Debt Fixers Line their Pockets, Steal from Ours
By George Goehl
With full-page ads in national news outlets, a “millennial-outreach” nationwide bus tour, and tens of millions of dollars to spend before Congress concludes its budget battles, Campaign to Fix the Debt—the latest effort of billionaire Wall Street investor Peter G. Peterson—will not be ignored. That’s not to say that Fix the Debt’s plans, which call for cuts to Medicare and Social Security while giving CEOs large corporate tax breaks, are good ones, or supported by the public. They’re not, and they’re not. But Peterson may be willing to spend his money to ensure that the rest of us don’t get to keep ours.
Let’s back up. Long before the latest debt ceiling scare, Fix the Debt, a project of the Committee for a Responsible Federal Budget, was advocating for measures they say would control spending and help grow the economy. But “grow” the economy, it turns out, is in the eye of the beholder. Fix the Debt is no grassroots campaign, but a corporate coalition of 90 CEOs and prominent lobbyists, funded by $60 million in contributions from corporations like Bank of America, Honeywell and Citigroup. What grows their personal economies are destructive policies like a “territorial tax system,” which would give Fix the Debt’s corporate membership a free pass on corporate profits stashed overseas. If that sounds small, it’s not: in 2012, Fix the Debt corporations had a combined total of $544 billion overseas, and would win as much as $173 billion in immediate tax windfalls if Congress adopted their plan.
That’s how it is with Fix the Debt. They’ve masqueraded as a bipartisan grassroots campaign seeking to solve our nation’s economic problems, but really, they’re only out to solve their own. Actually, it’s worse than that. The CEOs leading Fix the Debt are largely responsible for our government’s debt—they’ve lobbied Congress for special tax breaks and wasteful subsidies, and often, they’ve paid virtually nothing in taxes because of their influence over the tax code. Last year, General Electric provided Fix the Debt’s sponsor, the Committee for a Responsible Federal Budget, with a $1 million donation—and paid $0 in taxes. JP Morgan Chase, recently fined a record $13 billion for its part in crashing our economy, nonetheless found the cash to give Fix the Debt a $500,000 donation. (And don’t worry; JP Morgan Chase should be able to write off most of that eye-popping fine as a tax deduction.)
That part of the debt, though, they want to keep. How do they want to “fix” it? Apparently, that’s on us.
Fix the Debt co-founders Alan Simpson and Erskine Bowles have repeatedly called for cuts to Social Security, for increasing the full retirement age to 69, and preventing workers from receiving reduced benefits until age 64. Their membership, including Blackrock CEO Laurence Fink, agrees. In fact, Fink wants to raise the retirement age to 70 because “most men and women in this country have jobs that we sit around… Even factory work in many cases is not as back breaking as it used to be.” That’s awfully rich coming from someone whose 2012 compensation of $75 million allows him to earn the average monthly Social Security benefit of $1,261 in about two minutes.
The hypocrisy reserved for students, though, is even worse. Student debt now exceeds $1 trillion—higher than our nation’s credit card debt, auto and housing loans. Yet Fix the Debt’s plan proposes allowing student loan interest costs to accrue while students are still in school, increasing student loan costs by $55 billion. They also advocated to increase the current 3.4 percent interest rate on subsidized student loans—all while running a corporate-backed campaign to reach out to students, The Can Kicks Back.
Whether or not Fix the Debt is intentionally cruel can be debated, but there’s no question they view our nation’s economy and tax policy through a self-interested lens. The proposals they promote, which undermine the economic security of middle- and lower-income families, would ironically weaken the economy. They’d drastically cut investments in domestic programs like education, infrastructure and research and development – the very programs we need to inspire the next American generation of innovation and prosperity. And of course, the best ways to reduce debt are to put Americans back to work and to have corporations that have received massive tax breaks pay their fair share to rebuild the economy they’ve prospered in.
But they already knew that, didn’t they?
Goehl is executive director of National People’s Action.