News Release

CEOs Pushing Austerity Enjoy Taxpayer-Subsidized Pay

Liz Rose — Thu, 02 May 2013 06:58:04 -0400

Washington, D.C. — Ordinary taxpayers are subsidizing exorbitant executive pay at the corporations leading the push for austerity in the budget debate, according to a new report by the Institute for Policy Studies and Campaign for America’s Future.

The report is the first to put a price tag on the tax breaks specific corporations have enjoyed from a loophole that allows unlimited deductions for executive stock options and other “performance-based” pay. It focuses on corporate members of Fix the Debt, a lobby group that is calling for “shared sacrifice” while quietly advocating for cuts to Social Security and more corporate tax breaks.

Among the key findings from the report ‘Fix the Debt’ CEOs Enjoy Taxpayer-Subsidized Pay:

• The 90 publicly held corporate members of the ‘Fix the Debt’ lobby group raked in at least $953 million — and as much as $1.6 billion — from the “performance pay” loophole between 2009-2011.

• UnitedHealth Group enjoyed the biggest taxpayer subsidy for its CEO pay largesse during this period. The nation’s largest HMO paid CEO Stephen Hemsley $199 million in total compensation, of which at least $194 million was fully deductible “performance pay.” That works out to a $68 million taxpayer subsidy – just for one individual CEO’s pay. A just-released proxy reveals that Hemsley pocketed another $28 million in “performance pay” in 2012, which computes into a tax break for UnitedHealth of nearly $10 million.

• Discovery Communications stood next in line for a government handout. CEO David Zaslav pocketed $114 million in total compensation, $105 million of this in exercised stock options and other fully deductible “performance pay.” That translates into a $37 million taxpayer subsidy.

• Caesars Entertainment has hemorrhaged money in recent years, driving CEO Gary Loveman’s stock options underwater. Despite his poor performance, Loveman has managed to take home $9.6 million in cash bonuses, generating taxpayer subsidies the firm can cash in to lower its taxes in years to come.

“These CEOs are raking in huge taxpayer-funded bonuses at the same exact time they’re insisting on deep cuts in the government programs that benefit ordinary Americans,” said Sarah Anderson, a report co-author and Global Economy Project Director at the Institute for Policy Studies.

“If Fix the Debt’s CEOs really wanted to fix the debt, they wouldn’t be lobbying for lower tax rates – even as they take advantage of tax loopholes that allow their companies to pay them incredibly lavishly,” said Roger Hickey, co-director of the Campaign for America’s Future. “This study shows that Fix the Debt’s CEOs have gotten huge tax breaks, which calls into question their legitimacy. Clearly they want austerity for hard working Americans, but no sacrifices at all for CEOs.”

The report is online: http://ourfuture.org/FixTheDebtCEOs

Institute for Policy Studies (IPS-DC.org) has conducted path-breaking research on executive compensation for 20 years. The 2012 edition of their annual Executive Excess report received significant media coverage, including in the Wall Street Journal and New York Times. IPS has also produced detailed analyses of the tax and executive retirement policies of Fix the Debt member corporations.

Why Obama’s Legacy Does Not Need a Grand Bargain

Liz Rose — Mon, 25 Mar 2013 09:43:31 -0400

Washington, DC -- Deficit hawks are pressuring President Obama to forge a "grand bargain" swapping retirement benefit cuts and tax increases, by claiming he needs the deal for his "legacy." But writing today in The Week, Campaign for America Future's Bill Scher shreds that argument. After reviewing the record of presidential budget deals over the decades, Scher concludes: "history yawns at budget deals" because "they don't stick" and they don't leave behind tangible accomplishments such as Medicare, or the interstate highway system.

Reagan's tax reform can barely be found in today's tax code. His Social Security reform was mere "tinkering" compared to FDR creating the pillar of retirement security. No one remembers that Eisenhower and LBJ left office with hard-fought surpluses. Like Bill Clinton's surplus, they didn't last.

Bill Scher is available for interviews. Here are some short excerpts of Scher's article, Why Obama’s Legacy Does Not Need a Grand Bargain:

"History yawns at budget deals."

