Millions of working people will see their income and jobs hit and important government services will be cut as “sequester cuts” start to go into effect. This reckless event, which could have been stopped by a simple majority vote, should be a wake-up call about how little the two dominant parties in Washington care about the needs and lives of working people.
The draconian sequester measure cuts $85 billion this year. According to The New York Times this would mean 600,000 cut off food stamps, massive cuts in education, millions seeing their already meager unemployment benefits cut 11% and a loss of 700,000 jobs. (www.nytimes.com/2013/02/24/us/politics/hard-budget-realities-as-agencies-prepare-to-detail-reductions.html?hp&_r=1&). Worse yet, if the measure is not repealed, similar automatic across-the- board cuts will be enacted in each of the next ten years!
How did this come about? Both Republicans and Democrats are, as always, engaged in the blame game but it was a thoroughly bi-partisan affair. The sequester automatic cuts were created by both parties in 2011 as an attempt to force each other to come to an agreement on cutting the budget. At the time, Republicans were threatening to shut down the government if Obama did not accept major budget cuts in exchange for raising the federal debt limit. Obama was trying to force Republicans to sign onto his “grand bargain” of budget cuts (including cuts to Social Security and Medicare) and tax increases. These bipartisan “sequester” automatic cuts now hang as an axe over the heads of ordinary Americans.
Budget cuts benefit the 1%
It should be no surprise that ordinary Americans are the ones who are targeted by cuts, rather that the wealth and income of the richest 1% who fund corporate politicians.
While Tea Partiers and other right wing Republicans are congratulating themselves on having created this budget-cutting monster, Obama and more sane Republicans are now looking to replace it by a broader budget-cutting deal. Possible benchmarks for a new budget package are March 27 (when a new appropriations bill needs to be passed) or in April (when the overall federal budget needs to be passed), or, even in June (when the national debt ceiling needs to be raised again).
While the behavior of Republicans is not surprising given their continued exertions to privatize Medicare and slash social spending for working people and the poor, the Democrats and Obama should not be let off the hook for creating this fiscal monster nor for their continued push for a “grand bargain” to cut Medicare and Social Security.
Former Secretary of Labor under President Clinton, Robert Reich, writes:
“What is the President’s response? He still wants a so-called ‘grand bargain’ of ‘balanced’ spending cuts (including cuts in the projected growth of Social Security and Medicare) combined with tax increases on the wealthy. So far, though, he has agreed to a gross imbalance – $1.5 trillion in cuts to Republicans’ $600 billion in tax increases on the rich.
The President apparently believes Republicans are serious about deficit reduction, when in fact the Tea Partiers now running the GOP are serious only about dismembering the government.
And he seems to accept that the budget deficit is the largest economic problem facing the nation, when in reality the largest problem is continuing high unemployment (some 20 million Americans unemployed or under-employed), declining real wages, and widening inequality. Deficit reduction now or in the near-term will only make these worse.” (www.huffingtonpost.com/robert-reich/sequestration-tea-party_b_2788453.html)
The real difference between these two parties is that Obama wants to push through the cuts more slowly in order to have the least effect on economic growth and to combine cuts with slightly increased taxes on the wealthy to make the cuts seem fairer. Republicans favor faster and deeper cuts on social programs benefiting working people and the poor, which apart from devastating the lives of millions of working people threatens to push the economy into a new recession. But, there are also splits in the Republican Party. To avoid an all out fight against the Tea Partiers at this point, the Republican leadership has allowed the sequester to go through in an attempt to appease the no-tax-increases ideologues in the House. This, despite the fact that half the cuts apply to their beloved, “sacred” military spending.
At present, it is hard to see how long the sequestration crisis will last as the conflicting cuts agendas of the two corporate parties are played out. The usual way in which the ruling elite pushes through unpopular pro-corporate policies, like the bank bailout of 2008, is by creating a bipartisan agreement allowing each party to escape sole blame. The resistance of the right-wing of the Republican Party to playing this game has led to the current debacle. What we can expect at some point is a rotten bipartisan deal, which, although it may serve some corporate interests and reassure bondholders here and internationally, will not be in the interests of working people or the poor.
