well-equipped to dictate massive changes to the nation’s collective retirement plan. Indeed, the CEO’s behind the “Fix the Debt” coalition come from companies with rather dismal records of managing their own retirement plans.

  26. There is another term for this kind of behavior. It is called theft. Or stealing, if you prefer:

    Hostess Brands acknowledged for the first time in a news report Monday that the company diverted workers’ pension money for other company uses.

    The bankrupt baker told The Wall Street Journal that money taken out of workers’ paychecks, intended for their retirement funds, was used for company operations instead. Hostess, which was under different management at the time the diversions began in August 2011, said it does not know how much money it took.

    Jail would be too good for these executives and managers.


  27. Social security’s most media-friendly foe
    Maya MacGuineas hides behind a “nonpartisan” label while trying to get Social Security on the “fiscal cliff” table
    By David Sirota

    For those familiar with Ayn Rand’s writing, the question “Who is John Galt?” is succinct shorthand to summarize conservatives’ ideological campaign against government. But to really appreciate how that crusade operates on a day-to-day basis in the most important political battles of the moment, the best question right now is, “Who is Maya MacGuineas?”

    The incurious political press’ answer to that query can be seen in a quick Google News search of her name. As you will see, she is one of the most oft-quoted, and therefore influential, “experts” in the so-called “fiscal cliff” negotiations. Most often, she is simply described by Washington reporters as the president of the “nonpartisan” Committee for a Responsible Federal Budget and, in that role, as the lead coordinator of the so-called “Fix the Debt” coalition.

    Though words like “nonpartisan” are designed to cast both groups, and MacGuineas herself, as apolitical and ideologically dispassionate, the boards of both organizations (which you can see here and here) are teeming with business executives and lawmakers-turned-corporate lobbyists. That is, they are teeming with precisely the kind of hyperpartisan, ideologically driven Big Money interests that have a financial stake in balancing the budget in a way that at once prevents tax increases on the rich and cuts or privatizes social programs.

    That latter goal is particularly important to these folks because they rightly see a privatized Social Security as a profit machine for the financial industry. That’s almost certainly why, as CNN reports, Wall Street–coddling Republicans are “insisting that Social Security reforms be part of” the “fiscal cliff” negotiations. This, despite the indisputable facts (acknowledged even by Ronald Reagan) that Social Security has almost nothing to do with the national deficit or debt.

    That’s where MacGuineas comes in. With burn-the-village-to-save-it talking points, she and her paymasters are pretending that they want Social Security to be part of the “fiscal cliff” negotiations in order to strengthen the program for the long haul. But a look at MacGuineas’ long record shows a wily operative primarily devoted to one goal: severely cutting benefits.

    Back in 2005, as President Bush was championing a plan to reduce benefits and turn Social Security into Wall Street–managed private accounts, MacGuineas and an operative at the right-wing American Enterprise Institute jointly published a National Review article advocating for that very idea.

    Likewise, in 2011, MacGuineas published a CNN Money op-ed explicitly calling for “benefit reduction(s)” and slamming President Obama for “not accept(ing) an approach that slashes benefits for future generations.” Not surprisingly, she didn’t bother to mention that the minimal revenue challenges within Social Security could be most easily solved by simply lifting the income cap on payroll taxes. She didn’t mention it, of course, because while such a proposal is popular among most Americans, it is quite unpopular among the rich folk who pay her salary.

    But perhaps the most illustrative evidence of MacGuineas’ true motives can be found in the 2008 Heritage Foundation paper she co-authored with Stuart Butler, a top official of that archconservative organization. Here’s the crux (emphasis added):

    “As quickly as possible, we should phase in a means test for premiums and benefits for Medicare and Social Security. The sooner the scaling back of unnecessary benefits is phased in, the less other programs will have to be cut. We support including current and near-retirees in this change …

    “We also support speeding up the increase in, and further increasing, the retirement age. Under current law, the normal retirement age is scheduled to rise from 66 to 67 between 2017 and 2022. This increase in the retirement age should be accelerated, increased further, and indexed to longevity … to reflect the growing life expectancy of the population. This change would generate savings both by allowing individuals more years to accumulate personal savings and by allowing for fewer years of collecting benefits …”

  28. The Budget Thugs: What Do They Know About the Economy?
    By Dean Baker
    Posted: 12/11/2012

    Ed Haislmaier, a senior scholar at the Heritage Foundation, made himself famous in this video where he appears to be assaulting people protesting a conference organized by Fix the Debt. While this act of bad temper may be uncharacteristic of the public behavior of this corporate-sponsored crusade to cut Social Security and Medicare, it does reflect the way in which they hope to bully their agenda through the political process.

