The Grand Bargain marches ever onward. Lindsey Boerma of CBS News reports:
Republicans would be willing to tender more revenue in a deal to replace the sequester, Sen. Rob Portman, R-Ohio, said today on “Face the Nation,” if President Obama showed willingness to make “structural changes” to entitlement programs.
Part of Congress’s bipartisan supercommittee tasked with crafting a plan to reduce the deficit by $1.5 trillion, Portman said he and his colleagues came “very close” to striking a “balanced” compromise that partnered spending cuts with revenue to replace the blind, across-the-board cuts known as sequestration before they went into effect March 1. “The problem,” he said, was that Democrats’ proposal to generate revenue fell back on tax hikes, two months after the so-called “fiscal cliff” package upped income taxes on families making more than $450,000 a year.
“We had tax reforms [in the failed plan], which helps grow the economy,” Portman said.
Portman’s statement makes the distinction between “tax reforms” — lowering corporate tax rates while removing loopholes are the reforms currently under discussion — and tax increases, and the Obama Administration has more than once signaled its desire for tax reforms as well. And “structural changes” to entitlements frequently refers to cuts in Social Security, Medicare and Medicaid effected by altering the cost-of-living formulas, another approach the Administration has said it is willing to agree to. The difficulty both parties face is getting their members and voters to embrace the betrayals of principle the eventual agreement would require.
The one obvious winner in such a deal would be large corporations, whose taxes would be cut and who could subsequently lobby to restore any loopholes temporarily suspended. Perhaps not surprisingly, Portman, a Finance Committee member and former Director of the Office of Management and Budget (OMB) under George W. Bush, takes in plenty of campaign contributions from Ohio Republican billionaire investors. Portman’s number one contributor was the Cincinnati insurance and investment company American Financial Group (AFG). Until his death in 2011, Carl Lindner, Jr. owned and ran AFG; he was one of the richest people in the world and a prominent Republican donor, with AFG giving Portman alone over a quarter million dollars. (Lindner’s ice cream company United Dairy Farmers also gave $55,000, ranking 17th.) AFG’s legal representatives, Cincinnati firm Keating Muething & Kleklamp (KMK) ranked 12th. (One of its founding partners, Charles Keating, Jr., later served several years in jail as part of the Keating Five savings and loan scandal.) “Vulture fund” Elliott Management, an investment bank dealing with “distressed debt”, ranked third on Portman’s list, giving $115,000; its founder and CEO Paul Singer is another major Republican contributor. Likewise Mercer Reynolds of investment firm Reynolds, DeWitt & Co. (18th with $54,000) was George W. Bush’s campaign finance chair.
Investment and professional service corporations outside Ohio also look kindly on Portman. These include mutual fund mammoth FMR Corp. (Fidelity) (sixth), “Big Four” banking giants Citigroup (ninth) and JPMorgan Chase (11th), insurance multinational MetLife (tenth), and Edward Jones Investments (15th). Accounting firm Ernst & Young (seventh) and the world’s largest advertising company WPP Group (14th) also made large donations.
Many of his donors come from in-state, however. Cincinnati-based purveyors of pet food and personal care products Procter & Gamble (second) plunked down $179,000 for Portman, while Cincinnati laundry company and KMK client Cintas Corp. (eighth) may well clean up the sheets, towels and uniforms manufactured and distributed by Standard Textile (16th). Cleveland-based legal practice Squire Sanders (fourth), for whom Portman worked after resigning as George W. Bush’s OMB director, gave him over $100,000. Ohio’s main corporate law firm Thomspon Hine (13th), and Ohio-based BakerHostetler (20th).