… While Reaping Billions In Government Contracts, Tax Breaks – Published on Huffington Post/Politics, by Christina Wilkie and Ryan Grim, Nov. 25, 2012 (click also on videos).
WASHINGTON – The corporate CEOs who have made a high-profile foray into deficit negotiations have themselves been substantially responsible for the size of the deficit they now want closed.
The companies represented by executives working with the Campaign To Fix The Debt have received trillions in federal war contracts, subsidies and bailouts, as well as specialized tax breaks and loopholes that virtually eliminate the companies’ tax bills.
The CEOs are part of a campaign run by the Peter Peterson-backed Center for a Responsible Federal Budget, which plans to spend at least $30 million pushing for a deficit reduction deal in the lame-duck session and beyond.
During the past few days, CEOs belonging to what the campaign calls its CEO Fiscal Leadership Council – most visibly, Goldman Sachs’ Lloyd Blankfein and Honeywell’s David Cote – have barnstormed the media, making the case that the only way to cut the deficit is to severely scale back social safety-net programs – Medicare, Medicaid, and Social Security – which would disproportionately impact the poor and the elderly … //
After mentioning a few scary-sounding deficit statistics, he suggested the government raise revenue by ending individual tax credits and deductions, which he said amounted to a $1 trillion “giveaway” in 2011. It was clear, however, that Cote hadn’t come on the show to talk about taxes.
“The big nut is going to have to be [cuts to] Medicare/Medicaid … especially with the baby boomer generation retiring. It’s going to literally crush the system.”
But while Cote strongly recommends cutting those benefits, when it comes to the tax obligations of corporations, he’s clear about what he wants: a corporate tax rate of zero.
“From a fairness perspective, nobody would be able to stand [a zero tax rate on corporate profits],” but if the U.S. really wanted to create jobs, he said this spring, “we would have the lowest rate possible.”
At Honeywell, Cote practices what he preaches. Between 2008-2010, the company avoided paying any taxes at all. Instead, the company got taxpayer-funded rebates of $34 million off of profits totaling nearly $5 billion.
Part of what makes the lobbying blitz around the fiscal cliff so complex for CEOs on the Fiscal Leadership Council is that many of them need more than just low tax rates. They also need Congress and the White House to maintain current defense spending levels so they can continue winning enormous contracts.
In 2011, $40 billion of taxpayer money was divided among just nine CFD member companies, led by defense giant Boeing, which raked in $22 billion in federal contracts alone, more than the other eight companies combined. For his efforts as CEO, Boeing’s Jim McNerney took home nearly $23 million in compensation last year.
But even as McNerney lends his name to the deficit commission, his company has quietly begun laying off U.S. workers ahead of defense cuts that are expected to be part of a deficit reduction deal. The company denies that federal spending has anything to do with the job cuts, but defense industry analysts aren’t convinced.
At least one faction of Boeing’s workforce is thriving: Boeing lobbyists in Washington have made $12 million since January fighting proposed cuts to defense and aerospace projects.