    The line from Fix the Debt, an organization that includes the CEOs of many of the country’s largest corporations, and allies like the Washington Post is that we better have cuts to Social Security and Medicare because they say so. Note that they did not try to push this line in the elections. Everyone knows that cuts to these programs are hugely unpopular across the political spectrum.

    The Fix the Debt strategy was explicitly to wait until after the election. They would then go into high gear pushing their agenda of cutting Social Security and Medicare regardless of who won the elections. Remember, we need these cuts because they say so.

    It is worth repeating the “they say so” part because this is the only way we could know that cuts to Social Security and Medicare are necessary. It is possible to tell stories about countries where a meltdown in financial markets forced sharp budget cuts, but there is zero evidence of that for the United States. Investors are willing to lend the U.S. government vast amounts of money at extremely low-interest rates. The only reason that we have for believing that financial markets will panic if we don’t have the Social Security and Medicare cuts the Debt Fixers want is because they say so.

    For this reason it is worth considering what the Debt Fixers know or don’t know about the economy. This meaning bringing up a still fresh wound: Why did none of these people see the housing bubble whose collapse wrecked the economy?

    It is important to understand the bubble was not hard to see. Nor did it require much knowledge of economics to realize that its collapse would devastate the economy.

  29. Commentary – What’s behind the CEOs’ campaign?
    By Scott Klinger

    While America’s CEOs are fretting about the government’s so-called “fiscal cliff,” millions of American workers face a financial disaster that gets much less media attention. There’s a half-trillion-dollar deficit in the nation’s worker retirement benefits.

    The Great Recession, which decimated retirement assets, played a big role in building this lesser-known cliff. But many corporations could have avoided the problem by shoring up these funds during the boom years. Instead, they siphoned off pension assets for other profit-boosting purposes. When the pension deficits started to balloon, many corporations responded by slashing back their benefit programs.

    As a result, Americans today are more reliant on government-funded Social Security and Medicare programs than at any other time in the last 60 years.

    What’s even more outrageous is that the very same CEOs who have contributed to rampant retirement insecurity are now calling for cuts to these earned-benefit programs for senior citizens.

    Nearly 100 CEOs have banded together to convince the American public that Social Security and Medicare lie at the root of America’s fiscal challenges. Their “Fix the Debt” campaign features plain-spoken Americans in their ads and sounds moderate because they call for both spending cuts and revenue increases.

    But the real objectives of the campaign include massive new corporate tax cuts and reduced spending on Social Security and Medicare, which would likely involve raising the retirement age.

    American workers, at present, cannot collect Social Security and Medicare until age 66, the highest retirement age among rich countries. In 2020, the Social Security retirement age will rise to 67, assuring that American workers will be toiling longer than any other industrialized country for years to come. In contrast, Japanese and Chinese workers can collect their equivalent of Social Security starting at age 60.

    The Fix the Debt campaign’s CEO supporters need not worry about Social Security because they’re members of the “I’ve Got Mine Club.” Fifty-four of the CEOs leading Fix the Debt directly benefit from lavish executive retirement programs. Their collective pension assets total $649 million, which comes to more than $12 million per CEO. That’s enough to garner a $65,000 retirement check each month starting at age 65 that will continue for as long as they live, according to a new report by the Institute for Policy Studies, which I co-authored. In contrast, the average retiree receives just $1,237 from Social Security each month.

    Yet, the firms headed by Fix the Debt CEOs owe their U.S. pension funds more than $100 billion, according to the IPS study. U.S. law requires corporations to keep their pension debts to manageable levels, but this pressure has often resulted in benefit cuts.

