Socialist Alternative

Both Parties Complicit in Rotten Debt Deal – Time to Fight Back!

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A rotten deal of historic proportions has been cut. Using the looming threat of a disastrous debt default as cover, Democratic and Republican leaders rushed a bill through Congress to raise the debt ceiling and cut $2.5 trillion over ten years from the federal budget. There were no tax increases on the wealthy, not even a limited closing of some tax loopholes. Virtually all the pain will fall on working-class and poor people, through cuts to programs and services

A colossal $1 trillion in cuts will be implemented immediately, but the biggest danger lies ahead. The bill establishes a special bipartisan “super committee” tasked with cutting another $1.5 trillion. The bill places stunning authority in this unelected “super committee,” whose proposals for sweeping cuts will not be subject to any amendments. Instead, cuts will be put to a simple up or down vote by the end of the year. And if Congress dares to vote down the super committee’s proposal, this will automatically trigger a broad a series of cuts – brutal cuts anyway!

While Social Security, Medicare and Medicaid were spared from the immediate cuts, this special bipartisan super committee is widely expected to propose so-called “entitlement reforms.” In fact, the maneuver of handing such sweeping authority to an unelected committee is designed to give both parties political cover for enacting deeply unpopular attacks on Social Security, Medicare and Medicaid.

The $2.5 trillion cuts deal was passed by the House 269-161, with 95 Democrats voting in favor. The Senate passed it 74 to 26, and Obama signed it into law Tuesday, just hours before the default deadline.

Mass Anger

Among workers and the Democrats’ liberal base, outrage at Obama and party leaders has reached new heights. The president who was supposed to revive the New Deal appears determined to bury it instead. Reflecting deep anger from below, liberal commentators have been exploding the blogosphere with denunciations.

There have been calls to action, and there is even growing talk of a primary challenge to Obama. Missing, however, from virtually all the commentary are a clear strategy and program for working-class people to mount an effective resistance and, crucially, to build our own political voice, our own political party. In this article and in future ones, Socialist Alternative will present our ideas on the way forward.

Channeling the growing mood of indignation, on the Monday night after the deal was initially announced Keith Olbermann, host of Current TV’s Countdown with Keith Olbermann, said in his special comment:

There is a tide pushing back the rights of each of us, and it has been artificially induced by union bashing and the sowing of hatreds and fears… It will continue and it will crush us, because those who created it are organized, unified and hell-bent, and the only response is to be organized, unified and hell-bent in return. We must…protest this deal, and all the goddamned deals to come, in the streets. We must rise – non-violently, but insistently. General strikes, boycotts, protests, sit-ins, non-cooperation, takeovers.

Vermont Senator Bernie Sanders said: “It is very clear that there will be devastating cuts to education, infrastructure, Head Start and child care, LIHEAP [low income energy assistance], community health centers, environmental protection, affordable housing and many, many other programs.”

It doesn’t matter that the most dramatic rises in the federal debt were incurred in the last decade of multiple wars, massive tax cuts for the rich and trillions in bailouts for Wall Street. It doesn’t matter that working-class people were neither responsible for nor benefited from most of that deficit creation. Democrats and Republicans, controlled by Wall Street and corporate America, have decided that ordinary people have to pay for a crisis we did not create.

The states and cities have already made deep cuts to education, health care and other vital spending. The new debt ceiling deal will only further reduce funding to states and localities. In other words, federal cuts will have a chain reaction effect, including more cuts at the state and local levels. At a time when the economy is slowing down, unemployment is rising and consumers are being tapped out, cutting government spending will take away more demand from the economy, risking a double-dip recession.

Any way you cut it, this means a significant reduction in the quality of life for working people in this country. There is no indication that this is the end of austerity proposals either. The credit rating agency Standard & Poors has said the new debt ceiling deal will not keep them from considering downgrading U.S. creditworthiness. And if there’s anything the past few weeks have taught us, it’s that Obama and both parties in Congress will oblige them with more demands for austerity.

Orchestrating a Perfect Storm

The creation of the super committee is, at base, an attempt by Obama and leaders of both parties to shelter themselves from the mass anger both at the current debt deal and at their plans for deeper attacks on New Deal programs. This super committee is essentially a replay of the Deficit Reduction Commission that met last year. That commission’s members, largely chosen or agreed to by Obama, included some of the most virulent opponents of the popular New Deal programs. Congress didn’t pass the recommendations at the time because it was politically impossible, given the popularity of Social Security, Medicare, Medicaid and similar programs.

But this time around the corporate politicians, using the debt ceiling limit as a device for political theater, managed to orchestrate the perfect storm to finally declare open war on New Deal and Great Society programs.

Given how much the political climate in the Capitol has gone to the right, there is no reason to expect kid gloves from this new super committee, which now carries with it a threat of automatic cuts in both national security and domestic spending if its plan doesn’t carry through.

