Austerity ahead

Bipartisan Sequester Holds Workers Hostage to Austerity

Austerity aheadThe big bad wolf has finally arrived—and he has very real teeth. After weeks of political maneuvering and cynical finger-pointing, the “unthinkable” has become the “inevitable.” $85 billion in automatic spending cuts will now begin raining down on American workers, children, the elderly, and the poor. That it has come to this should come as no surprise. Despite the honest illusions many had in Obama, his real agenda was always clear. As we explained in the days after his reelection:

“Ordinary Americans think they have given him a mandate to implement a wide range of progressive reforms. But he is in the pocket of big business. That is his real mandate. He is no longer even nominally ‘accountable’ to the voters, as he cannot run for reelection in 2016. He is accountable only to the rich and powerful who really control this country. His role is to act on their behalf to ram through the cuts one way or another, in one form or another…”

“The so-called ‘fiscal cliff’ is fast approaching. In plain English, this is a series of automatic tax increases and spending cuts scheduled to take effect on Jan. 1 unless Congress comes up with an alternative. This scenario was the result of a bipartisan Congressional compromise reached last summer. Some economists estimate that if these measures are implemented, GDP could drop by as much as 4%. Many now believe yet another grand compromise will be reached before the deadline, to kick the problem even further down the road. But the cuts are going to come eventually. The only question is how deep and who will be most affected…

“Obama’s promise to ‘balance the budget’ and ‘cut the deficit’ is thinly veiled code for ‘cuts in social programs’ and ‘austerity.’ ‘Hard decisions” and ‘economic patriotism’ mean the workers must tighten their belts while the rich grow fat on profits. Gridlock will be the excuse, and “compromise” the watchword of the day. Obama and billionaires like Michael Bloomberg are big fans of compromise and bipartisanship. As Bloomberg put it in his endorsement of Obama: ‘Of course, neither candidate has specified what hard decisions he will make to get our economy back on track while also balancing the budget. But in the end, what matters most isn’t the shape of any particular proposal; it’s the work that must be done to bring members of Congress together to achieve bipartisan solutions.’

Bipartisan“The definition of ‘bipartisan’ is ‘of, or relating to both parties,’ in this case, the Democrats and Republicans. As both of these are capitalist parties, it follows that any and all ‘bipartisan’ policies will favor the capitalists and their system. The only ‘new deal’ the Democrats will offer is one with the Republicans that includes deep cuts and austerity. Obama has already begun preparing his supporters for the ‘bitter pill’ he is about to deliver: ‘As we move forward there are going to be new wrinkles and new frustrations, we can’t predict them yet. We are going to have some triumphs and some successes, but there are going to be some tough days, starting with some of these negotiations around the fiscal cliff that you probably read about.’ And again: ‘We face a very clear deadline that requires us to make some big decisions on jobs, taxes and deficits by the end of the year. I believe that we have to continue to take a serious look at how we reform our entitlements, because health care costs continue to be the biggest driver of our deficits.’

“Obama’s calls for ‘national unity’ are in reality a call for the working class to subordinate its interests to the interests of the bosses. “Compromise” means “cuts.” We should not be taken in by these hollow appeals to unity! The desire of ordinary Americans for unity in times of crisis is natural and understandable. But there is only one form of unity that offers a way forward for the majority: workers’ unity against the unity of the bosses.”

With the fiscal cliff averted at the 11th hour at the end of last year, we followed up our analysis in the editorial for Socialist Appeal 72: “The recent rotten-egg-of-a-deal on the debt and ‘fiscal cliff’ will only add to the immiseration and intensify the contradictions. The automatic cuts have only been postponed for a few weeks, so we will be treated to another farcical ‘showdown’ between those who want cuts now and those who want cuts gradually. One way or another, billions of dollars in painful cuts are coming. Social Security, Medicare, Medicaid and more remain on the chopping block.”

The effects will be disruptive and devastating. Millions of Americans depend on government services and programs. As Niraj Chokshi from the National Journal put it: “If you like to fly, are an educator, have kids in school, work for the federal government, are poor, or simply participate in the economy (i.e. anyone), sequestration could impact your life.”

