Posted by StreetWise in Magazine Articles
Seniors are in danger of losing Social Security and Medicare benefits as Congress debates ways to reduce the nation’s debt and corporations that are able to deduct portions of executive compensation are part of the problem, said Elizabeth Watkins during a July 9 rally at Macy’s State Street led by Jane Addams Senior Caucus and ONE Northside.
“Each year, these CEO’s are deducting millions from Social Security for tax cuts,” said Watkins, a senior citizen and chair of the St. Louis-based Metropolitan Congregations United, whose mission is to develop relationships with policymakers to bring about community change. “This affects our Medicare, Medicaid and our ability to access the necessary medicine we need.”
During the rally in front of Macy’s at 111 N. State St., protestors demanded that its CEO Terry Lundgren withdraw his support from the Fix the Debt Coalition. Lundgren is one of more than 90 CEOs of publicly-held companies who support this campaign. Others include Thomas J. Quinlan II of Donnelley & Sons Company, Jamie Dimon of JPMorgan Chase & Co., Stephen Helmsley of UnitedHealth and Lowell McAdam of Verizon Communications, Inc.
“Macy’s says that one of its main corporate principles is to support the communities that have sustained the company for so many years. But Fix the Debt’s agenda directly contradicts Macy’s values,” said Carolynn Ediger of the Jane Addams Senior Caucus in a press release. “The Americans who have worked their whole lives in order to have retirement security would be the victims of Fix the Debt’s policies.”
According to the Institute for Policy Studies (IPS), corporations in the Fix the Debt campaign qualified for tax breaks of roughly $1 billion in their executive pay packages between 2009 and 2011. This is because while corporations can write off only $1 million of salary, stock options and other incentives are excluded.
“The performance pay loophole, in short, serves as a critical subsidy for excessive compensation,” said the IPS study. “The larger the executive payout, the less the corporation pays in taxes. And average taxpayers wind up footing the bill.”
For example, UnitedHealth’s Helmsley received roughly $193 million in performance-based pay between 2009 and 2011, which led to a tax break of $68 million, according to the hill.com blog.
The bipartisan Fix the Debt coalition was co-founded by Erskine Bowles and Alan Simpson, who chaired President Obama’s fiscal commission, which “pushed hard for a so-called ‘grand bargain’ to be the solution to the mix of spending cuts and tax increases that were looming at the end of last year,” according to the hill.com.
“Both Democrats and Republicans are trying to find ways to renege on ways on adhering to the reduced spending levels set up by the ‘sequester’,” Maya MacGuineas, president of the Committee for a Responsible Federal Budget and head of Fix the Debt, said in a press release. “The House has begun moving bills that can be expected to exceed the defense allotment under sequestration and the Senate is planning to allocate more overall discretionary spending than the law prescribes—rather than replacing it with a more responsible package of savings.”
The $11.1 trillion US debt is more than 70 percent of the nation’s economy, according to the Fix the Debt website. “Increased spending on the wars in Iraq and Afghanistan, unpaid-for tax cuts, unpaid-for stimulus and job creation bills and the economic downturn have automatically pushed up spending and brought down revenues, increasing debt. In the long-term, debt will rise from other factors: health care and retirement costs growing faster than the economy and an outdated tax code that brings in insufficient revenues.”
Fix the Debt is also pushing to shift to a Chained Consumer Price Index (Chained CPI), which helps determine the cost of living and estimates inflation. “These changes would significantly reduce the already modest benefits of seniors and persons with disabilities who rely on Social Security for much of their income,” said a Jane Addams Senior Caucus press release. “If we raise the FICA cap or ‘Scrap the Cap’ and insist that everyone pay their fair share then we could expand benefits and protect Social Security for our children and grandchildren.”
Other participants in the July 9 rally included, Illinois Alliance for Retired Americans, Center for Community Change, GRO-Grassroots Organizing, the Metropolitan Congregations United, Ohio Organizing Collaborative, The Contact Center, and Michigan Organizing Collaborative.
By Torey Darin
StreetWise Editorial Intern