The bill actually manufactures another politically useful crisis moment, scheduled for the end of this year, by creating the “automatic trigger” for massive cuts to both defense and domestic programs if the super committee fails to come to an agreement or if their proposals are rejected by Congress. The super committee has to report its recommendations by Nov. 23, and Congress has to vote up or down on them by December 23.

There appears to be a sweetener for the Democrats’ liberal base in this automatic trigger mechanism. The cuts already included in the bill include $350 billion over ten years from the defense budget, which has been a sacred cow for a long time. However, there is reason to be skeptical about these cuts. No one knows how much will come from veterans’ benefits, which we would oppose, or if it will really hit the defense contractors’ profits.

Medea Benjamin and Chales Davis point out: “While the numbers may sound impressive out of context, that’s like draining an Olympic-sized pool with a glass from your kitchen: you’re going to be at it for awhile. The military budget has ballooned so much over the last decade that even if it was cut in half tomorrow the U.S. would still spend more than it did in 2001,” (, 8/3/11).

There is a possibility, though, that really deep cuts in defense or “security” spending could theoretically happen. If the super committee’s proposals are not accepted by Congress and the “trigger” mechanism goes off, then across-the-board cuts will be half from defense and security spending, while sparing Social Security and Medicaid – although Medicare would still take a hit.

Republican leaders likely had their own reasons to agree to the threat of automatic defense cuts. After Tea Party intransigence scuttled a potential “grand bargain” between Obama and Republican leaders for a $4 trillion deficit reduction plan – including to Social Security and Medicaid – Republicans faced widespread criticism from their corporate backers. Now, Republican leaders no doubt plan to use the threat of automatic defense cuts to pressure Tea Party discontents to back the super committee’s proposals, even if it does include limited tax increases.

The super committee is also free to consider tax increases. However, Republicans already showed their willingness to push the country to the brink of disaster to avoid tax increases, so there is little reason to hope for progressive tax-change proposals from the super committee. Even if popular support for Social Security and Medicaid somehow scuttles these elaborate political maneuvers, the fact that Obama has put them in play is a literal invitation for Republicans to use any number of “blackmail” opportunities in the next months and years to take them up once more. Whenever Congress has to vote to extend unemployment benefits or pass the 2013 federal budget, the whole drama can start again.

Is Obama Weak or Complicit?

This entire process has dramatically sharpened anger at the corporate politicians in Washington. Already, volumes of articles and commentary have come out from liberal and left-wing voices analyzing just how bad the debt deal is. The dominant narrative is that Obama and Congressional Democrats are weak negotiators and caved to the Republican right wing. Commentator Paul Krugman’s Monday column was titled “The President Surrenders.” Matthew Rosthchild titled his article “Obama Just Got Run Over,” and Robert Reich lamented, “Ransom Paid.”

Unfortunately, this narrative is dangerously wrong. Obama came into the White House wanting to enact fiscal austerity. Mike Whitney, on, quotes a November 2008 speech from Obama: “Our economy is trapped in a vicious cycle: the turmoil on Wall Street means a new round of belt-tightening for families and businesses on Main Street … we’ll have to scour our federal budget, line-by-line, and make meaningful cuts and sacrifices as well,” (, 8/1/11).

As far back as 2009, David Brooks reported in his column about a conversation he had with senior White House advisers in which they related that Obama “is extremely committed to entitlement reform and is plotting politically feasible ways to reduce Social Security as well as health spending,” (“When Obamatons Respond,” New York Times, 3/5/09).

The course of this debt ceiling debate has revealed the true character of the Democratic Party and especially the Obama administration. It was the Obama administration that offered cuts in Social Security, Medicaid and Medicare. His administration originally offered a much larger deficit reduction deal of $4 trillion that included guaranteed cuts in the New Deal programs.

In his speech of July 31 announcing the debt deal, Obama said: “Now, is this the deal I would have preferred? No. I believe that we could have made the tough choices required – on entitlement reform and tax reform – right now, rather than through a special congressional committee process”.

Revealing the deepening divisions inside the Democratic Party, the liberal lion, Rep. John Conyers, said: “The Republicans – Speaker Boehner or Majority Leader Cantor – did not call for Social Security cuts in the budget deal. The President of the United States called for that,” (, 8/1/11, also see video here).

Last winter, after Obama agreed to extend Bush’s tax cuts for the rich, calls for organizing a primary challenge in 2012 gained attention. Now there is a growing chorus for this among liberal commentators and within the Democratic Party. The Progressive Caucus of the California Democratic Party – the biggest party caucus both nationally and in California – passed a resolution endorsing a primary challenge to Obama.

While any open challenge to the corporate leadership of the Democratic Party would be a welcome breath of fresh air, the strategy of organizing a primary challenge is a dead end. As Dennis Kucinich and numerous others have already proven, there is no genuine democracy inside the Democratic Party. With corporate media and Wall Street funding backing them up, the party leadership would snuff out any left primary challenge, and the question would be posed: Who do we vote for in the general election?

