Counterparties: Who is Fix the Debt?

By Ben Walsh
November 28, 2012

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America’s top CEOs agree on at least two things: America needs to do something about its debt and everyone needs to sacrifice. Under the auspices of the organization Fix the Debt, the (self-serving) CEOs of companies like Goldman Sachs, Honeywell, Microsoft and UPS have amassed a reported $43 million budget to convince Washington to avoid the fiscal cliff and to make broad cuts to bring down the national deficit.

The organization, which has Alan Simpson and Erskine Bowles as co-founders and policy gurus, says in its core principles that deficit-cutting policy should be enacted now, but implemented gradually. It’s also for reforming Medicare and Medicaid and “pro-growth tax reform, which broadens the base, lowers rates, raises revenue and reduces the debt”.

Fix the Debt’s website includes a set of “CEO Tools“, including a presentation that “you can leverage to communicate the debt story in a visual way”, and a sample letter to employees. Morgan Stanley’s James Gorman seems to have written his own version of that letter.

According to the WashPost’s Tom Hamburger, Fix the Debt has managed to displease both liberals and some business groups:

…at least three companies represented in Fix the Debt also belong to a separate coalition that has sought to cut corporate tax rates.

That agenda of cutting corporate taxes has drawn fire from some within the business community, especially small firms and partnerships that do not pay corporate taxes but instead pay taxes on business earnings according to individual income tax rates. These critics say that the chief executives in Fix the Debt are willing to see individual income tax rates rise – in particular, through the expiration of Bush era tax cuts for the wealthy at the end of year– because this could create flexibility in the federal budget for cutting corporate taxes during a tax reform effort proposed for next year.

There are also the familiar fingerprints of Pete Peterson, especially in the emphasis on cutting entitlements. Michael Hiltzik has called Peterson the most influential billionaire in US politics, and it’s easy to see why. Fix the Debt is project of the Committee for a Responsible Budget, which is, in part, funded by Peterson’s foundation. Many of the members of Fix the Debt’s coalition are similarly funded by Peterson and/or founded by his former employees. From 2007 to 2011, Ryan Grim and Paul Blumenthal report, Peterson has spent almost half a billion dollars of his own money crusading against the national debt. — Ryan McCarthy and Ben Walsh

On to today’s links:

Hackers
An identical copy of a US entrepreneur’s security software ended up being used across China – Bloomberg

Crisis Retro
Bank of America’s CEO apparently can’t remember anything – Matt Taibbi

Mysteries Explained
Poor management killed Hostess, not unions – LAT

Taxmageddon
Lloyd Blankfein compares CEO efforts on the fiscal cliff to WWII – Joe Weisenthal
Fix the Debt is more concerned with protecting the Bush tax cuts than reducing the long-term deficit - Next New Deal
People are paying $80,000 to hear Simpson and Bowles speak for some reason – NYT

Bond Vigilantes
A concise guide to Argentina’s possible default, angry hedge funds and “legal colonialism” – Steven Davidoff
Why Elliot vs. Argentina is a domestic Argentine issue – Felix

Leaders
Groupon’s board may be rethinking the value of the “youth and humor” of its CEO – WSJ

Cephalopods
What it was like to be a woman at Goldman Sachs – Atlantic

New Normal
Federal student loans are making it too easy to borrow too much – WSJ

Crisis Retro
Mozilo admits Countrywide’s subprime loans were a “continuous catastrophe” in a 2006 email – Scribd

Retractions
Nassim Taleb is rather fragile when it comes to parodies of Antifragile – Josh Brown

Investigations
SAC Capital gets its Wells Notice – Reuters

Wonks
The World Bank’s chief economist on inequality, taxation, and multi-player sudoku – Oxfam

Apple
“Something is wrong with my iPad: I still hate my life.” – McSweeney’s

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