    General Electric, which has a staggering $22 billion pension deficit, shut down its pension fund last year, saying it had become a “drag on earnings” (at a whopping cost of 13 cents per share, according to their estimates). Like many other firms, GE has shifted new employees to a less costly 401(k) plan, putting the risk for poor stock market performance onto employees.

    Beware of wealthy CEOs who are lecturing the rest of us about tightening our belts.

    American workers would be far better off if CEOs worried more about fixing their own companies’ pension debts.

  30. The making of a meme
    Journos get on board the Let’s-Whack-Entitlements train
    By Trudy Lieberman

    Shortly after the election, the MSM quickly turned from the presidential horse race to the “fiscal cliff.” And soon, news outlets began passing along what has become conventional political wisdom in the Beltway—that something must be done about the deficit, and fast, and that cutting entitlements, namely Social Security and Medicare, must be part of any deficit-reduction package. Hardly a day goes by when someone paying attention would not hear this meme repeated in the press. What they usually don’t hear enough of, though, is how contemplated cuts might affect ordinary people and what the alternatives might be.

    The NewsHour weighed in two days after the election with an interview featuring Mark Bertolini, Aetna’s CEO, who told Judy Woodruff that going off the fiscal cliff would result in negative GDP the first quarter. After some talk about how Aetna is “gating” its investments and “pulling back on employment” as a result of fiscal-cliff uncertainty, Bertolini said, “No matter how you do the arithmetic, we have to raise revenue and we have to deal with entitlement programs.” There were no other guests on this show, so Bertolini pretty much had his say, with viewers getting the impression fixing the deficit and cutting entitlements were urgent.

    Bertolini is one of the early organizers of the Campaign to Fix the Debt, a group set up by Alan Simpson, the former Wyoming senator, and Erskine Bowles, the former Clinton chief of staff, who together headed the president’s deficit commission and authored the Simpson-Bowles report—policy prescriptions for cutting the deficit and entitlements. CEOs have been making the media rounds, delivering their urgent message, as Goldman Sachs CEO Lloyd Blankfein did when he told CBS that people have to lower their expectations about entitlements, because “they’re not going to get them.” No pushback followed from the CBS anchor, Scott Pelley.

    Meanwhile The Washington Post, which has helped shape elite media coverage on the deficit and entitlements, continued a vein of reporting that at times seems to blur the distinction between news and op-eds. The Post’s Lori Montgomery and her colleague Zachary Goldfarb gave a sense of urgency to fixing the deficit writing: “With another dangerous deadline for the economy approaching, Tuesday’s election returned to power the same men who have battled for two years over the nation’s budget problems.” That was a straightforward piece, but a few days later, Montgomery lionized Simpson and Bowles, who two years ago, she wrote, “rolled out a startling plan to dig the nation out of debt.” Even though lawmakers recoiled from the blunt prescriptions, she continued, “their plan as been heralded by both parties as a model of clear-eyed sacrifice, and policy makers say the moment has come to live up to its promise.” The press often refers to the Simpson-Bowles plan as a blueprint or a starting point for fixing the deficit and entitlements, as do many of the sources they choose to consult. Bertolini, for example, told Woodruff that “the Simpson-Bowles framework is perfect to build off of.”

    Speaking of sourcing, Politico weighed in this week with a meme-building “Behind the Curtain” column. Jim VandeHei and Mike Allen reported on the “clear takeaway” they said they heard in private and other conversations about what the economy needs, with “top lawmakers, officials, their senior aides and the CEOs who advise and lobby all of them.”

    This is a group, it should be noticed, particularly quick to agree with policies that devolve to its own self-interest. And as Jonathan Chait notes in a withering piece in New York magazine’s Daily Intel section,

    “Even more remarkable is the approach Politico’s editors take toward the consensus. They have on their hands the most ripe material for a scathing exposé of a chummy, self-interested business-political elite. VandeHei and Allen, by contrast, understand their role here not as exposing the insider nexus but as uncritically transmitting its point of view.”

    And for entitlements, that point of view is: shrink ‘em.

    Kennth Griffin, the founder of a $3 billion hedge fund, tells VandeHei and Allen that “the critical problem is entitlement reform.” He doesn’t mention income inequality, oddly. The reporters go on to write:

    “Nearly every lawmaker and staffer will tell you privately that they know the Social Security retirement age needs to go up, the rate of growth of benefits needs to be slowed on a sliding scale that protects the poor, the cap on income subjected to the tax that finances the program needs to rise and the rich should get smaller or no payout from the program.”