Unfortunately, unless the ground is explicitly prepared to build a truly independent working-class political alternative, the workers and youth who rallied behind a left primary challenger would face the same old demoralizing, demobilizing “choice” of voting for the lesser evil.

Which Way Forward?

The Democratic Party has nothing left to stand on. Its leaders have shown that they are prepared to shred the social safety net, content that they can use the extreme right wing of the Republican Party as political cover. Prominent blogger Glenn Greenwald lays out the calculations of the Democrats in this way:

Mark Mellman, a Democratic pollster, said polling data showed that at this point in his term, Mr. Obama, compared with past Democratic presidents, was doing as well or better with Democratic voters. “Whatever qualms or questions they may have about this policy or that policy, at the end of the day the one thing they’re absolutely certain of – they’re going to hate these Republican candidates,” Mr. Mellman said. “So I’m not honestly all that worried about a solid or enthusiastic base.” In other words: it makes no difference to us how much we stomp on liberals’ beliefs or how much they squawk, because we’ll just wave around enough pictures of Michele Bachmann and scare them into unconditional submission, (, 7/31/11).

Growing numbers of working people are realizing that there is no alternative but to fight; no alternative but to stop waiting for bought-off politicians to do the right thing and to start organizing a national movement against these measures. There need to be immediate calls for mass protests and direct action.

Crucially, we need to organize a decisive break with the Democratic Party. That means no support for the Democrats in the 2012 elections. No money, no door-knocking, no phone-banking. At minimum, the unions and all social movements should immediately cut off all funding for the Democrats. The International Association of Firefighters has already cut off funds for all federal candidates.

We don’t need to help Wall Street elect either one of their two parties. We need to build one of our own. We need to build an anti-corporate, working-class political alternative that fights in the streets, workplaces, campuses and neighborhoods – and in the elections, as well. We should begin now, while this debacle remains fresh in the minds of millions, to prepare to run independent, working-class candidates in the 2012 elections who will firmly stand against all cuts and concessions, and for taxing the rich, fully funded jobs and services, ending the wars and slashing the Pentagon budget, single-payer health care, and other core working-class policies.

The unions have the organizational apparatus to mobilize a massive national demonstration, but they refuse to risk embarrassing the president or the Democratic Party. They field tens of thousands of volunteers and spend hundreds of millions of dollars each election to support the Democrats, but this money could, instead, be put behind building a real working peoples’ party, behind independent labor-left candidates who refuse corrupting donations from big business.

Unfortunately, for all intents and purposes the AFL-CIO and Change to Win have been silent on this whole debacle. AFSCME president, Gerald McCentee, expressed some worry about the bill’s effects but “did not announce opposition to the agreement negotiated by President Obama, and several other labor groups, including the AFL-CIO, were notably silent in the hours leading up to votes Monday in the House and Senate.” In a July 29 AFL-CIO statement which quotes numerous union presidents, there is not a single word of criticism directed at Obama and the Democrats.

The only national union pointing a way forward is the National Nurses Union. See their August 1 statement:

“What this latest deal does is make those who vote for it a full partner in the discredited theory that our economy is in free fall because of public spending on programs that help people, and kicks the can further down the road on real solutions that are needed to promote genuine recovery,” [executive director, Rose Ann] DeMoro said.

“It’s time for Congress to stop pandering to economic elites, who fund their campaigns and continuously lobby to protect their vested interests. We will see them in their districts until they become champions of Main Street, not Wall Street,”

This statement poses the need to organize a massive fight-back against the relentless regime of budget cuts on working-class people. The labor movement can play a crucial role. There is an important window of time between now and when the super committee’s proposals are due in November to organize the broadest possible resistance against cuts to the New Deal programs. Mass protests and direct action – including coordinated strike action – should be organized around the following demands:

  • Repeal all the cuts in the debt deal that fall on ordinary people. Hands off Social Security, Medicare and Medicaid. No cuts at all on workers, retirees, the poor and social services.
  • End all the wars and slash military spending.
  • Enact massive taxes on Wall Street, big business and the very rich.
  • Pass single-payer health care to save hundreds of billions of health care dollars now wasted on wild-eyed health industry profits and unaccountable private bureaucracies.
  • Create a massive jobs program of public works to solve the unemployment crisis. Rebuild the nation’s infrastructure, schools and community health centers. Develop green energy and mass transit.

Every union local, central labor council and national union leadership body should take up resolutions calling for action supporting these demands. The unions should unite with the broadest layer of workers, poor, retirees and young people in democratically run coalitions to organize the fight-back in every area. A monster demonstration on the White House and Congress in the fall could have a major effect if backed up by a series of escalated actions.

These protests and actions should prepare the ground to organize for independent anti-cuts, pro-labor candidates to compete with both parties in the 2012 elections and lay the groundwork for a decisive mass break from the Democrats. Unless working people get organized – both in the streets and in the electoral arena – the attacks are just going to keep coming. With anger at Obama, the Democrats and the entire corporate political establishment at an all-time high, now is the time to act!

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