Sorry We're ClosedThrough no fault of their own, millions of able and willing American workers remain unemployed, several years into the “recovery.” Older workers in particular are more likely to be unemployed for extended periods of time. The long-term unemployed will be among the hardest-hit by the sequester, with benefits for 3.8 million Americans to be cut by an average of $400 per month. In addition, funding for job centers will also be cut, making it even harder to find a job in an already desperate situation. Stephen Fuller of George Mason University estimates as many as 2.14 million jobs could be lost in total, pushing unemployment up by as much as 1.5% more. Another economist estimated that over 700,000 workers will lose their jobs by the end of this year alone. At the same time, up to 125,000 families will lose federal housing assistance aid.

The Department of Education Budget will be slashed further, setting up more children, teachers, and schools for failure—and subsequent privatization. School districts across the country would lose millions in desperately needed funding. As many as 1.2 million students will be affected and as many as 30,000 teachers will lose their jobs. $598 million will be cut from special education programs. As usual, low-income families would be hit even harder. Some 70,000 children would be forced out of Head Start, which helps children up to age 5 prepare for school, one of the most successful and cost-effective federal programs in history.

Public health expenditure will also be gouged. Hundreds of thousands will lose access to basic primary and preventive care, such as flu vaccinations. Over 350,000 will lose access to mental health treatment, at a time when mass shootings are becoming commonplace. Medicare will be cut by “only” 2%. A report by the American Hospital Association, the American Medical Association, and the American Nurses Association estimates that that this alone could lead to the loss of 766,000 health care jobs, never mind the effects on public health.

Cuts at the Federal Aviation Administration Transportation Security Administration will lead to long lines and delays at the airports. As many as 100 air traffic control towers may be shut down altogether. Furloughs—compulsory unpaid “days off”—of 2 days per month for 47,000 air traffic controllers means a 10% cut in pay for these already highly stressed workers. TSA screeners will also be furloughed.

Food and workplace safety will also get short shrift. The Occupational Safety and Health Administration (OSHA) will lose 1,200 inspections of some of the country’s most dangerous workplaces. 2,100 fewer food safety inspections will mean shortages of meat  or possible outbreaks of contamination. An estimated 600,000 to 775,000 low-income women and children will be cut from the WIC food assistance program.

The Department of the Interior will also suffer major cuts, including $130 million in lost funding for Native American tribes, many of whom live in the poorest and most distressed conditions of anyone in the country. The National Park Service, one of the natural and environmental treasures of this country, will be affected as well, with cuts of $110 million slated to take effect. This will mean staff layoffs and furloughs, shorter hours, fewer campsites and hiking trails, and other service reductions. Even national icons such as Yellowstone and the Grand Canyon will be affected.

$42.7 billion is to be cut from the military budget. But instead of cutting down on wars, occupations, overseas bases, and the development of new and ever-more-deadly weapons of mass destruction, 800,000 civilian Defense Department employees are to be furloughed. Hundreds of other public employees, at all levels of government, face layoffs and furloughs, although they have already been forced to accept $103 billion in previous givebacks to reduce the deficit.

Hundreds of thousands of laid off and furloughed workers means billions of dollars not flowing into the economy. As Federal Reserve chairman Ben Bernanke was at pains to explain to Congress in his testimony earlier this week, all of this will place strong “headwinds” in front of the already anemic recovery, which after 4 years of unprecedented stimulus and cuts, is still unable to pick up steam. Only the billionaires and CEOs have benefited from the recovery. Bernanke’s proposed solution? To start with smaller cuts to smaller programs, then ramp up the major cuts to major “entitlement” programs. In other words: cuts are the only solution! This is the resounding chorus of the defenders of the “free market.”

If this all sounds “too bad to be true,” it’s not. This is the reality of life under capitalism at the beginning of the 21st century. This so-called sequester is an entirely artificial crisis. It can be traced to a deal Obama and Congress struck back in the summer of 2011. In exchange for raising the federal debt limit, Obama promised a series of spending cuts. In order to ensure that cuts negotiations were “serious,” a series of Draconian auto-cuts were put in place if another agreement could not be reached.

