General Electric Chairman and CEO Jeff Immelt adamantly rejected the suggestion that Congress should go over the so-called “fiscal cliff,” saying it would be a “failure” if President Obama and Speaker John Boehner (R-Ohio) can’t reach a deal before the new year…. Immelt encouraged the president and House Speaker to come to a doable agreement that both parties could accept. He told CBS that he was speaking from the point of view of the business community at large in urging Democrats and Republicans to reach a deal….Immelt, along with several other CEOs, met with Obama to discuss fiscal issues in November. Obama also chose Immelt to head the administration’s Jobs and Competitiveness Council to provide advice to the president on how best to strengthen the economy and create jobs.
The “fiscal cliff” legislation passed this week included $76 billion in special-interest tax credits for the likes of General Electric, Hollywood and even Captain Morgan. But these subsidies weren’t the fruit of eleventh-hour lobbying conducted on the cliff’s edge — they were crafted back in August in a Senate committee, and they sat dormant until the White House reportedly insisted on them this week…General Electric and Citigroup, for instance, hired Breaux and Lott to extend a tax provision that allows multinational corporations to defer U.S. taxes by moving profits into offshore financial subsidiaries. This provision — known as the “active financing exception” — is the main tool GE uses to avoid nearly all U.S. corporate income tax.
Don’t get me wrong. A company’s management’s duty is to its shareholders. Trying to cut these sort of deals is part of the job. The same ought not to be said of the politicians who, disgracefully, went along.
More generally, however, Carney’s (terrific) article is a reminder that when we hear CEOs calling on the country to make sacrifices, join together and all the ‘bipartisan’ rest of it, we also need to ask ourselves what little (or not so little) agreements they have made on the side.