As socialists we call for an immediate cancelling of the sequester cuts. We are opposed to Obama’s “grand bargain” of attacks on Medicare and Social Security. We call for an end to the whole agenda of budget cuts. Instead, we need a massive boost to the economy through a comprehensive green jobs program, increased taxes on the super wealthy and big business, and cuts to military spending.
We need to reject the myth put out by the corporate media that the dealing with the national debt is a priority. The vast majority of the national debt, $9 trillion, is held by private investors – mainly banks and billionaires. In 2010, U.S. taxpayers paid $415 billion in interest, most of which went to rich investors (U.S. Department of the Treasury, 11/1/2010). It is unacceptable at a time of mass unemployment, poverty, and home foreclosures for the priority to be protecting the debt of rich investors whose policies got us into this mess.
The corporate media claims that the country is broke and that everyone must tighten their belts. But working people have been tightening our belts for decades. The super-rich have not. The current deficit is the result of 30 years of shifting wealth from working people to the super-rich and big business.
Richest 1% Have Benefited
Since 1977, the share of national income taken home by the richest 1% of Americans doubled from 9% to over 20% today. The richest 0.1% – just 150,000 households – tripled their share of income, now earning as much as the poorest 120 million Americans combined. Thirty years ago, the average CEO made 30 times what the average worker did; today, top executives make 263 times more than the average worker (www.ips-dc.org/reports/executive_excess_2010).
In the 1950s, the highest income earners paid a tax rate of 91%, while today it is just 36%. But even this dramatically misrepresents the situation. The richest Americans earn far more from capital gains and dividends than salaries. So the effective tax rate of the richest 400 Americans was just 17% in 2007, down from about 30% in 1995 (Business Week, 4/7/2011). As Warren Buffett likes to point out, he pays a lower effective tax rate than the people who clean his office!
Our interests should not be to have to choose between Democratic Party cuts and Republican Party cuts. Instead of focusing on the national debt we should be focusing on how to end the despair and economic pain caused by a capitalist system in deep crisis. Over four years after the 2008 financial collapse, poverty and long-term unemployment are at historic high levels and the majority of working people are struggling to get by.
For Genuine Socialist Policies
What we need is a comprehensive jobs program that puts the tens of millions of unemployed workers back to work, that puts massive resources into retooling the economy in an environmentally sustainable way that provides the quality jobs and lives that working people need. With the capitalist system in deep crisis, both political parties are following different versions of the same big-business agenda. With capitalist system unable to rebuild the economy, any real improvement for working people will have to come out of the income and wealth of the rich a reality they resist tooth and nail.
We need genuine socialist policies to turn the economy and the country around, including public ownership of the big banks so that allocation of resources can be decided in the interests of the 99% rather the than the 1%. This should be part of socialist transformation of society.
Progressive-thinking workers, young people and activists must seize this opportunity of divisions in the two parties of ruling elite. Together, we can expose the sham of their “two-party” system and call for real anti-corporate pro-working class political alternative.
The only way we are going to turn this around is through bold initiatives backed by a mobilized public. This means organizing protests in the street, exposing the corporate agenda of both parties and running independent candidates for office who are committed to fight for working people and not corporate America and the wealthy 1%. That means turning our backs decisively on the corporate-funded Democratic Party that only offers us nice words, but betrays us once in office.
Socialist Alternative members will be organizing, on the ground, to help build the needed protests. We are also looking to provide a political alternative to the anger by running Socialist Alternative candidates for city council in Seattle, Minneapolis, and Boston this fall. We are calling on others on the left including the influential labor, civil rights, environmental, and anti-war organizations – to support our candidates and help build a broad, left electoral challenge to both parties in 2013 and 2014, as a step to building a new political party that can represent working people and the poor.