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Portal:Fix the Debt

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Fix the Debt Astroturf Supergroup

Learn more about Pete Peterson-funded astroturf projects at the Fix the Debt Portal.

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The Campaign to Fix the Debt is the latest incarnation of a decades-long effort by former Nixon man turned Wall Street billionaire Pete Peterson to slash earned benefit programs such as Social Security and Medicare under the guise of fixing the nation's "debt problem." Through this special report -- and in partnership with The Nation magazine -- the Center for Media and Democracy exposes the funding, the leaders, the partner groups, and phony state "chapters" of this astroturf supergroup," whose goal is to achieve a grand bargain on austerity by July 4, 2013.[1]
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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.[2] As of 2011, the Huffington Post reported that Peterson had personally given $458 million to the Foundation.[3]

Peterson told the Washington Post that he gave Fix the Debt $5 million in funding;[4] Fix the Debt was announced on the Peterson Foundation website[5] and Peterson appeared at the Fix the Debt launch in July 2012.[6] 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,[7] and "destroy Social Security as we know it," according to Social Security Works.[8] 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.

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Key Findings & Useful Charts

Astroturf Supergroup

With 127 CEOs able to schedule meetings with President Obama and Congressional leaders, numerous PR firms lending a hand,[9] 80 staff,[10] 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," [11] 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.[10] 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 [12]and one recalls that their goal was 10 million.[13]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.[14] 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.[15] The CEOs, of course, enjoy lavish retirement packages, averaging $9 million each, according to a study by the Institute for Policy Studies.[16] 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.[14] 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.[17] 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.[18] 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).

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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

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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[19] Although it is not disclosed on her Fix the Debt bio, she has long advocated for the privatization of Social Security (see 2001 testimony.)[20]

UNDISCLOSED CONFLICT OF INTEREST: MacGuineas' husband Robin Brooks is a managing director and a currency trading analyst at Goldman Sachs.[21] 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.[22][23]

Oops, Phil Bredesen Reveals "Artificial Crisis" Strategy

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Phil Bredesen 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,[24] a $5 billion hospital chain, receiving an annual compensation of $240,005 in 2011.[25]

Bredesen is on the steering committee of the Campaign to Fix the Debt.[26] 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.[27]

UNDISCLOSED CONFLICT OF INTEREST:Bredesen is currently on the board of directors of Vanguard Health Systems,[28] a $5 billion hospital chain, receiving an annual compensation of $240,005 in 2011.[29] Vanguard lobbied on federal appropriations issues in the third quarter of 2012.[30] Vanguard's biggest owner is the private equity firm Blackstone Group[31] (Blackstone and its affiliates acquired Vanguard in 2004).[32] Blackstone was co-founded by Fix the Debt funder Pete Peterson.[33] 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)[34], 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[35] "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.[36]

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Peterson-Funded Fix the Debt Partner Groups

Pete Peterson has given at least $5 million to Fix the Debt, according to the Washington Post.[37] Fix the Debt is listed as a project of the Committee for a Responsible Federal Budget (CRFB) on CRFB's website. Peterson has long funded CRFB and served on its board.[38] CRFB is itself a project of the New America Foundation (NAF). In the 1990s, CRFB partnered with tobacco firms, anxious to avoid higher excise taxes on cigarettes, to tank the Clinton health care plan.[39] Today, critics claim CRFB is a "Trojan Horse" for a similar agenda to cut taxes for wealthy corporations who want to create a territorial tax system.[40]

The Peter G. Peterson Foundation funds at least six of the "partner" organizations listed on Fix the Debt's website:

With regard to Fix the Debt and its many partner organizations, the National Journal observed: "Singlehandedly, Peterson has created a loose network of deficit hawk organizations that seem independent but that all spout the Peterson-sanctioned message of a 'grand bargain.'"[45]

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Fix the Debt Phony State Chapters & Lobbyist Leaders

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"Up to this point, Fix the Debt's ad campaigns have been largely Washington-focused, combined with a heavy dose of CEO-lobbying. The next phase, Romano says, is national outreach," Fortune Magazine reported in January 2013.[46] Fix the Debt has 23 “state chapters” listed on its website as of February 2013.[47] Those state chapters have been created following a similar formula: "Select bipartisan co-chairs along with a passel of business leaders, write a press release, hold a teleconference et voilà!: a 'chapter' is born that looks like an organic, bipartisan effort."[48]

More than 90 Fix the Debt leaders at the state level are current or former lobbyists, and many lobby for Fix the Debt firms, according to a review of federal and state lobbying databases by the Center for Media and Democracy in February 2013. Click here to see a list of state leaders and their lobbying ties.

