"Grand Bargain" Means Cuts to Social Security and Medicare
Fix the Debt’s Last Harrumph
The Campaign to Fix the Debt
– billionaire Pete Peterson
’s Wall Street-backed austerity front group – is scaling down and shedding staff after failing to achieve any of their toxic goals.
Their fake youth group, “The Can Kicks Back,” is in debt and about to kick the bucket. They are packing up their phony “can man” and their Mercedes BMW tour mobile (bizarrely called the AmeriVAN) and putting Simpson-Bowles in mothballs. Read our piece on how astroturf got mowed by real people.
Since our February 2013 front page expose on this “astroturf supergroup” in the Nation, you helped us spread the word and call out the tax dodging hypocrites with platinum plated pensions pushing harmful budget cuts. Fix the Debt failed because Americans aren’t interested in cutting Social Security or Medicare to offset more tax handouts to big corporations.
Now we learn that President Obama has struck “chained CPI” Social Security cuts from his budget proposal. It is time to take advantage of this important victory to pivot to a discussion on how to improve and strengthen these lifesaving programs to preserve them for future generations.
Help us continue to be an independent voice in the budget battles.
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Dear WWII Vets, Forget About the Monument, They Are Gunning for Your Social Security!
Iowa veterans at WWII memorial
(Photo by Leo Shane III. Used with permission.
© 2013 Stars and Stripes.)
Apparently the only thing both Democrats and Republicans can agree on in Washington, D.C. is that they can't deal with bad press involving Honor Flight vets.
This led to absurd images of Republicans -- who had shut down the federal government, including all monuments and museums -- rushing to "aid" veterans shut out by monument closures. In the most revolting display, Rep. Randy Neugebauer (R-CA) publicly berated a National Park Service Ranger for a situation created entirely by Congress.
As the government shutdown marches on and the dangerously real deadline of the federal debt limit approaches, it is increasingly clear that the fight over "Obamacare" is merely an opening salvo. The real goal of the hostage takers is a "Grand Bargain" on the budget that would include cuts to Social Security and Medicare.
This has been the long-term agenda for debt crisis-monger Pete Peterson and government haters David and Charles Koch for many decades. But now, after massively gerrymandering the electoral landscape in 2010, these manufactured crisis kings and backstage billionaires hold all the cards.
Rev up those engines. It's time for the Honor Vets to head back to Washington to save us all.
Read the full article on PRWatch here.
New Heights of Hypocrisy in Latest "Fix the Debt" Ad
Today, the group launched a six figure TV ad buy that reaches new heights of hypocrisy -- and that is saying a lot.
Former U.S. Senator Alan Simpson and Morgan Stanley board member Erskine Bowles have long been spokespersons for Fix the Debt. The "folksy" Simpson: "For cryin' out loud, Erskine, who isn't fed up with what's goin' on in Washington?" The Bowles tsk tsk: “These politicians are playing games jerking our country around from crisis to crisis.”
This is rich from a group that has been hyping a debt and deficit crisis since its launch in July 2012, even though the deficit has been cut in half in recent years. In January 2013 Fix the Debt steering committee member and former Tennessee Governor Phil Bredesen admitted that Fix the Debt's strategy was to create an "artificial crisis" to achieve a "grand bargain" on Medicare and Social Security.
Moreover, Fix the Debt was started with a $5 million donation from crisis king Pete Peterson. Peterson has been warning that our Social Security would create a “Pearl Harbor” type crisis for decades as my colleague Lisa Graves documented in her Nation piece “Long History of Deficit Scaremongering.”
Read the full article on PRWatch here.
Wall Street Billionaire Pete Peterson
Pete Peterson at National Press Club July 17, 2012 (Source: Lingjing Bao, Talk Radio News)
Move over, David Koch and George Soros! Pete Peterson is "the most influential billionaire in America," says the LA Times.
Peter G. Peterson has long used his wealth to underwrite numerous organizations and PR campaigns to generate public support for slashing Social Security and Medicare, citing concerns over "unsustainable" federal budget deficits. Full of apocalyptic warnings, Peterson failed to warn of the $8 trillion housing bubble, but conveniently sold his private equity firm Blackstone Group on the eve of the financial crisis. He later pledged to spend $1 billion of the money from the sale to "fix America's key fiscal-sustainability problems," launching the Peter G. Peterson Foundation in 2008. As of 2011, the Huffington Post reported that Peterson had personally given $458 million to the Foundation.
