To the extent that the United States has a real fiscal crisis, it has been exacerbated by aggressive tax avoidance on the part of big business. Now the chief executives of many of those same giant corporations are inserting themselves at the center of the current fiscal cliff debate, claiming they know what is best for the country.
The Campaign to Fix the Debt, whose “CEO Fiscal Leadership Council” now has more than 100 members from the corporate elite, is not, of course, proposing that the Fortune 500 start paying its fair share of federal taxes. In fact, the group is pursuing an agenda that may very well result in their companies’ paying even less to Uncle Sam.
As the Institute for Policy Studies has pointed out, companies represented in Fix the Debt stand to save tens of billions of dollars from the territorial tax system the campaign seems to be promoting. IPS has also shown the hypocrisy in the fact that the Fix the Debt CEOs calling for “reforms” in Social Security have fat personal retirement assets from their companies, while many of those firms are underfunding their employee pension plans.
There are numerous other ways in which the companies represented in Fix the Debt are far from honest brokers in dealing with the fiscal cliff—and in actuality engage in practices that exacerbate the country’s fiscal and economic problems.
Take the fact that among those companies are some of the most anti-union employers in the United States, beginning with Honeywell, whose CEO David Cote is on the steering committee of Fix the Debt and is one of its main spokespeople. After members of the Steelworkers union at a uranium facility in Illinois balked at company demands for the elimination of retiree health benefits, reductions in pension benefits and other severe contract concessions, Honeywell locked them out for 12 months.
Also on the council is Lowell McAdam of Verizon Communications, which for years has fought against union organizing at its Verizon Wireless unit and took a hard line in its most recent round of contract negotiations covering its unionized workforce.
Then there is Douglas Oberhelman, the CEO of Caterpillar, which has one of the most contentious labor relations histories of any large company, including a 15-week strike at one plant earlier this year prompted by management demands for far-reaching contract concessions.
Not to mention W. James McNerney, Jr. of Boeing, which was accused of opening an assembly plant in right-to-work South Carolina as a form of retaliation against union activism at its traditional manufacturing center in the Seattle area.
These anti-union crusaders have helped bring about a climate of wage stagnation that not only undermines the living standards of their employees but also weakens businesses that depend on their purchasing power.
Fix the Debt CEOs also seem to think that their companies deserve to be lavishly rewarded when they make investments that create jobs. While it is difficult to discern these rewards at the federal level, where they come through the fine print of the Internal Revenue Code, the payoffs are abundantly clear in the lucrative subsidy deals the corporations receive from state and local governments.
For example, that Boeing plant did not only get the promise of a workforce that in all likelihood will remain unorganized. South Carolina also bestowed on the company a state and local subsidy package that has been valued at more than $900 million.
Verizon has received more than $180 million in subsidies from state and local governments around the country. Caterpillar got an $8.5 million grant from Gov. Rock Perry’s Texas Enterprise Fund as well as local subsidies when it eliminated jobs in Illinois and opened a new plant in the Lone Star State. Honeywell has received subsidies in at least 14 states.
The subsidy recipients represented in Fix the Debt are not limited to that anti-union group; there are many others. For example, Goldman Sachs, whose CEO Lloyd Blankfein has been a frequent spokesperson for the campaign, took advantage of $1.65 billion in low-cost Liberty Bonds when building its new headquarters in Lower Manhattan.
The refusal of these companies to deal respectfully with unionized workers and their insistence on taking lavish taxpayer subsidies they don’t need are two symptoms of a flawed business culture. The United States does have an entitlement problem, but it is not related to Social Security, Medicare or Medicaid. It is the notion held by too many large corporations and their CEOs that their narrow interests are synonymous with the national interest. Rather than presuming to fix the debt, big business needs to fix itself.
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