...

"There is a reason why budget deals rarely merit legacy status: They don't stick. An accomplishment can't be a legacy if it isn't still around. We are still driving on Eisenhower's highways, vacationing in Teddy Roosevelt's national parks, and retiring on Franklin Roosevelt's Social Security and Lyndon Johnson's Medicare. We are still living in a freer world because Harry Truman had a plan to contain Communism and Reagan (through a stranger set of circumstances than most people realize) finished the job. We are still living in a fairer society because Teddy Roosevelt busted the trusts, Woodrow Wilson established the progressive income tax, and Franklin Roosevelt codified labor rights. We are still living in a diverse society because Truman desegregated the military, Eisenhower helped desegregate the schools, and Johnson broadly outlawed racial discrimination.

"But budget deals? They come and go."

...

"Presidential legacies are built on achievements that last. Major new programs. Grand public works projects. Equal rights advancements. Transformational foreign policy breakthroughs. Obama has already pocketed a number of these. Creating ObamaCare. Repealing Don't Ask Don't Tell. Bagging bin Laden.

"No doubt, he wants more. He's close on landmark immigration reform. He's farther away on climate — an actual imminent crisis — though it's clearly in his sights. But a grand budget deal? In Obama's own words to ABC News, if he doesn't get one, "that won't create a crisis. It just means that we will have missed an opportunity."
Obama may want it. He may even get it. But he knows he doesn't need it."

Bill Scher’s entire article is available online: http://theweek.com/article/index/241752/why-obamas-legacy-doesnt-need-a-grand-bargain

Repeal the Sequester; Don’t Postpone it

Liz Rose — Tue, 05 Feb 2013 14:21:22 -0500

Washington, DC –After President Obama called on Congress to postpone the deep across the board spending cuts set to kick in on March 1 in the so-called sequester, Campaign for America’s Future co-director Robert Borosage said, “The sequester irresponsibly will cost over one million jobs and impede an already faltering recovery. It should be repealed, not postponed. Congress should turn its attention to jobs and growth, not to more austerity.”

“The entire debate is upside down. America has a jobs crisis, not a budget crisis. The deficit is not out of control; it is already down 25 percent in relation to the economy, and falling faster than anytime since the demobilization at the end of World War II. The across the board cuts of the sequester are a ridiculous way to approach a budget. We need to fix the economy, not fix the debt. And you can’t fix the economy by focusing on fixing the debt. It is time to invest in America’s future, not strangle the weak recovery we now have,” said Borosage

The Campaign for America’s Future applaud the Congressional Progressive Caucus for calling for repeal of the sequester. CAF is calling on its supporters to sign a petition urging its repeal.

Jobs Numbers Demonstrate Economy Needs Action to Spur Growth, Not Austerity

Isaiah J. Poole — Fri, 01 Feb 2013 10:00:16 -0500

Washington, D.C. -- Today’s report that the U.S. economy added 157,000 jobs in January is welcome news that the American economy has not sunk into recession, as many European countries have. But Roger Hickey of the Campaign for America’s Future warned that the austerity policies that have pushed unemployment upward in those countries are now scheduled to be imposed on the U.S. if Republicans insist on letting the sequestration cuts go into effect – and if they continue to threaten to crash the economy by failing to lift the debt ceiling.

“Republicans are repeatedly playing dangerous games with the U.S. economy, scaring investors and consumers alike, when we need much higher levels of investment and jobs growth if we are ever going to go beyond employing new entrants into the labor force and create opportunities for the millions of Americans still looking for work,” said Hickey.

The slight uptick in the unemployment rate, to 7.9 percent, may be an indication that some discouraged workers, who had given up on finding employment, are now once again looking for jobs. “We should be taking steps to create jobs, so those workers can find opportunities, not imposing European-style austerity, as is now scheduled in coming weeks,” said Hickey.

Hickey noted that the January jobs report shows manufacturing jobs were virtually unchanged since July 2012, an indication that low domestic demand, combined with economic troubles in Europe and China, continues to cripple markets for American manufacturing output, reducing hiring.