Peterson told the Washington Post that he gave Fix the Debt $5 million in funding; Fix the Debt was announced on the Peterson Foundation website and Peterson appeared at the Fix the Debt launch in July 2012. Peterson also funds Fix the Debt parent organization Committee for a Responsible Federal Budget at the New America Foundation. Even before the 2012 Campaign to Fix the Debt, Peterson poured millions into a multifaceted effort to support the Simpson-Bowles Commission and its $4 trillion austerity package, a plan that would cost the nation four million jobs, according to the Economic Policy Institute, and "destroy Social Security as we know it," according to Social Security Works. He bankrolled nineteen "America Speaks" Town Hall meetings, which spectacularly backfired, launched the "OweNo" TV ad campaign, and funded the Concord Coalition’s Fiscal Solutions tour to take the message to the heartland. When the commission blew up -- failing to get the votes needed to advance a plan to Congress -- Peterson gave Bowles and Simpson a new perch at the Committee for a Responsible Federal Budget to allow them to continue to scold Congress. Learn more about Pete Peterson in "Peterson's Long History of Deficit Scaremongering" in The Nation.
AFL-CIO Says It Will "Fight to the Death" to Stop Cuts and Will Give "No Cover" to Democrats
- “The labor movement is going to fight to the death to stop cuts to Social Security and Medicare and Medicaid,” AFL-CIO policy director Damon Silvers told Salon Thursday afternoon. “Not ‘unreasonable cuts.’ Not ‘cuts without tax increases.’ Cuts period. We’re against all of them, we will fight them ferociously, and we will give no cover to any Democrat who supports them.”
- Silvers said it would be “simply an invitation to a fratricide in the Democratic Party” for the president to take up a renewed push for “chained CPI,” a proposed change in cost of living calculations that would reduce future Social Security benefits. “It hits the absolute most vulnerable people …” charged Silvers. “It’s a proposal that has no merit at all other than that billionaires like it.”
- He also called out billionaire Pete Peterson, who funds several groups advocating for cuts. “They’ve got the vampire agenda: No matter what happens, no matter how many bullets you fire at it, these guys keep coming back with all their money and demanding that we cut Social Security and Medicare and Medicaid …” said Silvers. “We’re gonna fight that stuff with everything we’ve got, and we’re gonna win, because the public’s with us.”
The deal struck by Congress to avoid a debt default sets up a series of deadlines for a new budget deal and many believe that Social Security and Medicare are in danger. The usually mild mannered Policy Director of the nation's largest union federation sounded the alarm in the strongest terms. Damon Silvers of the AFL-CIO warned Democrats in a Salon interview that "chained CPI" as was proposed in President Obama's budget, would be "fratricide for the Democratic Party." The following is excerpted from a Salon article.
Fix The Debt Hypocrites Want to Exempt Off-Shore Earnings From U.S. Taxation
On June 13, 2013, the Institute for Policy Studies released a new report, Corporate Pirates of the Caribbean: Pro-Austerity CEOs Seek to Widen Tax Haven Loophole
, which shows the billions of dollars Fix the Debt member corporations
would stand to gain if Congress agrees to a "Grand Bargain" on the deficit that includes a “territorial” tax system exempting offshore earnings of U.S. firms from U.S. taxation.
The Fix the Debt campaign is a heavily funded corporate lobby group pushing for cuts to Social Security and Medicare and more corporate tax breaks. One of their main goals is a “territorial” tax system that would permanently exempt U.S. corporations’ foreign earnings from U.S. federal income taxes. Erskine Bowles and Alan Simpson, who serve as Fix the Debt Co-Founders, also made this reform a centerpiece of their recently released deficit reduction proposal. The IPS report provides updated figures based on recently released 2012 tax data. Major findings include:
- Two-thirds of the 93 publicly held corporations involved with Fix the Debt were holding profits in offshore subsidiaries at the end of 2012. The 59 firms that reported the amount of these offshore profits had a combined total of more than $544 billion, up from $473 billion in 2011. The average offshore stash per company rose 15 percent in 2012 to $9.4 billion. Currently, these profits are not subject to U.S. corporate income taxes unless they are brought back to the United States (also known as repatriation).
