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America’s CEOs Say Fix the Debt…As Long As We’re Exempt

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Having watched the last episode of the History Channel’s “The Men Who Built America”, I get the feeling I’m seeing history repeat itself again.

At the end of the 19th C and beginning of the 20th C, America’s richest CEOs pooled their money to buy the presidency for their favored candidate, Wm McKinley, who would allow them to business as usual regardless of the devastating price paid by labor, farmers and merchants. Their concerns were to keep their monopolies and their extraordinary wealth, regardless of the effects on rest of the populace.

After McKinley was killed shortly after his 2nd inauguration, Teddy Roosevelt, who was hated by those captains of industry, became president and began the progressive era, breaking up the industrial and banking monopolies as well as ushering in an era that protected labor, farmers, and merchants. These changes led to a vast improvement in working conditions and higher wages which eventually led to the great expansion of the middle class.

The times may be different, but the arguments from huge businesses remain the same.

‘Fix The Debt’ CEOs Underfund Employee Retirement, Demand Cuts For Elderly

A group of high-profile corporate CEOs are lobbying Capitol Hill this week to put Social Security and Medicare cuts at the forefront of deficit reduction negotiations. Their own retirement funds, however, are secure: The coalition includes 54 CEOs who have amassed combined pension assets of more than $649 million from their companies’ executive retirement plans, according to a new report from the Institute for Policy Studies, titled “A Pension Deficit Disorder: The Massive CEO Retirement Funds and Underfunded Worker Pensions at Firms Pushing Social Security Cuts.”

The CEOs’ employees are much less secure in their retirement than the CEOs. According to the report, less than 60 percent of the 71 public companies offer pension plans for their employees. Of the 41 companies that do, 39 of them haven’t contributed enough to their workers’ pension funds to enable the plans to pay out their anticipated obligations. Among the companies with employee pension funds in the red, these deficits exceed $100 billion.

The CEOs are among 71 chief executives of publicly traded companies who belong to the Fiscal Leadership Council of the influential Campaign to Fix the Debt, a group which has raised more than $60 million to lobby for a debt deal driven by cuts to “entitlements.” The coalition will meet Wednesday morning with congressional leaders, according to sources familiar with the group’s lobbying activities. The group, funded in part by former private equity magnate Peter G. Peterson’s foundation, has pledged to push for austerity during the lame duck congressional session, and beyond. Peterson has spent nearly half a billion dollars in recent years pushing his austerity agenda.

As the debate heats up over whether to cut Medicare, Social Security or Medicaid in order to maintain federal spending and corporate tax breaks, companies with well-compensated CEOs who preside over underfunded employee pension funds invite a new round of questions about the motives, and methods, of the CEOs pressuring Congress and the White House to cut programs for the middle class.

The companies in arrears on their pension funds include defense giant Boeing, which paid CEO Jim McNerney $23 million last year; Honeywell, where CEO Dave Cote earned more than $55 million in compensation in 2011; and AT&T, which docked CEO Randall Stephenson’s pay by $2 million last year after he orchestrated a failed takeover of T-Mobile. The $2 million penalty meant that Stephenson made only $22 million total that year, as opposed to the $24 million he would otherwise have been paid.

Boeing, Honeywell, and AT&T represent just three of the dozen companies who are cited in the IPS report as having CEOs with individual retirement assets totaling more than $20 million each, despite the fact that their companies have underfunded pension funds for their employees.

If each of these 12 CEOs were to convert his retirement accounts into annuities at age 65, the report shows each would receive a monthly check for at least $110,000 for life. By contrast, the average monthly Social Security payment was $1,237 in October. Still, the CEOs argue that Social Security benefits are too generous.

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Written by Valerie Curl

November 27, 2012 at 8:32 PM

One Response

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    December 4, 2012 at 8:45 PM


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