The U.S. needs public investment in infrastructure, aid to states to stem continuing layoffs in the public sector, and other steps to help hard-pressed consumers. Instead, Hickey noted, since January most working-class Americans have lost the payroll tax cuts that helped to sustain the recovery by putting more purchasing power into the economy.

Hickey called for an end to austerity and for new job-creation measures. As Congress moves toward a debate over the federal debt limit, Hickey noted that his Campaign for America’s Future, along with 96 other national organizations, are urging President Obama to 1) insist on policies that create jobs; 2) oppose benefit cuts for Social Security, Medicare, and Medicaid; 3) protect our nation’s safety net; and 4) ensure adequate revenues to preserve the basic functions of government.

Jobs Report is Not a Clear Marker: The Economy is Not Ready for Austerity

Liz Rose — Fri, 07 Dec 2012 08:23:36 -0500

Washington, DC -- “Buffeted by Sandy, an early Thanksgiving, and the Washington fiscal showdown, the unemployment rate is down to 7.7 percent with 146,000 added jobs in November according to the Bureau of Labor Statistics, which is much better than expected but hardly a clear marker,” said Robert L. Borosage, co-director of the Campaign for America’s Future.

Statement from Robert L. Borosage:

“The economy still faces fierce headwinds – tightening austerity at the federal level, recession in Europe, slower growth in India and China. There is no sign of the robust levels of growth that would produce the jobs we need for the more than 20 million people in need of full-time work. Mass, long-term unemployment is continuing. That means stagnant or falling wages, spreading misery, jobless young people, inadequate demand and a recovery that will continue to falter, if it continues at all.

“The high drama Washington fiscal cliff negotiations get it wrong. You can’t fix the debt, as the lavishly funded CEO lobby suggests, by focusing on deficits. You have to fix the economy. Fixing the economy will fix the debt. And that requires bold steps now to put people to work by making investments that are vital to strengthening our economy. With interest rates near record lows, we should be launching a major initiative to rebuild our failing and costly infrastructure. The president has called for a modest effort in this record -- $50 billion for an infrastructure bank – as well as extending the more effective stimulus measures – extended unemployment insurance and the payroll tax cut. Republicans dismiss these out of hand. This gridlock on jobs is the least reported and most important aspect of the fiscal showdown. With no action on jobs, the debate is simply over how much austerity will be inflicted on a weak economy, and who will pay the costs upfront. If the economy slows, working families will continue to pay the price, no matter what is in the agreement."

350 Economists Warn President and Congress: Bad “Grand Bargain” on Deficits Could Kill Recovery.

Liz Rose — Wed, 14 Nov 2012 12:31:43 -0500

Washington, DC – 350 prominent economists issued a statement on Wednesday warning that “the fragile recovery is threatened by obsessive concern with cutting deficits that has infected both parties.” The economists from universities and research groups across the U.S. and the world reminded politicians that the U.S. economy in the post-election period is still “marked by mass unemployment, rising poverty, and declining wages.” And they warned that big spending cuts aimed at reducing deficits could throw the economy back into recession.

Their statement, called Jobs and Growth, Not Austerity, was written by Robert Borosage and Roger Hickey, co-directors of the Institute for America’s Future and by Robert Kuttner, founder of The American Prospect.

The statement and signers can be found at jobsnotausterity.org.

In their statement, the economists hold up the cautionary example of European countries that have in plunged themselves into recession as a result of misguided policies aimed at reducing deficits: The economists declare, “As Great Britain, Ireland, Spain and Greece have shown, inflicting austerity on a weak economy leads to deeper recession, rising unemployment and increasing misery.”

Conservative and corporate leaders, having gotten Congress to legislate the threat of draconian spending cuts and tax increases known as “sequestration,” are now insisting that the only way to avoid this so-called “fiscal cliff” is to institute a “grand bargain” of unpopular spending cuts, benefit cuts in Social Security, Medicare and Medicaid -- and tax cuts for the rich -- that conservatives have been trying to win for decades. But the economists releasing today’s statement caution that the elements of a bad “grand bargain” could have such a contractionary impact on the still-fragile economy that the US could sink like the European nations into another serious recession and a decade of high unemployment.