- If Congress adopts Fix the Debt’s proposed territorial tax system, these 59 companies would stand to win as much as $173 billion in immediate tax windfalls. The biggest potential winner is General Electric, which could reap a tax windfall of as much as $38 billion on its overseas earnings stash of $108 billion.
Pete Peterson Linked Economists Caught in Austerity Error
Kenneth Rogoff and Carmen Reinhart
A team of economists at the Political Economy Research Institute (PERI) at UMass Amherst broke a huge story this week that was promptly picked up by the New York Times, the Washington Post, the Financial Times, and newspapers around the globe. The economists proved that the essential underpinning "of the intellectual edifice of austerity economics," as Paul Krugman put it, is based on sloppy methodology and spreadsheet coding errors.
Three years ago, Harvard economists Carmen Reinhart and Kenneth Rogoff released a study that presented empirical evidence from 44 nations over a 200 year time span to demonstrate that countries with a public debt over 90 percent of GDP (the United States is at about 100 percent, Japan at 200 percent) have average growth rates one percent lower than other nations.
Forty-four countries, 200 years, Harvard -- pretty convincing, huh?
Except it was wrong.
It will come as no surprise that Reinhart and Rogoff have ties to Wall Street billionaire Pete Peterson, a big fan of their work. Peterson has been advocating cuts to Social Security and Medicare for decades in order to prevent a debt crisis he warns will spike interest rates and collapse the economy. (Peterson failed to warn of the actual crisis building on Wall Street during his time at the Blackstone Group.)
Read the whole article from PRWatch here.
Key Findings & Useful Charts
With 127 CEOs able to schedule meetings with President Obama and Congressional leaders, numerous PR firms lending a hand, 80 staff, multiple Peterson funded "partner" groups, and 23 phony state chapters, this incarnation of the Peterson message machine must be taken seriously. Fix the Debt documents say the group is targeting a budget of $60 million for the "first phase,"  but in February 2013 Fix the Debt's spokesperson told CMD the organization had only raised $40 million so far. Fix the Debt engaged in a multi-million dollar paid ad campaign in the run-up to the so-called "fiscal cliff" and now is taking that campaign outside the beltway, which is "increasingly resembling a presidential race with grassroots style organizing and offices in places like New Hampshire and Ohio," writes Fortune magazine. As of February 2013, group was touting it 345,000 members/petition signatures. That sounds impressive until one learns that a number of CEOs, such as the CEO of Caterpillar Inc., wrote to 130,000 employees encouraging them to sign and one recalls that their goal was 10 million.Learn more about the firms and the stunts behind the PR spin in the article "Pete Peterson's Puppet Populists" and the Fix the Debt Partners page.
Undisclosed Conflicts of Interest
Fix the Debt biographies fail to reveal that their core leadership team is riddled with conflicts of interest. Public Accountability Initiative (PAI) points to at least 13 steering committee members with financial ties to firms that lobby on deficit-related matters that are not disclosed in their glossy Fix the Debt bios. These firms lobby to preserve dozens of costly tax breaks (including the “carried interest” tax loophole that made Pete Peterson a rich man) or to hold off new taxes, such as the “Robin Hood Tax,” a proposed financial speculation tax that could raise as much as a $1 trillion over 10 years. Click here to see a chart of these conflicts of interest and tax lobbying records.
Prominent CEOs Fail to Fully Fund Employee Pension Plans
While Fix the Debt’s 127 CEOs call for cuts to Social Security (a program that does not contribute to the deficit since it is has a surplus and is accounted for outside the federal budget), many of the publicly-traded Fix the Debt firms underfund their employee pension plans by some $103 billion making their employees even more dependent on Social Security. The CEOs, of course, enjoy lavish retirement packages, averaging $9 million each, according to a study by the Institute for Policy Studies. Click here to see a chart of CEO retirement assets vs. underfunded employee pensions (PDF).
