President Barack Obama on Wednesday will meet with several establishment CEOs at the White House to help win a package of immediate tax increases and postponed spending cuts.
Several of the CEOs are part of the “Fix the Debt” campaign, which is a group with deep ties in Washington’s establishment. The group is formally headed by former Wyoming Republican Sen. Alan Simpson and Democrat Erskine Bowles, but many of its leaders are establishment figures comfortable with a large and growing government.
Simpson and Bowles co-chaired Obama’s National Commission on Fiscal Responsibility and Reform, whose proposals were largely ignored by Obama.
The “Fix the Debt” website does not push either of the two major debt-reduction strategies — government-boosting tax increases or government-shrinking spending cuts.
But the group’s website tilts towards raising taxes, both by suggesting that spending cuts should be postponed and by blaming GOP policies for the debt.
“A credible [debt reduction] plan could help strengthen the recovery by improving confidence and reducing uncertainty, even if [budget] savings don’t start until after the recovery,” reads a statement on the website.
The debt has been boosted by ”increased spending on the wars in Iraq and Afghanistan, unpaid for tax cuts, unpaid for stimulus and job creation bills, and the economic downturn,” according to the website.
In contrast, the website does not blame Obama’s big-government policies for the debt problem, even though they have pushed up annual federal spending by roughly $1 trillion above taxes, added $5 trillion to the nation’s debt and boosted welfare spending. (RELATED: Federal debt per household skyrockets in last three years)
Also, the group’s spokesman — Steve Rattner, Obama’s auto-bailout czar — is publicly pushing for tax increases to curb the nation’s $16 trillion debt.
“Everything has to be on the table — there have to be some revenues, there have to be some spending reductions, and you have to deal with entitlements,” Rattner told MSNBC on Monday.
Under Obama’s policies, the debt is likely to reach $20 trillion by 2016, according to forecasters.
Libertarian and social-conservative advocates and legislators will likely slam the group’s role as another example of Obama-era “crony capitalism.”
Conservatives says debt deals spike taxes and simply slow, rather than reverse, the growth of federal government. For example, a March 2011 deal that raised the nation’s debt limit in exchange for near-term spending reductions of $33 billion yielded actual cuts of only a few billion dollars, critics charged.
GOP leaders in the House of Representatives will likely resist the group’s demands. But the GOP will face intense political pressure from the CEOs; many of the executives’ companies provide both jobs in legislators’ districts and donations to critical campaign funds.