    The meme continues to roll through the media. When Simpson gave a speech in New York to a group called The Common Good, CNNMoney gave a rundown of what he said, beckoning readers with this alarmist headline “Alan Simpson paints dire market outlook.”

    Sometimes the meme takes the form of getting the pols on board with need for a quick fix. An editorial in USA Today challenged the Democrats to be brave and cut entitlements. “How exactly do Democrats expect Republicans to bend on their destructive refusal to raise taxes if Democrats won’t bend on their destructive refusal to trim unsustainable benefit programs,” the editorial argued. Even the reliably moderate Eleanor Clift seemed to be on board, writing in The Daily Beast that the president faces a daunting challenge “to convince liberal groups that they too will have to yield.”

  31. Dart: CBS and the Goldman Sachs solution
    Another weak showing on Social Security
    By Trudy Lieberman

    Maybe CBS Evening News anchor Scott Pelley was so awestruck by a chance to visit one of the seven trading floors over at Goldman Sachs, and by a rare interview opportunity with Goldman’s CEO, that he forgot about good, skeptical follow-up questions. He and the CBS Evening News get a CJR Dart for this fairly embarrassing effort.

    Pelley reported: The “so-called fiscal cliff is a time bomb, according to Lloyd Blankfein, chairman and CEO of Goldman Sachs, and one of the world’s most influential bankers. His message to Washington: Make a deal.” In other words, reduce the federal budget deficit.

    OK. How would Blankfein do that?

    “You’re going to have to undoubtedly do something to lower people’s expectations—the entitlements and what people think they’re going to get, because it’s not going to—they’re not going to get it.”

    Wow! That’s direct. The next logical question was, well, why?

    But all Pelley managed to ask at that point was “Social Security, Medicare, Medicaid?” as if reaffirming that all three programs are on the chopping block in the mind of one of the world’s most influential bankers. They were. Blankfein elaborated:

    “You can look at history of these things, and Social Security wasn’t devised to be a system that supported you for a 30-year retirement after a 25-year career…So there will be things that, you know, the retirement age has to be changed; maybe some of the benefits have to be affected; maybe some of the inflation adjustments have to be revised. But in general entitlements have to be slowed down and contained.”

    “Because we can’t afford them going forward?” Pelley volunteered, which prompted Blankfein to respond: “Because we can’t afford them.”

    By now we’ve become used to weak reporting on Social Security from CBS, having critiqued its omissions, missing explanations, lack of context in three recent posts (see Related Stories below). So we weren’t too surprised.

    Still, it did seem reasonable for CBS to push back a little on Blankfein’s arguments about how much Social Security we can afford. One approach would have been to report on how much of our GDP is spent on the program—a comparison sometimes employed in healthcare coverage, but for some reason almost never in press accounts about Social Security, the country’s largest and most popular entitlement. As we pointed out a few weeks ago, the US spends 5 percent of GDP on Social Security. By comparison: In 2000, Germany spent nearly 12 percent of its GDP on old age, survivor, and disability benefits. Germany seems economically healthy, too.

    Instead, Pelley used up airtime with a few more superlatives about Goldman, which he called “one of America’s most successful investment banks,” with “ net earnings of $4.4 billion dollars last year.”

    Another approach would have been to add a little economic history and context. The US is a far richer country than it was in 1935 when President Roosevelt signed the Social Security Act, and richer than it was in 1965, when Congress created Medicare. “It’s hard to figure out how we could afford to take care of our old people in 1937(sic) and 1965 when our country was one-quarter or one-half as wealthy as it is today, but can’t afford to do so today,” noted Jim Naureckas on the blog of FAIR, the liberal media advocacy group. The question is a good one.

    Blankfein’s assertion that Social Security was being used to support Americans after a 25-year career also needed an X-ray. Social Security’s retirement benefits are based on a worker’s career average wages from at least 40 years of work. In calculating the average, the five lowest years of earnings are disregarded, but wages from the remaining 35 years are counted—even in years when the worker earned no money. In that case, a zero is used in calculating the average.