AUDIO

Listen to a press conference on the economists' statement on jobs and growth.

At a press conference today introduced by Borosage, the Jobs, Not Austerity statement was released with remarks by two of the signers, Robert Pollin, University of Massachusetts Economist and co-director of Political Economy Research Institute (PERI) and Teresa Ghilarducci, Director of the Schwartz Center for Economic Policy Analysis at the The New School.

Borosage said “the voters in this election told politicians exactly what these economists are saying: getting the economy growing and creating jobs is far more important than cutting deficits in this still-weak recovery. But we are also reminding the self-styled ‘deficit hawks’ that, as the statement declares, `If you cut spending and consumer purchasing power in an already depressed economy, unemployment rises and revenues fall — and the goal of a smaller deficit keeps receding like a mirage in a desert. When private purchasing power is depressed by the aftermath of a financial collapse, only public investment can make up the gap.’“

Teresa Ghilarducci said, "The debt burden is not the number `out of whack.’ At 7.9 percent the unemployment rate is extremely high for this point in a recovery. The high deficits are driven by the long drawn out recession. The deficits will fall when the unemployment rate falls.

The Fed is doing all it can, we need more fiscal stimulus now, targeted on extending the emergency unemployment insurance, aiding state and local governments to stave off layoffs and to take advantage of low interest rates to fix roads, energy, and water infrastructure. Government spending during times of low inflation and high rates of unemployment pays for itself -- spending now creates demand so that the private sector has a reason to produce."

And Robert Pollin, author of the recent book Back to Full Employment (MIT Press) said, “With the U.S. still suffering from the worst sustained unemployment conditions since the 1930s Depression, our first priority has to be job creation. This will provide the greatest benefits to families, communities, as well as businesses who are waiting to see their local markets grow. Pushing unemployment down is also the single most effective way of reducing the fiscal deficit, since people with jobs pay more taxes and require less social assistance. Pursuing an austerity agenda now will threaten to reverse even the modest gains in employment we have experienced since the depths of the Great Recession. Austerity is exactly what we do not need now.”

Media Advisory: 350 Economists Will Warn Obama and Congress:

Liz Rose — Mon, 12 Nov 2012 15:42:40 -0500

Washington, DC --Warning that the U.S. economy in the post-election period is still “marked by mass unemployment, rising poverty, and declining wages.” 350 prominent economists will issue a statement on Wednesday, Nov 14 warning, “the fragile recovery is threatened by obsessive concern with cutting deficits that has infected both parties.”

The economists’ statement will highlight that drastic spending cuts adopted in a “grand bargain” aimed at avoiding sequestration could have such a contractionary impact on the still-fragile economy that the U.S. could join European countries in plunging into recession as a result of misguided austerity policies.

Telephone media conference: Wednesday, Nov. 14 , 2012 1 p.m. (ET )
Dial in for media: 1-800-311-9401 Code: CafCall

Speakers:
Robert Borosage, Campaign for America’s Future, co-director.
Robert Pollin, University of Massachusetts, Economist and co-director of Political Economy Research Institute (PERI)
Teresa Ghirarducci, Director of the Schwartz Center for Economic Policy Analysis at the The New School

Campaign for America’s Future co-director Roger Hickey and Robert Kuttner, founder of The American Prospect, who helped write and circulate the economists’ statement, will be on the call to answer questions.

The 350 economists are from universities and research groups in the US and around the world.

New Report Shows Rep. Tim Johnson Votes Against the Middle Class 80 Percent of the Time

Liz Rose — Tue, 09 Oct 2012 12:20:29 -0400

Washington, DC – According to a new Middle Class Voter Guide from the Campaign for America’s Future, Rep. Tim Johnson is considered one of the “worst of the worst” because he votes for the middle class only 20 percent of the time.

The new Middle Class Voter Guide was created to hold lawmakers accountable for their votes in Congress on the most important bills that would have helped or hurt the middle class.

