Web Only// Features » December 4, 2012
How To Make Money Off the U.S. Debt (If Your Name Is Simpson or Bowles)
For $40,000, the failed commission leaders will tell you we should funnel middle-class retirement funds to rich CEOs.
For Simpson's 18 years in the Senate, U.S. taxpayers are giving him a pension of between $41,000 and $55,000 a year, which is two to three times more generous than a middle-class person would get in the private sector, if the worker were lucky enough to receive that now-rare benefit.
The nation’s debt is a good deal for Alan Simpson and Erskine Bowles, the leaders of the failed deficit commission. The two are profiting personally by urging fat cats and CEOs to support their two-year-old, already-interred deficit reduction plan.
Simpson, a former Republican Senator, and Bowles, a Morgan Stanley director, charge $40,000 a pop to promote their rejected scheme to fix the debt by slashing Social Security, Medicare and other programs for the middle class. That means every time they speak, Simpson and Bowles each pocket more than 2.5 times the $15,000 that a typical senior citizen gets from Social Security in an entire year.
The Simpson-Bowles personal profit tour reveals that for them, for their creation–the speciously labeled Campaign to Fix the Debt–and for the CEOs, right-wing groups and Republicans rallying round them, the effort has nothing to do with deficits or fixing anything. For them, it’s all about personal profit. And if their personal gain costs the vast middle class any sense of retirement security after a lifetime of paying into these earned benefit programs, well Simpson-Bowles & Co. are just fine with that.
Simpson is the avatar for those wailing, “fix the debt,” while demanding special deals for themselves. In 1996 as a Senator needing support from senior citizens, Simpson offered an amendment noting that 60 percent of them depended on Social Security for at least half of their income. It specified:
Social Security beneficiaries throughout the nation deserve to be reassured that their benefits will not be subject to cuts and their Social Security payroll taxes will not be increased as a result of legislation to implement a balanced budget amendment.
Now, when he’s a shill bagging $40,000 a speech from business groups and CEOs, he calls Social Security recipients “greedy geezers,” and scorns the program cherished by the middle class, calling it “a milk cow with 310 million tits.”
Easy for Simpson to say. For his 18 years in the Senate, U.S. taxpayers are giving him a pension of between $41,000 and $55,000 a year, which is two to three times more generous than a middle-class person would get in the private sector, if the worker were lucky enough to receive that now-rare benefit.
The CEOs Simpson and Bowles lined up to front their bogus Campaign to Fix the Debt exhibit the same behavior. An examination by the Institute for Policy Studies found that the 71 CEOs of public companies endorsing the campaign have set aside for themselves an average of $9 million in retirement funds from their corporations. That would pay each $110,000 a month for life after age 65.
These CEOs are careless, however, about their workers’ retirements. Forty-one promise pensions to workers, but only two corporations have sufficient assets to meet those obligations. The remaining 39 carry a combined pension deficit of $103 billion.
These CEOs, the very ones who’ve accumulated those massive deficits, are telling the federal government how to solve its budget problems. Right.
These CEOs take care of their own retirements, shortchange their workers’ pensions, then demand that the federal government cut Social Security and Medicare, the only other retirement programs for the middle class. These earned benefit programs are lifesavers to the 27 percent of Americans have no pension and no retirement savings at all.
But that’s not all, folks! These CEOs want their Bush tax cuts for the rich preserved as well as new breaks for their corporations. In an earlier study of the Fix-the-Debt corporations, the Institute for Policy Studies found the publicly held companies – at that time 63 – stood to gain $134 billion if Congress approved their demand for a territorial tax system exempting offshore profits from American taxes.
Prolonging tax cuts for the rich and creating a new tax loophole for corporations that offshore jobs would, of course, increase the debt.
Goldman Sachs, whose CEO Lloyd Blankfein is a platinum card member of the bogus Fix the Debt group, would pocket $3.3 billion under a territorial tax system. Yeah, Lloyd’s for that. Meanwhile, he insists America “lower people’s expectations” about their social safety net programs.
Blankfein joined Simpson and Bowles last week in blitzing the media with demands that the middle class suffer so the rich and corporations can keep – and enhance – their special deals. This CEO whose Wall Street Bank helped crash the economy and cost taxpayers billions in bailouts, said in a Nov. 19 interview on CBS News:
The retirement age has to be changed. Maybe some of the benefits have to be affected. Maybe some of the inflation adjustments have to be revised. But in general, entitlements have to be slowed down and contained.
That is the prescription for the middle class, earning a median $50,000 a year, from a man who pulled down $16.1 million last year and whose bank contributed massively to the federal deficits with its reckless financial gambling.
For him, for Simpson and Bowles, for the CEOs who have ponied up $60 million to bankroll the bogus Campaign to Fix the Debt, the bottom line is personal profit. They don’t give a damn about the debt. They don’t give a damn about the United States. They really don’t give a damn about the middle class. It’s not the Simpson-Bowles Campaign to Fix the Debt; it’s the Simpson-Bowles & Co. Campaign to Rig the Debt for the rich. And those slick hucksters Simpson and Bowles will make a buck on it win or lose.
Full disclosure: The United Steelworkers union is a sponsor of In These Times.
ABOUT THIS AUTHOR
Leo Gerard is the president of the United Steelworkers International union, part of the AFL-CIO. Gerard, the second Canadian to lead the union, started working at Inco's nickel smelter in Sudbury, Ontario at age 18. For more information about Gerard, visit usw.org.