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Featured Articles

Recent Press

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The Pyramid Scheme

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Join the Conversation

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Wall Street Welcomes Fix the Debt

Fix the Debt leader Maya MacGuineas, Honeywell CEO David Cote, financier Steven Rattner (who was banned from the securities industry for his involvement in a pension-fund kickback scheme) and other CEOs ring the bell on the New York Stock Exchange.
The Campaign to Fix the Debt Rings the Opening Bell at the NYSE
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The Can Kicks Back

The Can Kicks Back -- with its foam "AmeriCAN" character -- is one of many efforts to convince the public that young people care more about the national debt than their own. Fix the Debt leaders talk about the group as if it "popped up" out of nowhere, but it apparently popped up in the Fix the Debt offices, where it shares space with Maya MacGuineas' Committee for a Responsible Federal Budget.[49]
Harlem Shake (The Can Kicks Back edition)
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Fix the Debt Firms: Unpaid Taxes and Underfunded Pensions

Fix the Debt CEOs say they are worried about the debt and deficits, yet many Fix the Debt firms pay a negative tax rate or a tax rate well below the standard 35 percent -- adding greatly to our nation’s deficit.  Fix the Debt CEOs say that what is needed to balance the books is cuts to earned benefit programs like Social Security (which is a separate federal program not counted in  the federal budget at all). At the same time, many of these same CEOs under-fund their employee pension plans, making it likely that their workers will be even more dependent on Social Security.  This hypocrisy has led to a campaign called "Flip the Debt," which calls upon major corporations to pay their fair share of taxes.


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  • Honeywell
    • CEO David Cote, compensation: $37,842,723[50]
    • David Cote’s retirement assets: $78,084,717[51]
    • Honeywell's average effective tax rate (2008-2010): -0.7%[14]
    • Underfunded employee pension: -$2,764,000,000[51]


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  • General Electric
    • CEO Jeffrey Immelt, compensation: $21,581,228[52]
    • Jeffrey Immelt's retirement assets: $53,301,387[51]
    • GE's average effective tax rate (2008-2010): -45.3%[14]
    • Underfunded employee pension: -$21,756,000,000[51]


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  • Verizon
    • CEO Lowell McAdam, compensation: $23,120,499[53]
    • Lowell McAdam's retirement assets: $8,725,445[51]
    • Verizon's average effective tax rate (2008-2010): -2.9%[14]
    • Underfunded employee pension: -$6,472,000,000[51]



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  • Corning
    • CEO Wendell Weeks, compensation: $10,333,531[54]
    • Wendell Weeks' retirement assets: $21,229,195[51]
    • Corning's average effective tax rate (2008-2010): -0.2%[14]
    • Underfunded employee pension: -$454,000,000[51]


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  • Merck
    • CEO Kenneth Frazier, compensation: $13,347,652[55]
    • Kenneth Frazier's retirement assets: $14,428,904[51] 
    • Merck's average effective tax rate (2008-2010): 11.5%[14]
    • Underfunded employee pension: -$1,935,000,000[51]



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  • Delta Air Lines
    • CEO Richard Anderson, compensation: $8,854,554[56]
    • Underfunded employee pension: -$11,504,000,000[51]