The Real Corporate Tax Loophole Agenda
Many Fix the Debt firms pay a negative tax rate, which contributes greatly to the federal deficit. Worse, Fix the Debt firms are pushing for a "globally competitive" territorial tax system that would increase the debt by $1 trillion over ten years and encourage the offshoring of U.S. jobs, according to Citizens for Tax Justice. This tax cut is not listed in their online goals and rarely spoken of explicitly, but it is mentioned on a slideshow buried on the group's website. The switch would not only add to the deficit, it results in a windfall of some $134 billion dollars for at least 63 Fix the Debt firms, including Google and GE, according to a report by the Institute for Policy Studies. Click here to see a table of 10 top winners from a territorial tax system (PDF).
Many of the Firms Are Federal Defense Contractors
While Fix the Debt targets government programs for the middle class, 38 Fix the Debt leaders are tied to companies with defense contracts totaling $43.4 billion in 2012, as PAI has documented. Boeing (with $25.1 billion in defense contracts) and Northrop Grumman (with $8.5 billion) lead the pack. Boeing CEO W. James McNerney, Jr. is on Fix the Debt’s CEO Council, and Northrop Grumman board member Vic Fazio is on Fix the Debt’s steering committee. Click here to see a chart of the top six defense contractors with Fix the Debt ties (PDF).
Fix the Debt Leaders & Conflicts of Interest
Fix the Debt biographies consistently fail to expose the financial and lobbying ties of Fix the Debt leaders. You can see a chart of undisclosed financial interests by clicking here or visit our Fix the Debt Leaders page for more detail.
Fix the Debt Leader Maya MacGuiness Once Promoted the Privatization of Social Security
Maya MacGuineas spearheads the Fix the Debt
campaign. She is the president of Fix the Debt's parent organization, the Committee for a Responsible Federal Budget, which is a project of the Peterson-funded New America Foundation
(NAF). MacGuineas was dubbed "queen of the deficit scolds" by economist Paul Krugman
Although it is not disclosed on her Fix the Debt bio, she has long advocated for the privatization of Social Security (see 2001 testimony.
UNDISCLOSED CONFLICT OF INTEREST: MacGuineas' husband Robin Brooks is a managing director and a currency trading analyst at Goldman Sachs. Goldman Sachs lobbies around federal tax issues affecting banking and securities and is a member of the Managed Funds Association, which lobbies against efforts to make Wall Street pay its fair share such as the proposed "Robin Hood Tax," a a tiny tax on trades that some economists project could raise $1 trillion over 10 years.
Oops, Phil Bredesen Reveals "Artificial Crisis" Strategy
is the former Democratic Governor of Tennessee and was a superdelegate in the 2008 Democratic presidential nomination. He is a former healthcare industry executive (he founded HealthAmerica Corporation, an insurance company, which he sold in 1986 for about $385 million), and is currently on the board of directors of Vanguard Health Systems,
a $5 billion hospital chain, receiving an annual compensation of $240,005 in 2011.
Bredesen is on the steering committee of the Campaign to Fix the Debt. In January 2013, Bredesen admitted that Fix the Debt's strategy was to create an "artificial crisis" to achieve a "grand bargain" on Medicare and Social Security.
UNDISCLOSED CONFLICT OF INTEREST:Bredesen is currently on the board of directors of Vanguard Health Systems, a $5 billion hospital chain, receiving an annual compensation of $240,005 in 2011. Vanguard lobbied on federal appropriations issues in the third quarter of 2012. Vanguard's biggest owner is the private equity firm Blackstone Group (Blackstone and its affiliates acquired Vanguard in 2004). Blackstone was co-founded by Fix the Debt funder Pete Peterson. Bredesen has been an investor in a number of healthcare companies in addition to HealthAmerica Corp., including Coventry Health Care (which was recently sold to Aetna for $5.6 billion), First Commonwealth, and Qualifacts Systems Inc. For a time Bredesen was being considered for Health and Human Services secretary in the first Obama administration, but lost out to Kathleen Sebelius. Responding to opposition to his potential appointment from national and Tennessee healthcare advocates, Bredesen told the Wall Street Journal "advocacy groups don't matter nearly as much as the pharmaceutical groups, the hospitals, the doctors' groups. There's a lot of very powerful interest groups that will play in this thing." Bredesen is on the Governor's Council of the Bipartisan Policy Center, which received $400,000 from the Peter G. Peterson Foundation in 2011 to fund its Debt Reduction Task Force.