Hope that negotiations over the so-called “fiscal cliff” will avoid partisan politics were dashed this week as a round of ads targeting four precariously positioned Senate Democrats hit the airwaves.
Crossroads GPS, the politically active nonprofit that spent millions in the 2012 election, launched a $240,000 radio ad campaign urging Sens. Mark Begich of Alaska, Mary Landrieu of Louisiana, Kay Hagan of North Carolina and Tim Johnson of South Dakota to “stop the spending.”
All four senators’ seats are considered up-for-grabs in 2014.
Congress and the White House are scrambling to come to a deal on spending cuts and tax increases set to go into effect in the New Year.
Crossroads, co-founded by Karl Rove, a former aid to Republican President George W. Bush, is one of the heavy-hitting advocacy organizations speaking out.
Labor unions, big business and other groups with a vested interest in what happens in Washington are also peppering the public with messages urging citizens to tell Congress to cut spending, extend tax breaks and protect the social safety net — all in the name of avoiding the tax increases and spending cuts set to go into effect after the first of the year.
Return of Rove
Exactly one month after the most expensive election in history — one in which Crossroads GPS spent more than $70 million — the organization launched a $500,000 television campaign on cable networks attacking President Barack Obama’s plan to avoid the fiscal cliff.
“President Obama promised a balanced plan,” the ad says. “But so far, a huge tax increase is his solution.”
This was followed five days later by the senator-specific radio campaign, which continued to attack the Obama plan. The proposal features about $600 billion in spending cuts. The Republicans’ plan features about $1.2 trillion in cuts. Obama’s plan allows for $1.4 trillion in net new revenue; the Republicans’ plan, $800 billion in new revenue.
Crossroads GPS spokesman Jonathan Collegio would not discuss what the ad campaign has in store, other than to say that the group will continue to push the president for more spending cuts.
“If we don’t see the negotiations moving in that direction, we’ll continue to advocate in that direction,” he said. “At this point, the president isn’t coming forward with a balanced approach that has any kind of meaningful spending reductions.”
The Cook Political Report lists nine U.S. Senate races with Democrats as incumbents as competitive in 2014. The other five are West Virginia (Jay Rockefeller); Arkansas (Mark Pryor); Iowa (Tom Harkin); Minnesota (Al Franken) and Montana (Max Baucus).
While Crossroads is fighting for spending cuts, unions are fighting to prevent them.
The American Federation of State, County and Municipal Employees teamed up with the Service Employees International Union and the National Education Association to convince legislators not to cut Medicare, Medicaid, Social Security and education.
The trio opened its campaign with television and radio ads during the third week of November in Colorado, Missouri, Virginia, Pennsylvania and Alaska. A second round of ads debuted Dec. 7.
The ads target both Republicans and Democrats in the U.S. House and Senate.
Several of the Democrats named appeared to waver on opposition to spending cuts. Ads aimed at Republicans encouraged them to support revenue increases.
Both were “significant six-figure buys” according to Chris Fleming, an AFSCME spokesman.
Safety net programs have become the major focus for the three unions because they provide economic security to middle and working class families who have already taken a hit during the recession.
“Are [legislators] looking out to preserve middle class tax cuts for hard-working men and women, or tax loopholes for corporations and the wealthy?” said Kusler in a press release.
Kusler also told the Center that Medicare is of special interest to the NEA, which primarily deals with education issues, because when federal funding to Medicare is cut, states must make up the difference, often by cutting education budgets.
AARP is also defending Social Security and Medicare in a big way — a seven-figure ad campaign called “You’ve Earned a Say” involves television and print ads urging Washington not to “cram decisions about these programs into a last-minute deal.”
“The debate in this lame duck Congress has the potential to impact the lives of older Americans,” said AARP spokesman Joshua Rosenblum. An AARP survey of 50-years-and-older Americans conducted just after the election showed that 70 percent favored no cuts to Social Security or Medicare, Rosenblum said.
Executives from some of America’s largest companies are more concerned with taxes than spending cuts.
The Business Roundtable, an association of CEOs from major companies, is pushing “It’s Time to Act,” a campaign that includes a series of print and radio ads specifically targeting Washington, D.C.
The group wants to extend many of the Bush-era tax cuts, which rung in lower personal income tax rates as well as lower capital gains and dividends rates, among others. Some analysts warn that higher taxes on investments could lead to a stock sell-off.
In a video on its website, CEOs from Caesars Entertainment Corp., Motorola Solutions Inc. and Aetna, among others, argue for “responsible spending,” “fixing the debt situation,” and above all, quickly coming to an agreement to reduce the uncertainty they say their companies now face.
The Alliance for Savings and Investment, whose members include many Fortune 500 companies, has also run print ads advocating keeping taxes low — in particular, the capital gains and dividends rates.
With the prospect of dividends rates rising from 15 percent to the normal income tax rate – as high as 43.3 percent for the upper bracket if all tax cuts expire – investors have been dumping dividend-paying stocks, and some dividend-paying companies will pay out early to shareholders to potentially save them from the higher tax rate. Some of these companies have had to borrow in order to do this.
The potential rise in capital gains from 15 percent to 25 percent could also spurn a stock sell-off as investors seek to take advantage of the more favorable rate.
The Alliance for Savings and Investment’s chairman is former Rep. Jim McCrery, R-La. who is also a member of the steering committee of “Fix the Debt,” a project of the Committee for a Responsible Federal Budget. Fix the Debt was co-founded by Democrat Erskine Bowles, chief of staff under President Bill Clinton, and former Republican Sen. Alan Simpson of Wyoming.
The pair headed Obama’s debt-reduction commission that spearheaded a plan to save about twice as much as both the president’s plan and the Republicans’ plan through a combination spending cuts and tax increases.
The organization is running print, online and outdoor ads. Its newest ad, online at The Nation, features what spokesman Jon Romano called “unlikely voices,” — a teacher and a fireman concerned about the national debt. Earlier ads riffed on famous slogans, including Nike (“Just fix it”) and McDonald’s (“I’m fixin’ it”). Television ads are in the works.
Fix the Debt has raised $42 million for its campaign to advocate avoiding the fiscal cliff with a combination of tax increases, spending cuts and entitlement reforms, Romano said. Romano did not respond to follow-up questions about who the group’s top donors are.
Crossroads GPS is a nonprofit and is not required to release the names of its donors.
Fix the Debt’s leadership committee includes representatives from many of the same companies as the Alliance for Savings and Investment and the Business Roundtable — executives from AT&T and Verizon, for example, are members of all three.
Despite this, Romano said Fix the Debt is really more of a “bipartisan, grassroots campaign.”
The group is active in 17 states and boasts more than 320,000 signatories of its “Citizens Petition to Fix the Debt,” according to its website.
“We believe that any deal needs to be big, bipartisan and balanced. It needs to include reining in spending; it needs to include real entitlement reform; and it needs to raise revenue,” Romano said. “It’s the test of our time for our political leaders.”
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