Dec 11, 2012
Fix the Debt has emerged as a powerful player in the fiscal cliff showdown in Washington. From The Situation Room with Wolf Blitzer to The Daily Show, the campaign’s founders and CEO council are hitting the network talk show circuit nearly every day to educate the public about its goals of increasing tax revenue, cutting government spending and overhauling Social Security and Medicare. It’s launched an ad blitz and circulated a citizen’s petition that’s collected more than 300,000 signatures. The group has even met with President Obama, White House officials and lawmakers on Capitol Hill.
But this nonpartisan coalition’s seemingly moderate agenda is anything but that. Here are five things you need to know:
1. Fix the Debt has recruited CEOs and executives of 130 US corporations to put pressure on Congress. Many of these companies also belong to another coalition that seeks to cut corporate tax rates even further. Seriously? Verizon Communications and Boeing already enjoy negative income tax rates – meaning they actually made more money after taxes.
2. The Washington Post reports that small firms and partnerships that pay taxes based on individual income tax “fear that the chief executives in Fix the Debt may be comfortable with a rise in individual income tax rates, knowing that it could create flexibility for cutting corporate taxes during tax-reform deliberations next year.”
3. Fix the Debt calls for a “territorial tax system,” which exempts US corporations’ offshore profits from US taxes. If adopted, the campaign’s member companies stand to gain as much as $134 billion in tax windfalls, according to an analysis by the Institute for Policy Studies. Sarah Anderson, director of the institute’s Global Economy Project, writes, “That's $134 billion that won't go towards fixing the debt. To put that figure in perspective, it would be enough to cover the salaries of two million elementary school teachers for a year.”
4. The Institute for Policy Studies also found that group’s business leaders, who are seeking cuts in Social Security and Medicare, are “contributing to Americans’ retirement insecurity by funneling enormous sums into their CEO retirement accounts while underfunding their employee pension funds.” The 71 Fix the Debt CEOs of publicly held companies sit on an average of $9 million each in retirement funds.
5. New York Magazine describes the self-interested group like this: “Fix the Debt prefers to keep its behind-the-scenes operations under wraps. 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.”
Photo: New York Stock Exchange