A new online resource launched on Thursday aims to show that behind the scenes of the ongoing fiscal battles in Washington—including the current fight over 'sequestration'—a billionaire-funded and CEO-backed media campaign is operating as an 'astroturf supergroup,' using its outsized pocketbook and influence to peddle long-discredited policy prescriptions for the ailing economy.
According to a new joint investigative project between the Center for Media and Democracy and The Nation magazine, the 'Fix The Debt' campaign—which launched itself last year in the midst of an earlier episode in the "fiscal crisis charades" that have plagued Washington since the Republicans regained control of the House of Representatives in 2010— is "one of the most hypocritical corporate PR campaigns" created in Washington in decades.
This group is comprised of an all-too familiar chorus of people—culled from a cadre of politicians and wealthy elites—who spend their days voicing the mantra of 'deficit reduction' and 'entitlement reform' as a way to liberate the federal budget from debt and kick start the economy with promises of jobs and growth.
And according to the new investigation—in addition to being wrong most of the time—the members of the group share two other common bonds. Wealth and corporate power.
Key to the Fix the Debt strategy is ginning up a crisis.
Funded in large part by billionaire Pete G. Peterson—whose expressed mission is to spend nearly $1 billion of his hedge fund fortune to slash earned benefit programs like Social Security and Medicare—the CEO-laden campaign has now become an 'astroturf supergroup' which uses its outsized financial muscle and well-oiled media operatives (many of whom are former high ranking elected officials) to inject itself into the ongoing debate about the budget by pushing false solutions under the guise of "fiscal responsibility".
Ostensibly the group says it is just a friendly coalition of "non-partisan" business leaders, CEOs, and former politicians who want to "put America on a better fiscal and economic path."
But according to CMD, the group which pushes the wisdom of its co-founders, Erskin Bowles and Alan Simpson, as sacred doctrine, the group's sole purpose is to push an "austerity agenda" that puts the interests of the nation's wealthiest individuals and most powerful corporations ahead of the elderly, middle class workers, and the most vulnerable in society.
According to CMD, Fix the Debt members—which include at least 127 high-powered corporate CEOs—hide their "self-serving motives" by wrapping themselves in patriotic language of “shared sacrifice.”
These CEOs are bolstered, as CMD explains,
by elder “statesmen” (many of whom have gone through the revolving door and have undisclosed financial ties to firms that lobby for tax loopholes and other corporate welfare that contribute to the deficit), plus four PR firms, 80 full-time staff members, 23 phony state chapters, and a raft of Peterson-funded “partner organization,” Fix the Debt has targeted a budget of $60 million in "the first phase."
Key to the strategy is ginning up a crisis. In lockstep, the CEOs, politicians, and partner organizations stormed the media last fall warning of the looming disaster of the so-called “fiscal cliff.” Breaching the fiscal cliff “will lead to chaos,” warned Erskine Bowles; “derail the fragile recovery,” said Goldman Sachs CEO Lloyd Blankfein; generate a "shock to the financial markets and a painful return to the recession,” said the CEO of Morgan Stanley.
To achieve traction for its campaign, Fix The Debt has developed a web of state-level chapters, an army of lobbyists, established corporate partnerships, and a fomented relentless media campaign to push its ideology.
As economist Dean Baker, in an article published as part of The Nation's special coverage of the group, writes:
Believers in arithmetic are in full retreat in the national budget debate, thanks in large part to Pete Peterson’s Fix the Debt gang. The range of acceptable debate goes from yelling that the sky is falling because of the deficit to the more moderate perspective shown by President Obama and Democratic congressional leaders in favor of a gradual and balanced approach to deficit reduction. But stating the simple and obvious truth—that we have a large deficit because the economy collapsed—makes one an extremely nonserious person in Washington.
And now, as President Obama and Congress duke it out over the impending across-the-board spending cuts—known as "sequestration"—the Fix The Debters are using this latest "invented crisis" to push, once again, cuts to key social programs while defending outsized tax rates for the wealthy.
As Baker argues, the most insidious part of the group's message is its bogus focus on deficits. "For all the debate, the facts on the deficit are not really debatable," he writes. "We had a very modest deficit in 2007, before the collapse of the housing bubble sank the economy. The deficit that year was 1.2 percent of GDP, and it was projected to stay near 1.5 percent well into the current decade, even if the Bush tax cuts were not allowed to expire. The debt-to-GDP ratio was actually falling; we could run deficits of this size forever."
But just as in previous episodes, like the January "fiscal cliff" debate which sucked up almost every molecule of oxygen in Washington, CMD's Mary Bottari says, "The Fix the Debt gang will exploit the sequester debate and the debt ceiling debate to advance their plan for lower corporate taxes for them, and austerity for the rest of us."
As the investigation into the group discovered:
Many Fix the Debt firms pay a very low or even a negative average tax rate, contributing to the nation's deficit. Fix the Debt is secretly pushing for a major tax break that would exempt profits earned overseas by U.S. firms from taxation and encourage the offshoring of U.S. jobs. While the Fix the Debt CEOs call for cuts to Social Security, many of the publicly-traded Fix the Debt firms underfund their employee pension plans -- making their workers even more dependent on the popular social insurance plan that American workers pay into with each paycheck.
In addition, the project explains that although the group's steering committee members have "extensive ties to corporations lobbying to preserve dozens of costly tax breaks," none of these are disclosed in their Fix the Debt bios.
As part of its 'package' of resources, the campaign has launched a website —PetersonPyramid.org—which contains detailed information on key aspects of the groups activities, including:
- Fix the Debt Astroturf Supergroup Portal Page
- Fix the Debt's Leadership
- Fix the Debt Leaders' Conflicts of Interest
- Fix the Debt's Partner Groups
- Fix the Debt's Lobbyists
- Fix the Debt's Parent Group
- Fix the Debt's Corporations
- Pete Peterson
- Peter G. Peterson Foundation
- Social Security