Now, riding high on his temporary second honeymoon, Obama says he wants to combine cuts with nominal tax increases on the rich and the closing of certain tax code loopholes. But as perennial gadfly reporter Bob Woodward points out, that was not his original proposal. Back in 2011, Obama implicitly agreed to these cuts, with no mention of “taxing the rich.”  Obama claims the across-the-board cuts were intended as an “incentive” for all concerned to negotiate more specific cuts. Neither Obama nor Congress ever expected it to come to this. Or did they? Both parties are for cuts. The only thing they disagree on is how much and how fast. Why not let impersonal “automatic” cuts do the dirty work?

Democrats blame Republicans. Republicans blame Democrats. Even if a deal could be reached, it would merely mean cuts in a different form. The end result is the same: the working class is being made to shoulder the burden of the capitalist crisis. As some wit once put it: “under the Republicans you have the exploitation of man by man; under the Democrats it’s exactly the opposite!” Both parties to blame. Above all, the capitalist system they are both sworn to defend is at the root of this situation. The entire “crisis” is intended to paralyze and disorient the workers in the face of this wholesale assault on the hard-fought gains of the past.

Trumka and ObamaAnd where are the labor leaders of the AFL-CIO and Change to Win in all of this? While opposing indiscriminate cuts and calling for increased taxes on the wealthiest 2%, they do not make a principled stand against any and all cuts, concessions, and givebacks, and instead accept that some cuts and some “shared sacrifice” may be necessary. Furthermore, they blame only the Republicans, and continue to sow illusions in the Democrats, when it was the Democrats who colluded with Republicans to put us in this situation in the first place.

There are no calls for mass marches on Washington, for work stoppages and workplace occupations to defend jobs and workplace safety, to resist furloughs and cuts. There is no break with the Democrats and no decisive movement toward the creation of a mass labor party. Strong words are fine things, but what the American working class deserves and requires, both inside and outside of the unions, are bold actions.

This round of cuts represents just the first spring showers of a torrential storm of bipartisan cuts and austerity the ruling class has prepared for the rest of us in the years to come. The $85 billion in cuts are for fiscal year 2013 alone. Another budget showdown, including the possibility of a government shutdown, is already slated for March 27, when current federal funding authority expires. The next federal budget, which begins October 1, will include even more austerity. As much as $1.2 trillion in potential sequestration cuts are on deck for the next 10 years. This is equal to 14 times the amount cut in this first round of cuts.

This “new normality” is an entirely irrational situation. As we have explained many times in the pages of Socialist Appeal, in a world of superabundance, it does not need to be this way. Only within the narrow constraints of capitalism are these cuts “inevitable.” This is not mere socialist propaganda. Over the last few decades, the material basis has been laid for an infinitely more rational way of organizing society. According to the U.S. Bureau of Labor Statistics, the average productivity per American worker has risen 400 percent since 1950. This means that in order to achieve the same standard of living, a worker today should have to work just one quarter of the average 1950 workweek, which works out to around 11 hours per week. Either that, or the standard of living should have risen by 4 times.

Instead, American workers work longer and harder than ever and the standard of living has steadily declined in real terms. According to the International Labor Organization, “Americans work 137 more hours per year than Japanese workers, 260 more hours per year than British workers, and 499 more hours per year than French workers.” But the benefits of all that extra work has not “trickled down” to the workers who actually create the wealth. Over the last 30 years, CEO pay has risen by 725%, while average worker pay has risen by just 5.7%. If the minimum wage had kept up with increased productivity of labor, it would now stand at $21.72 per hour. Instead, it remains at a miserly $7.25.

We say yet again: Make the rich pay for the crisis of their system! Not one layoff, not one cut, not one concession to the bosses and their government! Mobilize the power of the labor movement to fight back! Build a labor party based on the unions! Fight for socialism! We invite you to join us in this struggle.


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