    So what is Blankfein talking about here? Twenty-five years after you enter the workforce at, say, 22, puts you at 47. Who gets Social Security retirement benefits at 47? Nobody.

  32. Things In Politico That Make Me Want To Guzzle Antifreeze, Point Of No Return Edition
    By Charles P. Pierce

    One of my primary criticisms of Tiger Beat On The Potomac has been that the entire enterprise has been dedicated totally to gossip, triviality, and Drudge-baiting to the exclusion of what’s actually going on in the country to the people these politics are supposed to serve. Alas, today, the two presiding intellects of the publication put their watery heads together to discuss “bold” policy choices. I hereby take back everything I wrote in the former vein. If this is their idea of discussing policy, I wish to the god that gave me breath that they’d go back to who’s zooming whom at some lobbying shop.

    In short, Messrs. VandeHei and Allen have decided that the way to a “rocket-propelled” economy is to cut corporate tax rates to almost nothing, close a bunch of loopholes that will reopen under new rubric in approximately 11 seconds, and essentially do away with the American middle class, or at least impoverish its dwindling membership to the point at which nobody can afford to buy anything anyway.

    “The current tax-and-spending debate only flirts with what these insiders say needs to be done. Instead, top White House and congressional leaders talk privately of the need for tax reform that goes way beyond individuals and rates; much deeper Social Security and Medicare changes than currently envisioned; quick movement on trade agreements, including a proposed one with Europe; an energy policy that exploits the oil and gas boom; and allowing foreign-born students with science expertise to stay here and start businesses.”

    And to whom do these two brainiacs turn to for these bold policy ideas?

    “This is the clear takeaway from conversations we have had over the past three months with top lawmakers, officials, their senior aides and the CEOs who advise and lobby all of them. Many of the conversations were private but many were not.”

    Of course, it’s your “clear takeaway,” you twits. You might as well troll meth labs to learn table manners. Ask dogs for recreational tips and they’ll tell you to lick your balls. Ask monkeys about hobbies, and they’ll teach you to fling poo. Ask the plutocrats, and the politicians who serve them, and the aides who serve them about what we should do about the economy, and the answer is always going to be “make sure we stay rich.”

  33. The Continuing Uselessless of the Deficit Hawk Campaigners
    By David Weigel
    Wednesday, Dec. 12, 2012

    Mike Bloomberg joins the Fix the Debt coalition with a Washington Post editorial. Seems like overkill, given how he has a perfectly nice media organization through which he can broadcast opinions, but at least it gives us a fresh view of the nothingness that defines the debt campaign. “There have been signs that Congress and the White House are beginning to move toward an agreement that would include modest tax increases and spending cuts, as well as a commitment to enact broader-based tax and entitlement reforms in 2013,” he writes. “While the tax revenue and entitlement cuts being discussed are both less than what I and many others believe are necessary to maximize long-term growth, the specifics of the deal are to some extent less important than the act of getting one.” That’s not any kind of advice!

    And this is joined by a statement from the group.

    “The Campaign to Fix the Debt is delighted to have Mayor Bloomberg join as a National Co-Chair. His breadth of experience and pragmatic vision will provide an invaluable resource to the Campaign,” said Maya MacGuineas, president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt. “Mayor Bloomberg has been a longtime advocate of fiscal responsibility, and his voice will send a strong message to Washington that we have to rein in spending, raise revenue, and reform entitlements in order to get the national debt under control.”

    To do what? One thing a billionaire with political power might do is speak out on the sort of tax dodging revealed in this Bloomberg.com story. Or, I guess, he could spoon out more mush.


    Millionaires Seek Trust Shelter as Bush Tax Cuts May End
    By Sophia Pearson & Ellen Rosen
    Dec 12, 2012

  34. The “Yes, Minister” Theory of the Medicare Age
    By Paul Krugman

    Aaron Carroll can’t believe that we’re still talking about raising the age for Medicare eligibility; his disbelief is easy to understand. It is, after all, a truly terrible idea, for reasons he details in the linked post; it would inflict vast hardship on the most vulnerable, while saving the federal government remarkably little money, and would actually raise overall health spending, basically because private insurers have much higher administrative costs and much less bargaining power than Medicare, so shifting seniors out of the program ends up costing a lot of money.