Robert Borosage, co-director of the Campaign for America’s Future said, “Every legislator claims to be a champion of the middle class – yet in vote after vote, the big corporations and the wealthy get the gold, and the interests of the middle class get the shaft. For too long, voters had no way of knowing who stands at their side and who sits on their backs.”

The Campaign for America’s Future rated every legislator on the basis of his or her votes on 10 key bills in the House and in the Senate that had the greatest impact on the middle class.
Campaign for America’s Future is buying Google ads aimed at 10 “worst of the worst” incumbent Representatives whose fate in November may determine control of Congress. Rep. Tim Johnson is on the top ten target list. Constituents who use Google to find information about Rep. Tim Johnson will learn of his "20 percent" score and will be encouraged to click a link and learn more about his legislative record.

The Middle Class Voter Guide is available online: www.themiddleclass.org/voterguide

Rep. Tim Johnson’s rating is available here: http://themiddleclass.org/voterguide/index.php?member_id=100

Any Notion of a “Grand Bargain” Must Begin with Action on Jobs

Liz Rose — Fri, 07 Sep 2012 08:12:06 -0400

Washington, DC – Today’s disappointing jobs numbers show, “Any notion of a `grand bargain’ must begin with action on jobs,” said Robert Borosage, co-director of the Campaign for America’s Future.

Statement from Robert L. Borosage:

“The August job numbers -- a disappointing 96,000 net new jobs for the month – only reinforce the need for greater action on jobs. At this rate, new job creation is not sufficient to cover the people coming into the jobs market.

“Worse, the economy faces severe hurdles ahead. Manufacturing employment is down, and the deepening recession in Europe and downturn in China and elsewhere are only beginning to be felt. Government employment is down, and the cuts at the federal level have only begun to be made. Worse, Washington is headed into a jobs cliff after the election, with the impending negotiations over the sequester and the scheduled expiration of extended unemployment insurance, the payroll tax cut, and the Bush tax cuts.

“Any notion of a `grand bargain’ must begin with action on jobs. Putting people to work is the first and necessary step to deficit reduction. Europe’s growing miseries provide clear warning of the folly of inflicting austerity on an economy scarred by mass unemployment.

“The election campaign makes action unlikely. But when it convenes this month, Congress would be well advised to take up the Obama jobs bill, and to take bold steps to put people back to work.”

New Polling: Dems Can Win with a Bold Economic Agenda

Liz Rose — Tue, 04 Sep 2012 12:41:18 -0400

Washington, DC – New polling for the Campaign for America’s Future by Lake Research suggests that the President and Democrats would be wise to trumpet a bold agenda on the economy that contrasts sharply with Romney’s failed trickle down notions.

The Campaign for America’s Future and Lake Research tested several bold themes against the Republican message, described with their own best rhetoric charge. Each trumped the Republican message even at a time when Romney is beating the president on the economy.

The memo from Lake Research summarizes the research. It suggests that a populist message, combining an aggressive economic frame with proposals designed to rebuild the middle class provides a strong ground from which to wage this debate.

Robert Borosage, the co-director of Campaign for America’s Future writes, “The Obama campaign has focused, sensibly and successfully, on defining Mitt Romney and his agenda. `I’m the man from Bain and I’m here to fix things’ increasingly strikes terror in the heart of working families. The medicine Romney’s peddling is more of what ails us.”

But, Borosage writes, “Obama can’t sell this economy as successful, nor claim credibly that we are on the right track. He needs to point a clear way forward.”

Article by Campaign for America’s Future’s Robert Borosage: New Polling: Obama's Challenge: Answer the Question of What Comes Next is available online: http://www.ourfuture.org/blog-entry/2012093604/obamas-challenge-answer-question-what-comes-next

The Lake polling memo is available online: http://www.scribd.com/doc/104876829/9-3-lake-memo

The Campaign for America's Future (CAF) is a center for ideas and action that works to build an enduring majority for progressive change. The Campaign advances a progressive economic agenda and a vision of the future that works for the many, not simply the few. The Campaign is leading the fight for America's priorities – for good jobs and a sustainable economy, and for strengthening the safety net.

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