Wall Street and the Supercommittee: The $41 Million Question

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Liz Ryan Murray is the Policy Director for National People’s Action. Adam Smith is the Communications Director at Public Campaign.  This is their first guest post for our ongoing DylanRatigan.com series “Get Money Out.”

The Financial Crisis Inquiry Commission reported earlier this year that Wall Street was able to get away with its unscrupulous practices for so long, in part, because of the power it had over Washington, D.C. lawmakers and regulators.

In the years leading up to the country’s economic collapse, Wall Street threw money at elected officials in order to weaken financial industry regulations. Wall Street greed fueled a downward cycle of corruption, leading our country into a tailspin that forced millions of Americans out of work while lawmakers where unable or unwilling to rein in their campaigns’ underwriters. 

The Joint Committee on Deficit Reduction now faces similar pressure from these interests to leave them and their companies undertaxed.  Wall Street interests have millions of dollars in campaign contributions and an army of lobbyists on their side, according to a new report from our organizations, Public Campaign and National People’s Action.

- The 12 members of the so-called “supercommittee” have received at least $41 million in campaign contributions from the financial sector over the years.
- Sen. Max Baucus (D-Mont.) is the biggest recipient with $6.2 million.
- Republican Conference Chair Rep. Jeb Hensarling (R-Texas), who recently called the Dodd-Frank financial reform legislation “a deadly cocktail of political favoritism, regulatory overreach, and radical measures,” leads the House members on the committee with $3.9 million in contributions.
- Between them, the supercommittee members have more than two-dozen current or former aides that have represented Wall Street as lobbyists.

These strong ties must not influence the committee’s efforts to find $1.5 trillion in deficit reduction measures. The supercommittee can’t let Wall Street buy its way out of accountability or paying its fair share. Not again.

And there’s no way to achieve a balanced approach with a ‘cuts-only’ strategy. Our country’s seniors shouldn’t have to dip into their social security checks to make up for cuts to Medicare while hedge fund managers get tax breaks. National People’s Action calls on supercommittee members to raise a portion of the revenue we desperately need from Wall Street. Wall Street’s actions drove the current recession and they need to pay to fix what they broke.

Possible ways to raise revenue from Wall Street include closing the carried interest loophole, a financial speculation tax, and implementing a bank liability fee. Other ideas—like requiring millionaires to pay at least as much in taxes as middle class families and closing corporate jet and yacht loopholes—would likely affect Wall Street executives.

Supercommittee member Sen. Pat Toomey (R-Pa.) recently told a groups of constituents that, “I would say we have an absurd tax code that has so many ridiculous features that are there because special interests have carved them out. I’m all in favor of reforming it so we can get rid of those kinds of features.”

He’s right. That’s exactly why Public Campaign, National People’s Action and two-dozen groups urged supercommittee members to give up fundraising while serving on the supercommittee. Bankers and their lobbyists shouldn’t get special access to the negotiations because they can write big checks.

Some are, at least partially, heeding our call. Sen. John Kerry (D-Mass.) won’t raise money for himself while serving on the committee. Sens. Baucus and Rob Portman (R-Ohio) have canceled events. Reps. Dave Camp (R-Mich.) and Fred Upton (R-Mich.) won’t schedule additional fundraisers while serving.

It’s a good start and they should go further.

Over the past few years, we’ve witnessed a political system that allows those who caused the economic disruption we see on Main Street in town after town and city after city to buy their way out of responsibility and pass that burden on to the rest of us. With the actions of the supercommittee under the microscope, we hope that will come to an end.

To read the full report, visit Public Campaign.

READ MORE ON THIS TOPIC:

The Influence Industry: Supercommittee members are lining up fundraisers [Washington Post]

Supercommittee members plan fundraisers during deficit talks [Huffington Post]