    Yet the idea just won’t go away. It’s almost surreal. What’s going on here?

    One answer is that conservatives badly want a rise in the Medicare age, never mind the policy virtues or lack thereof. Why? Partly because liberals hate the idea: pay any attention to right-wing rhetoric and you learn that spite against liberals, even if there’s no gain for their side, is a major motivator. Beyond that, there is some actual strategic thinking here: by reducing the number of people receiving Medicare, they hope to undermine support for the whole program. No, really:

    The most important likely effect is political. Reforming Medicare is difficult in part because of resistance by beneficiaries, who hold a lot of political influence … Diminishing the size of the beneficiary class is likely to diminish resistance to further change, and while it’s not enough, it might ultimately make reform easier.

    “Reform”, in this case, means killing the program.

    But that’s the right. What about centrists and deficit scolds; why are they for this?

    One answer is that many “centrists” are actually right-wingers, at least in the sense that they are basically hostile to the welfare state and view shrinking it as a key goal; the same is true of most deficit scolds, who seem far more interested in cutting social spending than in shrinking the deficit per se.

    But there is, I believe, another factor: raising the Medicare age sounds serious, even though it isn’t, and it’s something you can do, then congratulate yourself on your seriousness.

    When I look at this whole discussion I keep thinking of a line from “Yes, Minister”: “We must do something. This is something. Therefore we must do it.”

    And there’s a real possibility that this kind of logic will lead to huge suffering for hundreds of thousands of older Americans.

  35. Emerging Fiscal Cliff Deal Spares Corporations, but Not the Safety Net
    George Zornick
    December 12, 2012

    The Wall Street Journal has news of some actual developments in the ongoing fiscal cliff negotiations: this morning, it reported that President Obama will add corporate tax reform to his offer to House Republicans, in an effort to bring them along and invite a buy-in from the pesky CEOs crowding up the airwaves during most of this saga.

    The Journal says “The White House’s corporate-tax suggestion wasn’t specific” but that “White House officials, in making the suggestion, cited a corporate-tax plan the administration unveiled in February.” The plan the White House outlined earlier this year, if you don’t recall, was to lower the corporate tax rate from 35 percent to 28 percent while closing corporate tax loopholes to a degree that enough revenue is raised to offset the rate reduction.

    So you can immediately see the first problem with Obama’s proposal—since it’s revenue-neutral, it asks corporate America to contribute nothing to a final deficit reduction passage.

    Citizens for Tax Justice immediately flagged Obama’s revenue-neutral plan as problematic when the White House released it earlier this year. CEOs like to whine that the statutory corporate tax rate in America of 35 percent is the highest in the world, but CTJ studied the Fortune 500 companies that had profits in each of the past three years and found that their average effective tax rate was actually just 18.5 percent, thanks to a variety of loopholes, exemptions, and offshoring. Thirty of those corporations had negative tax rates, meaning they actually got money from the Treasury over that three-year period.

    CTJ thus concluded “The first goal of corporate tax reform should be to increase the overall amount of tax revenue collected from U.S. corporations.” But Obama’s plan doesn’t do that.

    Worse, his plan would quite likely give the corporations an even lower final tax bill once it’s implemented—or rather, not implemented. Obama’s corporate tax plan suffers from the same problems as Romney’s income tax plan: it lowers rates, which is immediate and likely permanent, but doesn’t actually specify enough loopholes to make up the revenue. CTJ studied Obama’s February proposal and found that is specified only about a fourth of the loopholes that needed to be closed in order to offset the rate reductions and “only gives vague suggestions” about where the other 75 percent of the revenue would come from

    It’s quite likely that corporate America and its allies in Congress would fight mightily and successfully to preserve their special tax benefits, and this same Journal story notes that when Obama released his earlier corporate tax plan, “Many [business groups] were supportive of the proposal to lower rates but worried about which industries might get hurt by an accompanying elimination of tax breaks.”

