Lloyd Blankfein, Chairman and CEO of Goldman Sachs, speaks at the Clinton Global Initiative, in New York. (AP Photo/Craig Ruttle)
Billionaire Pete Peterson once thought it would be a good idea to make rich CEOs the public face of his long-standing campaign to slash Social Security.
Guys like Lloyd Blankfein of Goldman Sachs and GE’s Jeffrey Immelt have indeed won many a battle in Washington. And so it was perhaps understandable for Peterson to assume these corporate chieftains could deliver victory on austerity.
But as Congress heads toward yet another budget showdown, America’s most powerful CEOs are finding that their enormous wealth can also be a double-edged sword.
Last year Peterson put up the initial $5 million to create the Fix the Debt campaign, a PR and lobby machine led by more than 135 CEOs of major corporations. Honeywell CEO David Cote says he organized fellow corporate leaders to chip in the rest of the organization’s $45 million initial budget.
With that kind of dough, you can hire a lot of hot shot Mad Men. But even Don Draper would have a hard time glossing over the flaws in the Fix the Debt model. Its central theme: “Shared sacrifice” is needed to save America from fiscal Armageddon. But how do you pull off broadcasting that message when your CEO spokespeople have retirement fortunes larger than the operating budgets of most mid-size American cities?
David Cote himself has $134.5 million in his Honeywell retirement account, according to a new report by my organization (the Institute for Policy Studies) and the Center for Effective Government. That’s considerably more than the annual budget of Annapolis, Maryland. And it’s enough to generate a monthly retirement check of nearly $800,000 for Cote, starting at age 65. The average Social Security check: $1,237.
Fix the Debt CEO Council members Jeffrey Immelt of GE, Larry Merlo of CVS Caremark and Randall Stephenson of AT&T are also sitting on nest eggs worth more than $50 million each.
It’s not that the group hasn’t tried to use slick public relations strategies to paper over the inconsistencies in its messaging. But in several cases it’s made matters worse by deploying communications tools and tactics developed by forces that have people power but not much money. When you have the opposite – loads of money but not much genuine popular support—those tactics don’t work so well.
The other day, for instance, the group hosted a Twitter chat. A festival of snark ensued (e.g., “Is it true billionaires have money vaults like Scrooge McDuck? Do you ever get the urge to drink from a chalice?”). As The Washington Post put it, they were “trolled epically.”
A while back, Fix the Debt hired young people to perform a flash mob in a Washington, DC, park. The media coverage consisted mainly of a video in which some of these very same young people disavowed Fix the Debt’s support for cutting Social Security.
In the latest blunder, Fix the Debt got caught submitting an identical op-ed to several newspapers using different students as the supposed authors. One of the students later explained to the Milwaukee Journal Sentinel that she hadn’t even seen the piece until it appeared in the paper under her byline.
After a year of efforts, a cadre of communications specialists is no doubt better off. But according to a recent National Journal poll, American opposition to reduced spending on Social Security hasn’t budged. In October 2013, 76 percent said they oppose any cuts—the exact same percentage as in February 2012.
Another part of Fix the Debt’s challenge is that its agenda also includes lowering corporate tax rates. Again, it’s hard to sell that “shared sacrifice” line when you stand to make out like a bandit. According to a previous Institute for Policy Studies report, one of the group’s tax proposals — to exempt corporations’ overseas earnings from federal taxes — would net the group’s member firms a windfall of as much as $173 billion.
Even on corporate cash-dependent Capitol Hill, the hypocrisy can sometimes be too much. One Huffington Post article described a scene where a Fix the Debt member CEO was lecturing a group of senators on fiscal responsibility. An aide passed Sen. Harry Reid a note about how the CEO’s company had contributed to the deficit through tax dodging. Reid abruptly cut the meeting short.
As the Congressional Budget Conference Committee works toward a December 13 deadline for a new budget agreement, Fix the Debt is still pushing for a deal that would hit average families and retirees the hardest. Fortunately, its CEO messengers haven’t won over many hearts and minds. But the battle is far from over.
