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On the Road with Deficit Hawks

November 28, 2012   ·   2 Comments

Source: NYTX

Joint Deficit Reduction Committee Holds Overview Hearing Of Previous Debt Proposals

By Marie Burns:

In what the New York Times presents as a straight news story appearing on the front page of both the paper and the online edition, reporter Jackie Calmes writes,

 Ladies and gentlemen, coming soon to your city or town (if they have not been there already, and maybe even if they have) are the latest odd couple of politics: the 67-year-old Democratic straight man, Erskine B. Bowles of Charlotte, N.C., and his corny 81-year-old, 6-foot-7 Republican sidekick, Alan K. Simpson of Cody, Wyo.

In addition to calling Bowles and Simpson the “odd couple,” Calmes describes them in her lede as “an improbable buddy act.” There’s nothing odd or improbable about the Catfood Twins. Bowles and Simpson are birds of a feather: two old self-righteous, attention-seeking deficit hacks hawks going on the road with their fear-mongering dog-and-pony show. Perhaps Calmes thinks these two old birds make an odd pair because they ostensibly belong to different parties. But Bowles, an investment banker, is a Southern conservative Democrat (he ran for office twice and lost both times) who, because of his personal wealth, has every reason to skew the tax structure to favor the rich.

Calmes’ account of Simpson and Bowles’ road show is upbeat and cheery. It is not till the third-to-last paragraph that she attempts to summarize objections to the plan the over-the-hill boys are pushing:

Many progressives oppose its proposed savings from Social Security and Medicare. Many conservatives resist proposed tax increases and military cuts. Officials in the White House and in Congress grouse that few Simpson-Bowles fans are aware of particulars, like new gasoline taxes and higher capital gains taxes on inheritances. And critics say the chairmen have oversold the idea, which Republicans have embraced, that Washington can raise revenues by curbing popular tax breaks instead of raising tax rates.

Here’s a bit more detail from John Farrell and Nancy Cook of the National Journal:

The original report calls for huge helpings of higher taxes; cuts in benefits for the elderly, veterans, and government employees; and elimination of coveted special-interest tax breaks and subsidies for Washington’s most powerful and deep-pocketed lobbies…. Conservatives at the Heritage Foundation and Americans for Tax Reform despise the tax provisions. Liberals in ivory towers such as the Center on Budget and Policy Priorities gag on its cuts in Social Security, Medicare, and other safety-net programs….

Republicans are adamantly opposed to the Simpson-Bowles tax hikes. The commission would let the President George W. Bush-era tax cuts expire; end the preferential treatment of capital gains and dividends; apply a means test to popular deductions; hike the federal gas tax by 15 cents a gallon; and eliminate $ 1 trillion in special-interest tax breaks. It also calls for deep defense cuts.

The plan was so unpopular that Simpson and Bowles could not get it to pass out of their own Commission. And as Farrell and Cook wrote, “When a legislative imitation of Simpson-Bowles hit the House floor in March, Republicans and Democrats deserted in droves; it failed on a 382-38 vote.” For a reliable detailed analysis of Simpson and Bowles plan, Richard Kogan of the Center for Budget and Policy Priorities plugs updated figures into the 2010 plan. Kogan’s work may be moot, however. It seems Simpson and Bowles are hard at work on Simpson-Bowles 2.0 with former Senator Judd Gregg, (R-N.H.) and former Pennsylvania Governor Ed Rendell. Perhaps it was in response to this news that Paul Krugman wrote a post in September titled: “A Public Service Reminder: Simpson-Bowles Is Terrible”:

It mucks around with taxes, but is obsessed with lowering marginal rates despite a complete absence of evidence that this is important. It offers nothing on Medicare that isn’t already in the Affordable Care Act. And it raises the Social Security retirement age because life expectancy has risen – completely ignoring the fact that life expectancy has only gone up for the well-off and well-educated, while stagnating or even declining among the people who need the program most.

But never mind all that! Calmes is really only interested in telling you what a fun tag-team Bowles and Simpson make.

The two often mix substance and sarcasm. For instance, in a recent appearance on Bloomberg TV, Mr. Simpson turned to Mr. Bowles for the correct figure on Social Security’s negative cash flow, and then joked that if lawmakers could not compromise on that issue and others, ‘You should never be in a legislature, and you sure as hell should never get married.’

Bada bing, bada boom. Because the old battleax, you know…. Calmes relates another quip of Simpson’s about erectile dysfunction. Just awful stuff, though none as bad as Simpson’s most famous remark on his deficit-cutting plans, when he said of Social Security, “It’s like a milk cow with 310 million tits.”

Getting in to see the Simpson-Bowles Show doesn’t always come cheap. The gentlemen slashers speak for a fee, now up to $40,000 each per engagement, though “they often appear without a fee, including at colleges and city economic clubs.” Heartwarming. Simpson boasts to Calmes about his embrace of the “capitalistic system”: after the Simpson-Bowles report went down in flames, Simpson and Bowles “quickly raised money, including from Peter G. Peterson, the billionaire financier of antideficit efforts, to keep a small staff.” The two were instrumental in putting together the financing for “Fix the Debt,” a deceptive organization of CEOs who have – according to their Website – tricked more than 300,000 Americans into joining their effort to effect what they call “a common sense solution to prevent disaster and renew America’s economic strength.” Disaster!

