By Kevin Bogardus - 04/15/13 07:16 PM EDT
The AFL-CIO shifted its fire on Monday from President Obama to a more familiar foe: business groups.
In an annual report on executive pay, the labor federation said business executives who are calling for debt reduction should accept higher taxes and quit targeting Social Security and Medicare for cuts.
“Groups like the Business Roundtable and Fix the Debt have been drumming up a deficit scare to distract attention away from America’s real economic problems and to hide their efforts to get even more tax cuts for corporations while hacking at Social Security, Medicare and Medicaid,” said AFL-CIO President Richard Trumka.
Trumka last week panned Obama’s proposed entitlement cuts as “wrong and indefensible,” and on Monday said he had tried to talk the president out of them.
“He obviously chose not to follow the wisdom that I tried to impart on him and he went his own direction. We think that was a mistake,” Trumka said.
Union officials spent millions helping Obama win reelection and have at times been hesitant to criticize the president. Trumka’s statement on the budget signaled a more confrontational approach to the White House, but AFL-CIO officials on Monday reserved most of their fire for business leaders.
“These CEOs really should be ashamed for trying to balance the budget on the backs America’s working people while at the same time demanding corporate tax cuts for overseas profits,” Trumka said.
Fix the Debt said it was “unfortunate” that union officials would rather “cast aspersions” than engage in a “constructive conversation” about the deficit.
“As President Obama, Democrats and Republicans have all said: Tackling the nation's fiscal challenges requires a balanced approach that includes both entitlement and tax reform,” said Jon Romano, vice president of communications for Fix the Debt.
Obama’s budget calls for the use of a formula known as “chained CPI” to calculate cost-of-living increases for safety net programs. The formula would result in benefit cuts over time.
Supporters of chained CPI say it represents a more accurate measure of inflation than the current formula and will help curb the explosive growth of entitlement spending.
Unions strongly oppose the plan, and are pushing congressional Democrats to ensure it never becomes law.
“The chained CPI is just bad policy,” Trumka said. “We are very unhappy about that, like most Americans, I believe.”
The AFL-CIO tried to drum up opposition to entitlement cuts by highlighting the pay of business leaders who are leading the charge for a deficit deal. One page of the report listed the retirement packages for CEOs who sit on the executive committee for the Business Roundtable, which has called for an increase in the Social Security age.
In response, the Roundtable stressed the importance of Social Security and said workers are “depending on us to work together and solve this problem.”
"The easy thing to do would be to sit back and not make tough choices to strengthen them," said Tita Freeman, senior vice president for communications for the Roundtable. "If we’re going to get the economy on sound fiscal footing, we must get health spending under control so we can guarantee the promise of Medicare and Social Security to the next generations of Americans."
The AFL-CIO report reviewed the compensation packages of the chief executives of the S&P 500 companies. The labor group estimated that CEOs, on average, took in $12.3 million in 2012, which was 354 times as much as the average worker.
That’s actually a decrease from the average pay disparity that was calculated by the AFL-CIO last year, but officials said the drop was mostly due to Apple CEO Tim Cook going from a $378 million salary in 2011 to $4 million last year.
Trumka used the release of the pay report to push for a regulation from the Dodd-Frank financial reform law that would require publicly traded companies to disclose their CEO-to-worker pay ratios.
“We are hopeful that we will get that done and get that passed,” Trumka said.
The new requirement has yet to come into effect, and is awaiting action from the Securities and Exchange Commission (SEC).
Major industry groups, including the U.S. Chamber of Commerce and the Business Roundtable, have pushed back against the requirement, calling it onerous and unnecessary. Those groups have called for the SEC to take into account business community input when drafting the rules.
—Peter Schroeder contributed to this report.