Stacking the Deck: The Phony ‘Fix the Debt’ Campaign

Stacking the Deck: The Phony ‘Fix the Debt’ Campaign

Stacking the Deck: The Phony ‘Fix the Debt’ Campaign

Pete Peterson’s $60 million push to sell corporate America’s ruthless austerity agenda.


Reuters/Mark Blinch

The least controversial lines in President Obama’s State of the Union address should have been his assertions that “deficit reduction alone is not an economic plan” and that “we can’t just cut our way to prosperity.” Common sense, right? Wrong—if you’re getting your economic analysis from the GOP, more than a few Democrats and much of the media. Even Obama, in the same speech, paid homage to the safety-net-shredding strategies of the Simpson-Bowles deficit-reduction commission. As Paul Krugman reminds us, “Inside the Beltway Simpson and Bowles have become sacred figures. But the people doing that elevation are the same people who told us that Paul Ryan was the answer to our fiscal prayers.”

Who does that elevating? Meet the Campaign to Fix the Debt, the billionaire-funded project that uses Alan Simpson and Erskine Bowles as figureheads for a fearmongering campaign to convince Americans that the deficits the United States has run throughout its history have suddenly metastasized into “a cancer that will destroy this country from within.” It is the latest incarnation of Wall Street mogul Pete Peterson’s long campaign to get Congress and the White House to cut Social Security, Medicare and Medicaid while providing tax breaks for corporations and the wealthy.

Peterson has poured an estimated half-billion dollars into schemes so unpopular, so economically unsound and so obviously self-serving that even conservative politicians run from them, as the implosion of the Simpson-Bowles commission illustrates. So Peterson has repurposed his project into what Institute for Policy Studies (IPS) Global Economy Project director Sarah Anderson calls “a Trojan horse” for “filthy rich tax-dodging hypocrites.” With a stable of CEOs, Peterson timed the launch of this new $60 million campaign to exploit the wrangling over the fiscal cliff, the debt ceiling and the sequester. Fix the Debt has signed up prominent Democrats and Republicans as spokespeople (many of whom have undisclosed financial ties to firms that lobby on deficit-related issues) and launched “astroturf” campaigns to create the fantasy that young people and seniors are concerned enough about debts and deficits to support Peterson’s austerity agenda.

Quite a few of those CEOs head firms that pay a negative tax rate, like Honeywell, GE, Boeing and Verizon. And as the Public Accountability Initiative notes, many lobby to preserve costly tax breaks for the wealthy (including the “carried interest” tax loophole that made Peterson a rich man) and to prevent a tax on Wall Street speculation. Fix the Debt–tied firms are even pushing for a “territorial tax system” that will increase the debt by $1 trillion over ten years and encourage the offshoring of American jobs. Why would supposed debt slayers favor this boondoggle? Because, IPS calculates, at least sixty-three Fix the Debt firms would divvy up a $134 billion windfall.

As Fix the Debt ramps up its campaign and seeks any opening in this period of fiscal fighting, progressives must fight back. That’s why The Nation and the Center for Media and Democracy—which collaborated on the award-winning ALEC Exposed 
project—are focusing on Peterson and his austerity project with this series of articles. Their publication coincides with the launch of an indispensable new resource on CMD’s The goal: to expose Fix the Debt, its architects and its bankrupt economics before this cynical campaign “fixes” American fiscal policy, making the 99 percent pay to make the wealthiest 1 percent a whole lot wealthier.

In This Forum

John Nichols: “The Austerity Agenda: An Electoral Loser

Lisa Graves: “Pete Peterson’s Long History of Deficit Scaremongering

Mary Bottari: “Pete Peterson’s Puppet Populists

Dean Baker: “Fix the Debt’s Fuzzy Math

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