Calmes does not so much as hint at Fix the Debt’s underlying goal – to lobby for tax breaks for corporations. The progressive Institute for Policy Studies describes Fix the Debt as “A Trojan Horse for Massive Corporate Tax Breaks.” The authors of the IPS report, Sarah Anderson and Scott Klinger, write that Simpson and Bowles’ “Fix the Debt campaign has raised $60 million and recruited more than 80 CEOs of America’s most powerful corporations to lobby for a debt deal that would reduce corporate taxes and shift costs onto the poor and elderly.” Among their key findings:

  • The 63 Fix the Debt companies that are publicly held stand to gain as much as $134 billion in windfalls if Congress approves one of their main proposals — a “territorial tax system.” Under this system, companies would not 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 thanks 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.

Paul Krugman writes that “Fix the Debt, is campaigning for cuts to Social Security and Medicare, even while making lower tax rates a ‘core principle.’ That last part makes no sense in terms of the group’s ostensible mission [of reducing the deficit], but makes perfect sense if you look at the array of big corporations, from Goldman Sachs to the UnitedHealth Group, that are involved in the effort and would benefit from tax cuts. Hey, sacrifice is for the little people.”

Wow! How does Calmes deal with all this? She never mentions it.

Calmes does mention “David M. Cote, the chief executive of Honeywell and a panel member.” She quotes his view that Simpson-Bowles “is the basis for all of this discussion [of the budget]” and that Bowles “has achieved a status like Sting or Bono” because people refer to him by his first name. Calmes doesn’t say so, but Cote is also a contributor to Fix the Debt. But he is best known as a union-buster “willing to risk nuclear fallout in order to demand that uranium workers agree to cutting their retiree health care and pension plans.” Is it any wonder that Simpson-Bowles proposes raising the retirement age to 69? You would never know from reading Calmes’ piece that Cote is anyone other than a pillar of the community who likes rock music of a certain era.

While it is true that few people know what-all the Simpson-Bowles plan entails, one person who does know is Barack Obama. Reportedly the “grand bargain” he attempted to strike with John Boehner last year was modeled on Simpson-Bowles. According to Calmes, “Last February, Mr. Obama was so irked by criticism that he had rejected Simpson-Bowles that he had Mr. Bowles to lunch to explain his long-term strategy for using the $4 trillion framework, if not all the details, to press Republicans to accept tax increases and Democrats to reduce entitlement spending.”

It gets worse. Robert Reich informs us President Obama has tapped Treasury Secretary Tim Geithner to lead the so-called fiscal cliff negotiations. Although Geithner is not wealthy (remember that Turbo Tim even did his own tax returns), Wall Street sees him as “Our Man in Washington.” He is a short-timer at Treasury who is surely looking to further pad his résumé in a manner pleasing to the Masters of the Universe whom he hopes to employ him next. As Calmes reports, “Mr. Bowles and corporate executives he helped recruit to a “Fix the Debt” campaign met privately at the White House with six senior administration officials, including Treasury Secretary Timothy F. Geithner.” None of this bodes well for the American people.

Critics have long faulted the Washington Post for putting Pete Peterson’s opinion on the front page and calling it news. Now the New York Times has done as much. It has used its front page to present Erskine Bowles and Alan Simpson as lovable old coots dedicated to solving the nation’s debt problem. Or deficit problem – Calmes uses the terms interchangeably. Calmes acknowledges in her lede that (whatever it is) it is “a most serious subject.” Yet throughout her piece, she makes light of the antics of these two geezers while never exposing the nature of their Machiavellian plan. Indeed, the New York Times seems to be doing its best to keep their secrets. Hiding what Simpson, Bowles and their gang of corporate backers actually propose is a shocking lapse of journalism. Perhaps Calmes’ piece could have a place in the “Style” section, but this lighthearted amusement masquerading as news has no business on the front page of the New York Times – especially at a time when Americans have a critical need to know what their leaders are planning.

Marie Burns blogs at RealityChex.com

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Readers Comments (2)

  1. Kate Madison says:

    AMEN sister! I detest these two phonies, Simpson and Bowles, and you have done an excellent expose. “Fix the Debt,” my ass. They are interested only in fixing their own portfolios.

    And who in the Hell is Jackie Calmes? And why is Ed Rendell a part of this effort. Talk about a phony! Ick.

     Reply
  2. carlyle says:

    There is no way out. First will come the grand bargain and then the pain. Every dollar in reduced federal expenditures represents part of a check sent to some poor soul or some small business or even some large business. Simple arithmetic says every dollar cut represents a dollar taken from the economy. A thriving economy can take a reduction in stride. With our stagnant economy, reducing federal state and local spending will push the US deep into a second recession.
    The solution to our economic problems is known but has no support. The public does not own any legislature. After the unrest and the truncheons, a desperate country may take the healing steps of refinancing America with a large minimum wage increase, taxes that represent Dr. Paul krugman’s preparation for an alien invasion and a restoration of the physical infrastructure of the country. The Government must become the employer of any American needing a job. We sneer at the European safety net but all those people live better lives than Americans. For some reason they can afford health care and social security for everyone and this exceptional nation cannot.

     Reply





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