“Fix the Debt” is allegedly an impromptu alliance of America’s largest CEOs. But it’ really the latest manifestation of a perenially right-wing, pro-billionaire, pro-corporate lobby – one created years ago by hedge fund manager and former Nixon Cabinet member Pete Peterson. It has assumed many shapes, forms, and identities over the years, always in the guise of a noble and “bipartisan” effort to address what it describes as the “urgent” issue of the Federal deficit.
Any organization that promotes a policy agenda may wind up advocating for goals that benefit some groups more than others. What’s surprising is how routinely this network of organizations undermines its own stated goal of deficit reduction, and how starkly and consistently it serves the self-interest of its sponsors.
Now, confronted with some runaway executives and an aggressive Senator, this allegedly “nonpartisan” group and its most public spokesperson are finally showing their true colors. Behind all the “independent” rhetoric, it’s a network of covert Grover Norquists out to protect tax breaks for millionaires, billionaires, and corporations.
Peterson’s Hydra-headed operation has gone by many names over the years, including the “Comeback America Initiative,” “The Can Kicks Back,” and the Committee for a Responsible Federal Budget, to name just a few. But while the guises have been many, the message has always been the same: Gut Social Security and Medicare. Shrink government. And absurdly, reduce tax rates for millionaires and corporations in the name of deficit reduction.
Like the creature from The Thing, it assumes many forms: A group of young people “spontaneously” organizing themselves. A sudden movement to have town hall meetings on the deficit. And now, America’s CEOs sharing their selfless concern for the national debt’s impact on others.
Whenever it morphs itself it tries to present each new form as a spontaneous reaction by some segment of the population. But the makeshift illusion of grassroots support is hard to maintain, given that a small group of key players forms the core cadre of this shapeshifting antigovernment entity: Erskine Bowles. Alan Simpson. David Walker.
And Maya MacGuineas, who has served as the multifaced creature’s chief spokesperson in several roles, including as nominal head of both the Committee for a Responsible Federal Budget and Fix the Debt.
In the John Carpenter movie, the doctor identifies the disguised creature in the crew by heating a sample of everyone’s blood with wire. Sen. Chuck Schumer got somebody’s blood boiling last week when he said that CEOs from “Fix the Debt” supported a higher tax rate for the wealthy. That sent MacGuineas racing to the Internet to issue a statement:
“”The Campaign to Fix the Debt does not have a position on raising tax rates.”
This statement is credited to “Maya MacGuineas, president of the Committee for a Responsible Federal Budget and head of the Campaign to Fix the Debt,” and it’s unequivocal. It’s also … how shall we put it? … an untruth.
Fix the Debt has a very clear position on tax rates for millionaires, billionaires, and corporations, right there in the group’s “Core Principles” statement. It says that any fiscal plan should include “comprehensive and pro-growth tax reform, which broadens the base, lowers rates, raises revenues, and reduces the deficit.” (Emphasis ours.)
That’s the very same position all of the Thing-like incarnations of the corporate/Peterson lobby hold. Coincidence? We report, you decide.
The Lobbyist At Work
MacGuineas herself has been an extreme anti-tax ideologue for quite some time, using her billionaire-funded platform for years to write appropriately revenue-unfriendly commentary, often with chirpy sales-brochure-ish titles like “The Corporate Tax Is Dying!” (Exclamation point included.) That 2005 piece, published in Legal Affairs, included statements like this one:
“American corporate tax rates are higher than those imposed by most of our trading partners, and that disadvantage takes its toll.”
Not so. The official tax rate is on the high end, but the actual taxes paid by US corporations are lower than those of most other industrialized countries.
“Corporations don’t pay taxes,” MacGuineas writes, “people do.”
Hmmm … where have we heard that argument before?
Then there’s this:
“Ireland’s recent economic success, where per capital GDP went from well below European Union averages to well above, is attributed in part to the country’s reducing its top corporate tax rates …”
MacGuineas, consistent with later “Fix the Debt” declarations, also argues here that US companies shouldn’t pay American taxes for the money they earn overseas. That position would not only worsen the deficit, it would give companies added incentive to keep shipping jobs overseas.
