Americans do not want cuts to Social Security and Medicare. Polls also show a strong majority opposes lowering corporate taxes.
So what’s a lobbyist on the other side of these issues to do? Why, hire a good PR spinmeister, of course.
George Orwell would be particularly impressed by the doublespeak in statements issued by two giant corporate lobby groups on the current budget debate.
The Business Roundtable, a club for about 200 of America’s most powerful CEOs, calls for “modernizing Medicare and Social Security.” Gosh, that sounds good. Who doesn’t want to keep up with the times? Similarly, the Fix the Debt campaign, led by 135 CEOs of big companies, urges our leaders to “strengthen health and retirement programs for future retirees and generations” and “save Social Security.” Our nation’s retirement program is wildly popular. Who wouldn’t want it to not only survive but be even stronger? What’s needed here, though, is a budget debate decoder.
When these CEOs talk about “modernizing” and “strengthening,” they mean slashing benefits. For the details of their draconian Social Security and Medicare plans, you need to wade through the Business Roundtable’s January 2013 policy paper.
For example, they want to increase the retirement age to 70 (which would be the world’s highest) and replace the current measure of inflation used to set annual cost-of-living adjustments. The controversial proposed measure, called “chained CPI,” would gradually shrink Social Security checks so that after 20 years, recipients would be getting about $100 a month less than with the current measure.
The CEOs who are leading the charge for cuts to Social Security and Medicare have virtually no personal stake in this debate. According to a new report by my organization, the Institute for Policy Studies, and the Center for Effective Government, Business Roundtable CEOs have retirement accounts worth $14.5 million on average. That’s more than 1,200 times as much as the $12,000 median retirement savings of U.S. workers near retirement age.
A sensible way to shore up the retirement system would be to eliminate the cap on wages subject to Social Security taxes. Right now just the first $113,700 of a person’s income is subject to the tax. That means the CEOs of the Business Roundtable and Fix the Debt (many of whom are in both groups) pay in just a tiny percentage of their megamillion-dollar pay packages, compared to ordinary workers.
The doublespeak continues on corporate taxes. A recent Gallup poll shows 66 percent of Americans feel corporations pay “too little” in taxes. What’s the corporate spinmeister response? First, they try to confuse people by saying our 35 percent corporate tax rate is one of the highest in the world. In reality, big U.S. businesses are so good at dodging the IRS that we have one of the lowest “effective” corporate tax rates. The Congressional Budget Office found that large corporations pay just 12.6 percent of their U.S. income in federal income taxes.
Second, the spinmeisters avoid saying they want lower corporate tax rates. For both the Business Roundtable and Fix the Debt, the preferred slogan is “pro-growth” tax reform. This is code for cutting rates, based on the unfounded theory that businesses will automatically pour their tax savings into productive investment. The Congressional Research Service found that a rate cut from 35 percent to 25 percent would dramatically reduce revenue but have no significant impact on U.S. jobs.
Don’t be fooled by the self-interested doublespeak of big business CEOs. This is the wealthiest nation on Earth. If we all contribute our fair share, we can ensure a sustainable and healthy economy for future generations — and a dignified retirement for all.