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Bill McKibben, Schumann Distinguished Scholar at Middlebury College and author of a dozen books about the environment, beginning with "The End of Nature" in 1989, which is regarded as the first book for a general audience on climate change. The group he founded, 350.org, has coordinated 15,000 rallies in 189 countries since 2009. The Boston Globe said in 2010 that he was "probably the country’s most important environmentalist."
Alexis Tsipras, a member of the Hellenic parliament, president of the Synaspismos political party since 2008, head of the SYRIZA parliamentary group since 2009, and leader of the Opposition since June 2012. SYRIZA currently leads in Greek opinion polls. Listen to the audio here.
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"Nov. 22, 1963: A Turning Point for America," by Reginald Johnson, Nov. 22, 2013
"Demanding Action on Fukushima," by Reginald Johnson, Nov. 18, 2013
"Fukushima -- A Global Threat," by Reginald Johnson, Nov. 4, 2013
"Impeach Obama," by Reginald Johnson, Sept. 5, 2013
"America Attacks Again," by Reginald Johnson, Aug. 28, 2013
"Keeping WBAI Alive," by Reginald Johnson, Aug. 21, 2013
"WBAI in Crisis," by Reginald Johnson, July 25, 2013
"Restore the Fourth!" by Reginald Johnson, July 10, 2013
"Sustainable Business Models: A Third of All States Have Benefit Corporation Laws," by Anna Manzo, June 30, 2013
"Making War on Syria," by Reginald Johnson, June 14, 2013
"Syria in the Gunsights," by Reginald Johnson, May 9, 2013
"Curbing Gun Violence," by Reginald Johnson, April 4, 2013
"Fighting the Pipeline," by Reginald Johnson, March 26, 2013
"Downgrading Ed Schultz," by Reginald Johnson, March 17, 2013
"Rand Paul: Making a Point," by Reginald Johnson, March 8, 2013
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Posted May 8, 2013
Interview with Sarah Anderson, Institute for Policy Studies' Global Economy project director, conducted by Scott Harris. Transcript provided by Evan Bieder.
Since late in 2012, a group known as Fix the Debt Campaign, led by private equity billionaire Pete Peterson, has advocated for deep cuts in the federal budget while protecting tax breaks for corporations and the rich. Among the targets of the $60 million campaign, are Social Security, Medicare and Medicaid. While the objectives of the corporate-backed campaign have not yet succeeded, the group has exerted influence on the national debate where Congressional budget negotiations are focused on the Republican and conservative austerity agenda of slashing popular social safety net programs.
Now a new report titled, "‘Fix the Debt’ CEOs Enjoy Taxpayer-Subsidized Pay,” just released by the Institute for Policy Studies and the Campaign for America's Future, finds that Fix The Debt CEOs are pocketing massive taxpayer subsidies at the same time they're advocating deep cut in government programs that benefit ordinary citizens.
The report details how during the three-year period 2009 to 2011, the 90 publicly held corporate members of “Fix the Debt” paid their top CEOs $6.3 billion, of which taxpayers footed the bill through subsidies for $953 million to as much as $1.6 billion of these compensation packages. Between The Lines’ Scott Harris spoke with the report’s co-author Sarah Anderson, IPS Global Economy project director. Here Anderson explains why she believes Fix the Debt’s members' conduct in taking massive taxpayer subsidies, should undercut the credibility of their campaign calling for deep budget cuts that demand sacrifice from average Americans.
SARAH ANDERSON: Well, I should probably first explain what Fix the Debt is. So, this is this corporate lobby group that came together last fall to try to influence the whole debate around the so-called fiscal cliff. And we took notice of them right away and saw that they needed a lot of scrutiny because they're a very heavily funded group. They said their initial budget was $60 million; they've recruited big name CEOs from large U.S. companies and they project an image of patriotism and shared sacrifice; they're just really in this budget debate because they want to act responsibly and make sure our nation's economy is safe and sound. But when you look at the details of what they're actually promoting, it's disturbing. They're pushing for cuts to Social Security and Medicare, and when you look at their tax proposals, they're all about getting more tax breaks for large corporations like the ones they run.
We've done a series of studies scrutinizing Fix the Debt, who they are and what they're calling for. This latest one looks at their executive pay practices and points out that ordinary taxpayers are actually subsidizing CEO pay at big companies like the ones that are leading the Fix the Debt campaign. And that's because companies can deduct an unlimited amount from their income taxes for executive pay as long as it's performance based. So all of the stock options, and performance bonuses and stock that are shoveled into the pockets of these big CEOs are fully deductible, creating this perverse incentive. What it means is that the more these corporations pay their CEOs, the lower their tax burden. And that just contributes to our national debt.
BETWEEN THE LINES: Sarah, give us the overall picture of how these large corporations that are part of the Fix the Debt coalition wanting to suffocate a lot of other government programs, use tax loopholes and a lot of high-priced accountants to prevent the government from taxing CEO pay.
SARAH ANDERSON: Yes. So under the U.S. tax code, you're only supposed to be able to deduct from corporate income taxes a million dollars per executive for executive pay. Beyond that, it's considered not a reasonable business expense. The problem is there's this huge loophole so that you can deduct unlimited amounts as long as the pay is performance-based. And so, when they made that tax reform, it opened the door for massive payouts of stock options and performance bonuses, anything they could call "performance-based" then was fully deductible. And it's really part of the reason why we've seen this explosion of CEO pay in the past couple of decades.
The people in Fix the Debt are probably no worse at taking advantage of this loophole than many other big Fortune 500 companies, but let me just give a couple of examples. The guy who got the most in performance pay that was fully deductible in the period we were looking at was the CEO of UnitedHealth group. They're the biggest HMO in the country and their CEO, Stephen Hemsley took in about $194 million in performance pay in the years 2009-2011. And that works out to be about a $68 million tax break for UnitedHealth Group and that is just for one individual CEO's pay.
It is outrageous particularly because these guys are out there telling the rest of us that we need to "tighten our belts," we really need to "cut back" on earned benefit programs like Social Security and Medicare programs that many people rely on very heavily. And yet, they haven't taken a look at the many ways that the corporations that they're running have been contributing to the deficit by taking advantage of these outrageous loopholes. If they were really serious about dealing with the deficit, they would be looking for these loopholes to be closed.
BETWEEN THE LINES: As you look at fixing this loophole, what kinds of congressional action would be necessary to prevent these companies from having taxpayers subsidize what many would label as obscene CEO pay by some of these major corporations?
SARAH ANDERSON: Well, it’s a very simple fix. As I mentioned, there is a cap on the deductibility of payments that companies make for executive compensation. It’s set at $1 million, except there’s this huge loophole for performance pay. If we got rid of that loophole, that would at least be one step towards ensuring that ordinary taxpayers are not subsidizing this runaway CEO pay. Congresswoman Barbara Lee has a bill on the House side that’s even better than that. It would lower the cap to $500,000 and do away with the performance pay loophole. That’s one reform that I think is just a total no-brainer. You’d get much bigger numbers in terms of increased corporate revenues if you went after some of the other loopholes like the ones that have been encouraging the use of tax havens. There you’re talking about really mind-boggling amounts of money; I think something like $100 billion a year, every year. That’s another big front in the corporate tax reform that should be getting a lot more attention.
For more information on the Global Economy project with the Institute for Policy Studies, visit ips-dc.org/globaleconomy.