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Fix the Debt Articles

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References

  1. Campaign to Fix the Debt, CEO Talking Points 10/2/12, organizational document, October 2, 2012.
  2. Peter G. Peterson, Why I’m Giving Away $1 Billion, The Daily Beast, May 29, 2009.
  3. Ryan Grim and Paul Blumenthal, Peter Peterson Spent Nearly Half A Billion In Washington Targeting Social Security, Medicare, Huffington Post, May 15, 2012.
  4. Suzy Khimm, How Fix the Debt is coping with its 'fiscal cliff' setback, Washington Post, January 11, 2013.
  5. Peter G. Peterson Foundation, Civic Leaders, CEOs and Budget Experts Gather to Announce Launch of The Campaign to Fix the Debt, organizational website under "Projects and Grants," July 17, 2012.
  6. New America Foundation, Launch of the Fix the Debt Campaign: July 17th, 2012 - National Press Club, youtube page, July 19, 2012.
  7. Josh Bivens and Andrew Fieldhouse, Fiscal commissioners' proposal would cost millions of jobs, Economic Policy Institute, November 16, 2010.
  8. Social Security Works, No Drastic Changes to Social Security, The Olympian op-ed, September 25, 2009.
  9. Virgil Dickson, "Burson's Proof unit launches Fix the Debt ad campaign", PR Week, November 16, 2012.
  10. 10.0 10.1 Anne VanderMey, "Fix the Debt isn't going anywhere", Fortune, January 30, 2012.
  11. Campaign to Fix the Debt, CEO Talking Points 10/2/12, organizational document, October 2, 2012.
  12. Carol E. Lee, "Morgan Stanley CEO Asks Employees to Press Congress on Fiscal Cliff", Washington Wire, November 27, 2012
  13. Amy Bingham, "The Fiscal Cliff: Congress’ Imminent Armageddon", OTUS, Jul 17, 2012
  14. 14.0 14.1 14.2 14.3 14.4 14.5 14.6 Citizens for Tax Justice, Why Congress Should Reject A “Territorial” System and a “Repatriation” Amnesty: Both Proposals Would Remove Taxes on Corporations’ Offshore Profits, fact sheet, October 19, 2011.
  15. Institute for Policy Studies, A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts, organizational report, November 21, 2013.
  16. Institute for Policy Studies, A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts, organizational report, November 21, 2013.
  17. Institute for Policy Studies, The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks, organizational report, November 13, 2013.
  18. Public Accountability Initiative, Operation Fiscal Bluff, organizational report, December 19, 2012.
  19. Paul Krugman, Maya and the Vigilantes, New York Times, December 22, 2012.
  20. New America Foundation, Testimony of Maya MacGuineas, organizational document, testimony from the President's Commission to Strengthen Social Security on October 18, 2001.
  21. Susanne Craig, Goldman Names Managing Directors, New York Times, November 18, 2011.
  22. American Bankers Association, Lobbying Report, trade association lobbying report with U.S. Congress, July 1 - September 30, 2012.
  23. Managed Funds Association, Lobbying Report, trade association lobbying report with U.S. Congress, July 1 - September 30, 2012.
  24. Vanguard Health Systems, "Bredesen Biography", organizational website, accessed January 1, 2013.
  25. Vanguard Health Systems, Inc., Schedule 14A Proxy Statement, corporate Securities and Exchange Commission filing, October 19, 2012, p. 55.
  26. Fix the Debt, CEO Fiscal Leadership Council, organizational document, accessed January 2013.
  27. Chas Sisk, Gov. Phil Bredesen Calls for 'Artificial Crisis' on the Debt, Tenneseean, January 29, 2013.
  28. Vanguard Health Systems, "Bredesen Biography", organizational website, accessed January 1, 2013.
  29. Vanguard Health Systems, Inc., Schedule 14A Proxy Statement, corporate Securities and Exchange Commission filing, October 19, 2012, p. 55.
  30. Capitol Health Group, LLC, Lobbying Report, lobbying firm lobbying report filed with U.S. Congress on client Vanguard Health Systems, July 1 - September 30, 2012.
  31. Vanguard Health Systems, Inc. Major Holders, Yahoo! Finance, accessed January 2013.
  32. #109 Vanguard Health Systems, "America's Largest Private Companies," Forbes, 2010.
  33. Peter G. Peterson Foundation, Peter G. Peterson, Founder and Chairman, organizational website, accessed January 2013.
  34. Kevin Rector, "Coventry Health Care To Pay $3 Million To Avoid Prosecution in Medicare Case", The Hartford Courant, November 21, 2012.
  35. Laura Meckler, HHS Candidate Draws Fire, Fights Back", The Wall Street Journal, February 10, 2009.
  36. Peter G. Peterson Foundation, "Bipartisan Policy Center, Inc.", organizational website, accessed January 1, 2013.
  37. Suzy Khimm, How Fix the Debt is coping with its ‘fiscal cliff’ setback, Washington Post Wonkblog, January 11, 2013.
  38. Committee for a Responsible Federal Budget, CRFB, organizational website, accessed January 2013.
  39. Paul Blumenthal and Ryan Grim, CRFB Corporate Ties: Budget Watchdog Funded By Big Tobacco In 1990s Health Care Fight, Huffington Post, January 24, 2013.
  40. Institute for Policy Studies, The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks, organizational report, November 13, 2012.
  41. 41.0 41.1 Peter G. Peterson Foundation, New America Foundation/Committee for a Responsible Federal Budget, organizational website, accessed January 2013.
  42. Peter G. Peterson Foundation, Comeback America Initiative, organizational website, accessed January 2013.
  43. Peter G. Peterson Foundation, Committee for Economic Development, organizational website, accessed January 2013.
  44. Peter G. Peterson Foundation, Concord Coalition Corporation, organizational website, accessed January 2013.
  45. Nancy Cook, Billionaire Peterson Sounds Alarm on Deficit, National Journal, November 26, 2012. NB: CAP received half a million dollars from the Peterson Foundation in 2011.
  46. Anne VanderMey, "Fix the Debt isn't going anywhere", Fortune, January 30, 2012.
  47. Fix the Debt, "State Chapters", organizational website, accessed February 14, 2013.
  48. Mary Bottari, Pete Peterson's Puppet Populists, The Nation, February 21, 2013.
  49. Paul Blumenthal and Christina Wilkie, Fix The Debt Campaign's Bipartisan Veneer Masks Conservative Backing, Huffington Post, December 3, 2012.
  50. Honeywell, "2011 Annual Report", organizational report.
  51. 51.00 51.01 51.02 51.03 51.04 51.05 51.06 51.07 51.08 51.09 51.10 Institute for Policy Studies, "A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts", organizational report, November 21, 2013.
  52. General Electric, "2011 10K Form", organizational document, page 27.
  53. Verizon, "2011 Annual Report", organizational document, page 25.
  54. Corning, "2011 Annual Report", organizational report, page 63.
  55. Merck, "2011 10K", organizational document, page 41.
  56. Delta Air Lines, "2011 Annual Report", organizational document, page 24.