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May 05, 2013 1:10 PM The latest on Pete Peterson’s austerity front group, Fix the Debt: more shenanigans revealed!

By Kathleen Geier

You may have heard about a relatively recent player in the national debate over austerity-nomics. Fix the Debt portrays itself as a public interest group that is earnestly committed to fiscal responsibility and looking out for our children’s future (it always is about their touching concern for the children, isn’t it?) The group claims to support “a common sense solution to prevent disaster and renew America’s economic strength,” and it likes to give the public the impression that its membership is heavily made up of ordinary citizens and workers.

But actually, what it is is another elite-driven Pete Peterson front group consisting of billionaire CEOs lobbying for reverse Robin Hood fiscal policies that enrich themselves, immiserate the rest of us, and continue to run this country’s economy into the ground. Last week, the Institute for Policy Studies and the Campaign for America’s Future released a report that reveals new information about the group’s hypocritical and self-serving agenda.

An earlier report on Fix the Debt exposed the group’s extensive ties to defense contractors. The new one looks at the ways that 90 publicly held corporations that are members of Fix the Debt exploit loopholes in the tax code to help themselves to taxpayer subsidies worth many hundreds of millions of dollars. They happily rake in the taxpayer cash at same time they’re crying wolf about deficits and trying to pick the pockets of the rest of us by inflicting an austerity agenda. It’s a hustle so brazen that it deserves the sincere admiration of professional con artists everywhere.

The corporations in question are taking advantage of something known as the “performance pay” loophole. Seeking to rein in out-of-control CEO pay, in 1993, Congress capped the tax deductibility of executive pay at $1 million. But corporations quickly discovered a loophole: “performance-based” pay (mostly in the form of stock options) was exempted from the $1 million cap. And thus the madness of taxpayers’ subsidizing outrageous executive compensation continued.

Here are some of the deets about how the Fix the Debt crew is weaseling out of paying their fair share of the tax burden:

During the three-year period 2009-2011, the 90 publicly held corporate members of the austerity-focused “Fix the Debt” lobby group shoveled out $6.3 billion in pay to their CEOs and next three highest-paid executives.
These 90 Fix the Debt member firms raked in at least $953 million — and as much as $1.6 billion — from the “performance pay” loophole between 2009-2011. The exact full value of corporate windfalls from this loophole will remain impossible to compute until we have more complete mandated disclosure for executive compensation.

The biggest offenders include UnitedHealth Group, the nation’s largest HMO, which taxpayers have subsidized to the tune of at least $68 million in pay for its CEO, Stephen Hemsley; and Discovery Communications, which lined its pockets with $37 million in taxpayer subsidies for the pay of its chief executive, David Zaslav.

Meanwhile, these fine corporate citizens are demanding that government slash Social Security and other government programs that millions of Americans rely on — especially in a depressed economy where many need them more desperately than ever. This is straight-up class warfare, folks!

Ultimately, this report makes a very simple point:

If Fix the Debt CEOs were serious about addressing our nation’s fiscal challenges, they would push for greater fairness in the tax code, including the elimination of entitlement programs benefiting CEOs like the “performance pay” loophole.

But sadly, we are never ever ever ever going to see them do that. Like, ever.

Kathleen Geier is a writer and public policy researcher who lives in Chicago. She blogs at Inequality Matters. Find her on Twitter: @Kathy_Gee

Comments

  • Stella B on May 05, 2013 3:45 PM:

    After all, what could be better for our children's future than laying off teachers and raising tuition at state univesities?

  • somethingblue on May 05, 2013 4:58 PM:

    Why, cutting Social Security, of course!

  • Ron Byers on May 05, 2013 5:08 PM:

    Is anyone else as bored with the same old, same old. I watched the Sunday gabfests this morning and realized most of the guests were old and all of the guests had old ideas. Now we get another post about somebody preaching austerity now, as though the country hasn't moved on from 2008-2010.

    Please don't waste anymore of our time with yesterday's news. Kathleen try to find something to talk about we can all agree is new and important.

  • MuddyLee on May 05, 2013 5:39 PM:

    Kathleen - thanks - I think it's important to point this stuff out - again and again and again - if they are going to rob us, they shouldn't insult us too by preaching austerity and balanced budgets. I too am tired of old guests on the "serious" tv shows - some of these people I've been hearing/seeing for 25 years - so lately I've enjoyed the younger hosts on MSNBC - Rachel, Chris, Steve, Melissa - I think they are excellent and they tend to have people on as guests that are not old and boring.

  • thebewilderness on May 05, 2013 6:58 PM:

    If they ever stop catapulting the propaganda the people might notice they are stealing from us.

  • smartalek on May 05, 2013 8:47 PM:

    @Ron Byers:
    As long as the liars keep lying, it's essential that we, and ours, keep pushing back.
    And it's not an either/or: there's plenty of room to refudiate the corporate/1% propaganda and to discuss "new and important" concepts too.
    It's not as if there are the same limits on or costs to web-pages as there are to physical pages in the newspapers.
    If you think ignoring the media manipulation is an effective political strategy, you might ask Pres Kerry how it worked out for him.

  • RaflW on May 06, 2013 8:30 AM:

    Let's not forget that UnitedHealth group is messing up the Veteran's TriCare West so bad that they've had to get Congressional intervention for a stopgap to help vets get the care they need.

    And UnitedHealth is charging DoD $21 billion over the next 5 years for it's takeover.