Summary
The latest ad from the Media Fund — the group headed by former Clinton White House aide Harold Ickes — shows the White House lawn being given over to corporate logos and a neon sign saying “Corporate Headquarters.”
There’s no question Bush is pro-business, but this ad goes far over the line on several counts. It implies Bush hasn’t acted to protect pensions, fight corporate corruption or provide a “real” prescription drug benefit for retirees, all of which are false. It also implies he personally awarded a contract to Halliburton, which is also false.
Analysis
It’s hard to cram this much distortion into a mere 30 seconds, but Ickes’ group is up to the task.
Media Fund Ad:
“Corporate Headquarters”Announcer: Instead of protecting pensions, George Bush supported a bill giving Enron huge new tax breaks.
Instead of giving seniors real prescription drug benefits, Bush gave drug companies billions in his Medicare bill.
Instead of fighting corporate corruption, George Bush gave no-bid contracts to Halliburton – a company caught overcharging for fuel and food for our soldiers in Iraq.
Not Protecting Pensions?
The ad says Bush supported tax breaks for Enron “instead of protecting pensions.” That’s wrong.
Bush has taken action to protect pensions, signing legislation in 2002 that made some technical changes to address weaknesses in 401(k) practices that Enron employees blamed for losses in their retirement accounts. Bush also supports additional legislation to allow employees who get company stock as a retirement benefit to sell it and diversify their investments, and to require companies to offer investment advice to employees from independent outsiders.
As for the claim that Bush supported “giving Enron huge new tax breaks,” it’s true that Bush supported repeal of the corporate alternative minimum tax in 2002 as part of an economic stimulus package, and that Enron led a group of corporations pushing for repeal. But the really big breaks for Enron were not proposed by Bush; they were added by Republican House Ways and Means chairman Bill Thomas, who proposed letting corporations redeem AMT credits built up over many years. That would have given $254 million to Enron, and also would have aided several other large corporations. But the whole bill died when the Senate refused to consider it.
A “Real” Rx Drug Benefit?
The ad gives a seriously distorted picture of the Medicare prescription drug benefit that Bush pushed through Congress last year, falsely stating that the bill gives billions to drug companies “instead of giving seniors real prescription drug benefits.” Democrats may not consider the bill sufficient, but they can’t say that this benefit, now estimated to cost $534 billion over the next 10 years, isn’t “real.”
It is true that Democrats pushed for and failed to get a more generous (and expensive) drug benefit than the one Bush signed into law December 8, 2003. It’s also true that the new law contains no government price controls on pharmaceuticals, prohibits importation of price-controlled drugs from Canada, and forbids the federal government to use bargaining pressure to force price concessions from drug makers, and was endorsed by the pharmaceutical industry’s lobbying arm.
But as we’ve pointed out before, millions of seniors will be financially better off when the new law takes effect in 2006. That is particularly true for millions of low-income seniors with few assets, who will be able to get their prescriptions filled for as little as $1 each with no premiums or deductibles.
Furthermore, the new law doesn’t pay “billions” directly to the drug companies as the ad implies. In fact, they are payments to subsidize the cost of offering prescription drug coverage to seniors. It’s true that drug companies stand to increase their profits when millions of seniors start buying drugs they previously could not afford. But the ad, according to the Media Fund’s own documentation, is actually referring to $46 billion that Medicare actuary Richard Foster estimates will be paid over the next 10 years to “Medicare Advantage” plans. That’s not money that goes to drug companies, it is payment to HMO’s and insurance companies designed to give seniors subsidized, private-market alternatives to Medicare’s new drug benefit.
Fighting Corporate Corruption?
The ad says Bush gave contracts to Halliburton “instead of fighting corporate corruption.” In fact, the Bush administration is doing a fair amount to fight corporate corruption, convicting or indicting executives of Enron, Arthur Andersen, Tyco International, Worldcom, Adelphia Communications Corporation, Credit Suisse First Boston, HealthSouth Corporation and others, including Martha Stewart. The Department of Justice says it has brought charges against 20 executives of Enron alone, and its Corporate Fraud Task Force says it has won convictions of more than 250 persons to date. Bush also signed the Sarbanes-Oxley legislation in 2002, imposing stringent new accounting rules in the wake of the Arthur Andersen scandal.
As for Halliburton, it’s true the company is under investigation (by Bush’s Pentagon) for a variety of allegations of possible overcharging in connection with the Iraq war. And it’s also true that Vice President Richard Cheney once headed the company. But it is false to imply that Bush personally awarded a contract to Halliburton. The “no-bid contract” in question is actually an extension of an earlier contract to support US troops overseas that Halliburton won under open bidding. In fact, the notion that Halliburton benefitted from any cronyism has been poo-poohed by a Harvard University professor, Steven Kelman, who was administrator of the Office of Federal Procurement Policy in the Clinton administration. “One would be hard-pressed to discover anyone with a working knowledge of how federal contracts are awarded . . . who doesn’t regard these allegations as being somewhere between highly improbable and utterly absurd,” Kelman wrote in the Washington Post last November.
Media
Watch Media Fund Ad: “Corporate Headquarters”
Sources
“President Acts to Protect Pensions and Retirement Security,” Radio Address by the President to the Nation 19 Oct 2002.
Curt Anderson, “Enron Faces Congressional Tax Probe,” The Associated Press 15 Jan 2002.
Kaiser Family Foundation, “Fact Sheet, The Medicare Prescription Drug Law,” March 2004.
2004 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds, “Table IV.A1.—Estimated Medicare Costs (+) or Savings (–) under the Medicare Prescription Drug, Improvement,and Modernization Act of 2003” 23 March 2004: p157.
George Bush, “President Bush Signs Corporate Corruption Bill” 30 July 2002.
Steven Kelman, “No Cronyism in Iraq,” The Washington Post 6 Nov 2003: A33.
Brooke A. Masters and William Branigin, “Martha Stewart Convicted on All Counts,” The Washington Post 5 March 2004.
David Streitfeld, “Martha Stewart Convicted; An Icon’s Infamy Won’t Be Fleeting,” Los Angeles Times 6 March 2004: A1.
“Prepared Remarks of Attorney General John Ashcroft Indictment of Bernard J. Ebbers & Scott D. Sullivan,” Department of Justice, 2 March 2004.
“Former Enron Assistant Treasurer Lea Fastow Sentenced to 12 Months in Jail,” Department of Justice Press Release, 2 March 2004.
“Enron Task Force Director Leslie Caldwell to Step Down, Andrew Weissmann Named Director,” Department of Justice Press Release, 1 March 2004.