Target: Elderly and Disabled America
In a 2004 piece for The Atlantic called “Radical Tax Reform,” MacGuineas called for eliminating Social Security’s independent funding mechanism, the payroll tax. This would leave the financially independent program dependent on general revenues for the first time in its 75-year history. The upside? As MacGuineas helpfully explains, it “would free employers from matching employees’ Social Security contributions.” This tax break would allow corporations to “create jobs” instead. (CEOs and billionaires to USA: This time we really mean it!)
In its place, MacGuineas proposes a severely regressive consumption tax that would hit consumers far harder than corporations. (There are arguments for well-structured “VAT” programs; MacGuineas doesn’t make any of them.) She also argues for eliminating home mortgage deductions and employer health benefit tax breaks, which would have a devastating impact on the middle class.
MacGuineas is also given to arguing for another position: means-testing Social Security and Medicare. That’s not surprising, since the idea was first widely promoted by another Peterson entity, the Concord Coalition. And while the idea may sound reasonable, the Concord Coalition’s idea of “high earners” who ought to see their benefits cut starts at a lifetime average annual income of only $20,000 per year.
Target: Middle Class
MacGuineas couches her “Radical Tax Reform” piece in progressive terms, but overall it makes a case for a corporate tax bonanza. And while she bemoans our increasingly regressive tax code, she never gets around to mentioning the obvious fix: raising tax rates on our highest earners.
With all these tax breaks for high earners and corporations, do MacGuineas and Crew have any ideas for raising revenue? Actually, they do: take it from the struggling middle class. MacGuineas co-authored a paper with economist Martin Feldsten arguing for a cap on individual income tax deductions – a move that would effectively gut employer health insurance and other vital middle-class programs. (Feldstein’s name may ring a bell with viewers of Inside Job, which explored his use of government positions to promote deregulation – to the great advantage of corporations he served as a board member.
That’s the hidden agenda behind the Peterson/corporate/billionaire lobby: cut tax rates for millionaires, billionaires, and corporations; end the payroll tax; downsize government, including Social Security and Medicare; and gain a little added revenue by shifting the tax burden onto the middle class. And that’s why the lobby’s “Committee For a Responsible Federal Budget” runs articles promoting “rate-reducing tax reform” and others with titles like “Reducing Both Tax Rates and the Deficit is Possible.”
Sure it is: Just give away the store its wealthy sponsors, and stick the rest of us with the bill. (And about those titles: We warned you they sounded like sales brochures.)
The “Bipartisan” Wing of the Republican Party
Fix the Debt’s “Core Principles” also include a statement of support for the private “Simpson-Bowles” proposal issued by those two gentlemen. That proposal was embraced today by the Republican Party as the foundation for its response to President Obama’s fiscal proposal.
But then, the Thing-lobby has many Republican tentacles. MacGuineas’ bio describes her as “John McCain’s advisor on Social Security.” Republican Alan Simpson and putative Democrat Erskine Bowles have both praised far-right Rep. Paul Ryan to the skies, and both endorsed Tea Party Congressional candidates in 2012. Now Bowles is accompanying Fix the Debt’s CEOs to meetings on Capitol Hill, which has given John Boehner’s aides the opportunity to crow that Bowles is pushing a plan similar to the GOP’s.
And, in case you’ve forgotten already, MacGuineas’ comment – “corporations don’t pay taxes; people do” – quickly morphed into Mitt Romney’s infamous comment that “Corporations are people, my friend.” And Romney lost.
Let’s be clear: This crowd doesn’t really care about deficits. It never has. It’s an anti-tax group which pursues its goals by fighting to downsize government programs and “reform” the Internal Revenue code. Its natural allies are the Republican Party, the nation’s mega-corporations, and billionaires.
It’s time they stopped pretending.
(UPDATE: Somebody just sent me a piece by David Sirota which has a somewhat similar “who is Maya MacGuineas?” theme. Read it; it’s good.)