One of the most hypocritical corporate PR campaigns in decades is advancing inside the beltway, attempting to convince the White House, Congress, and the American people that another cataclysmic economic crisis is around the corner that will destroy our economy unless urgent action is taken. Soon this astroturf supergroup may be coming to a state near you.
“We would not be here if it wasn’t for the Peterson Foundation and Pete Peterson. They laid the groundwork and we stand here on their shoulders.” – Fix the Debt Co-Founder Erskine Bowles
Today the Center for Media and Democracy launches a new wiki resources on the funding, leaders, partner groups and lobbyists of the Campaign to Fix the Debt, see it here at PetersonPyramid.org.
Move over David Koch and George Soros! The effort is being bankrolled by one of the wealthiest men in the nation. Peter G. Peterson made a fortune at the Blackstone Group on Wall Street. He conveniently cashed out with $2 billion shortly before the 2008 financial meltdown and now has pledged to spend $1 billion of that payout to convince Americans -- who overwhelmingly want to keep and strengthen Social Security and Medicare -- that these programs threaten our very existence as a nation.
His task is a tough one.
After Mitt Romney picked famed “deficit hawk” Paul Ryan for vice-president, the two barnstormed the country warning audiences that U.S. debt and deficits were like a “prairie fire” moving ever closer to our “homes and our children.” To save our kids from conflagration, America needed to rein-in out-of-control spending.
Voters sent the deficit scolds packing. Economists warned that austerity during an economic downturn was a recipe for disaster and polls consistently showed that jobs were America’s top priority with the deficit trailing well down the list.
To overcome this wall of opposition, Peterson needed a new strategy. For years, he had funded think tanks, seminars, national tours, town hall meetings, TV ad campaigns, college TV, school curricula, online media and even a motion picture -- all in an effort to convince America that deficits would one day sink the economy. Now Peterson needed something bigger and better than before -- and the Campaign to Fix the Debt was born.
Peterson rallied the crème de la crème of the 1% to his cause. Hiding their self-serving motives and wrapping themselves in patriotic language of “shared sacrifice,” 127 CEOs have signed up to his Campaign to Fix the Debt. Accompanied 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.
But this chorus of calamity was pure hype. One Fix the Debt steering committee member, former Tennessee governor Phil Bredesen, let slip that the strategy was to create an “artificial crisis” that would force Congress to act.
Their goal is to achieve a Simpson-Bowles style “grand bargain” on an austerity agenda for the United States by the nation’s 237th birthday on July 4, 2013.
But the Founding Fathers would be outraged at the shenanigans of these summer soldiers and phony patriots.
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.
Plus, Fix the Debt steering commitee members have extensive ties to corporations lobbying to preserve dozens of costly tax breaks (such as the "carried interest loophole" that made Pete Peterson a rich man) that are not disclosed in their Fix the Debt bios. (Click here to see a chart of these conflicts (PDF) and share it with your local news producers and reporters every time you spot a Fix the Debt talking head.)
The reality is that the nation’s budget deficit is not caused by overspending; it is largely due to the collapse of the $8 trillion housing bubble. But fear mongering over the deficit “is preventing us from giving the same boost to the economy that got us out of the Great Depression,” says economist Dean Baker.
The Center for Media and Democracy tracks the PR industry, front groups, and corporate spin. We launched the award-winning ALECexposed investigation in 2011. Rarely have we seen such a well-financed astroturf supergroup as Fix the Debt.