    Note also that Obama’s corporate tax plan proposes some sort of “territorial tax system” in which corporations could bring profits earned overseas back home at some rate lower than the current law requires, which is 35 percent. This is something the CEOs now lobbying Washington on the fiscal cliff badly want—as we outlined earlier this month, it will reap them tens of millions in benefits. Obama’s plan, CTJ notes, says corporations won’t be able to bring the profits back at a zero percent rate—though no country allows that—but notably does not specify what the rate should be. Given that Republicans have been pushing for an essentially insignificant 1.25 percent rate on repatriated profits, Obama’s lack of specificity is troubling.

  36. JPMorgan CEO Pushes Fiscal Cliff Compromise As The Bank Lobbies For Tax Breaks
    The Huffington Post
    By Catherine New
    Posted: 12/13/2012

    Jamie Dimon, JPMorgan Chase’s chief executive, has been out front among Wall Street chiefs in supporting higher tax rates on individual taxpayers as a way to avert the fiscal cliff.

    In fact, Dimon has even said that he’d be willing to pay higher taxes on his own income, which was around $23 million last year alone. Add to that, the CEO is a member of Fix the Debt, a nonprofit group with the mission to promote ways to reduce the national debt.

    Yet JPMorgan, the biggest bank in the country by assets, appears to be unwilling to sacrifice its own tax benefits to help bring down the national debt. Instead, it has spent millions this year alone lobbying Congress to extend a key loophole that allows the bank to avoid paying a tax bill on its foreign income.

    The corporate tax break is known as the “active finance exception,” and it allows multinational companies to earn interest on overseas lending and defer paying taxes to the U.S. government indefinitely.

    When contacted by The Huffington Post, the bank did not comment directly on whether it is currently lobbying for this tax break. “We paid over $8 billion in taxes last year and operate as efficiently as we can for shareholders,” said Mark Kornblau, a spokesman for the bank.

    As recently as five months ago, JPMorgan Chase was funding lobbyists to push Congress to extend this key tax loophole. According to lobbying reports on OpenSecrets.org, JPMorgan Chase paid more than $3 million between April 1 and June 30 alone to lobbyists to specifically discuss “proposals to extend the active finance exception.”

    Last month, Morgan Stanley CEO James Gorman also came out in support of a “balanced solution” to the fiscal cliff, including support of tax hikes on individual taxpayers, even as his bank has also lobbied to extend the same tax break, HuffPost’s Ben Hallman reported.

  37. Executives Pushing Budget Cuts Rake In Millions From Tax Loophole
    By Bryce Covert
    May 2, 2013

    Fix the Debt, a group of CEOs at some of the country’s largest corporations, has been pushing an anti-debt agenda with stern warnings about the urgent need for deficit reduction. But many of its members have benefitted from a loophole in the tax code that has allowed them to deduct “performance pay” from their executive salaries and thus avoid paying millions in taxes.

    A new report from the Institute for Policy Studies and Campaign for America’s Future finds that 90 member firms took in somewhere between $953 million and $1.6 billion through the ability to deduct performance pay from corporate taxes between 2009 and 2011. The report includes the biggest winners of this loophole:

    – UnitedHealth Group: This company was at the top of the list, deducting at least $194 million of its total $199 million compensation for CEO Stephen Hemsley during that time period. The report calculates that this works out to a $68 million taxpayer subsidy to UnitedHealth, plus another $10 million tax break for Hemsley’s $28 million performance pay in 2012.

    – Discovery Communications: This company came in second, deducting $105 million of a total compensation package of $114 million for CEO David Zaslav from 2009 to 2011. That comes to a $37 million taxpayer subsidy. It got another $9 million tax break for his performance pay in 2012.

    – Caesars Entertainment: Even though this company has been losing money in recent years, CEO Gary Loveman made $9.6 million in cash bonuses during that time.

    During that three-year period, CEOs and the next three top executives at each of the 90 Fix the Debt corporations were paid a total of $6.3 billion, 75 percent of which was in fully deductible performance pay, equaling $2.7 billion. Depending on how everything was calculated (which is hard to know with current disclosure rules), that comes to about $1.5 million in taxpayer subsidy per executive or $18 million per company.

    The group has previously pushed for tax reform that would result in even bigger windfalls for the corporations they represent, potentially netting them $134 billion. Members have also been vocal in calling for cuts to Social Security while themselves enjoying millions of dollars saved in their personal retirement accounts.

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