This is a dangerous time. In Washington, the country’s Richie Riches are stirring up a panic about a so-called “fiscal cliff.” If they succeed, we’ll get a “grand bargain” that will give them millions in corporate welfare while America’s meager “social safety net” is destroyed. This will be called “shared sacrifice.”
A group of 350 economists has released a letter warning lawmakers that the fragile economic recovery is being threatened by “obsessive concern with cutting deficits that has infected both parties.” (http://jobsnotausterity.org/) They argue that deficit-reducing measures will not alleviate the “mass unemployment, rising poverty, and declining wages” that are holding back the recovery.
The economists say Congress should focus on public investments that will boost job and economic growth. The letter continues:
“Yet too many in Washington are fixated on cutting public spending to balance the budget, not on how to put people back to work and get our economy going. There is no theory of economics that explains how we can deflate our way to recovery. Businesses are not basing investment decisions on how much Congress cuts the debt in 2023. As Great Britain, Ireland, Spain and Greece have shown, inflicting austerity on a weak economy leads to deeper recession, rising unemployment and increasing misery. ...
“The budget hawks have the sequence backwards. Public outlay for jobs and recovery come first, growth is restored, and revenues follow. Budget cuts in a deep slump lead only to a deeper slump.”
Right now, a coalition of the largest corporate firms and advocacy groups is lobbying in Washington for wide-ranging cuts in government spending. The group, which includes 80 of the country’s most powerful CEOs, is called “The Campaign to Fix the Debt.” It was co-founded by former Clinton White House Chief of Staff Erskine Bowles and former Republican Sen. Alan Simpson, previously the co-chairs of President Obama’s bipartisan National Commission on Fiscal Responsibility and Reform.
The Institute for Policy Studies just released a report entitled “The CEO Campaign to ‘Fix’ the Debt: A Trojan Horse for Massive Corporate Tax Breaks.” (www.ips-dc.org/reports/ceocampaign-to-fix-the-debt) They note that the 63 “Fix the Debt “ companies could gain as much as $134 billion in windfalls if Congress approves one of their main schemes — a “territorial tax system.” Under this system, companies wouldn’t 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 due 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.
I got put on an email list of this “Fix the Debt” coalition by Rep. Jared Polis after I attended a Boulder workshop in July on balancing the federal budget that was sponsored by Polis. A representative of the Concord Coalition ran the event. Ari Berman in The Nation described the Concord Coalition as “penny pinching, anti-government and pro-corporate ideologues with a board filled with K street lobbyists and corporate executives.”
The workshop was pre-packaged and limited any genuine discussion with Polis. Nevertheless, participants kept bringing up the Congressional Progressive Caucus’s “People’s Budget” (http://cpc.grijalva.house.gov/the-peoples-budget/), which could balance the federal budget in 10 years, and preserve the “social safety net.” Polis (a member of that caucus) wasn’t too interested, said it is “just one of many” budgets.
Meanwhile, Sen. Bernie Sanders of Vermont has been circulating a dear colleague letter in the Senate declaring that Social Security benefit cuts should not be a part of any “grand bargain.” Colorado Sens. Mark Udall and Michael Bennet have yet to sign the pledge.
This is upside down. Expand Social Security and Medicare and give people jobs.
—Anderson is a retired CU librarian and a member of Democratic Socialists of America.
This opinion column does not necessarily reflect the views of Boulder Weekly.