The financial crisis of 2008 left some of the major financial institutions teetering on the edge of bankruptcy and buried others. In a desperate attempt to hold the economy together, a bipartisan bill was passed to pump $700 billion dollars into the failing banks. But these were the same people who caused this crisis with wild speculation and the gambling away of huge sums of money on Wall Street. Essentially, the public was asked to pay the private debts of these rich bankers.
Fast-forward three years, and we see both Republicans and Democrats beating a steady drumbeat that we can forget about the faltering economy and high unemployment. What matters is paying off the national debt. But who owns the national debt? You guessed it: the same people who were bailed out in 2008. Private investors, mainly banks and billionaires looking to get rich off interest payments, own $9 trillion of the $13.5 trillion national debt.
When the debt ceiling crisis broke out this past summer, both parties once again prioritized the interests of these bankers. Instead of focusing on the dire needs of working people, they have made things worse by launching a savage program of cuts in essential programs like Medicare and Medicaid. Leading the charge was President Obama, who demanded that cuts to Medicare and Social Security be part of a $4 trillion bipartisan overall “debt-reduction” plan. Those discussions broke down over Republican insistence that there be no increase in taxes.
The bottom line is this: Both major political parties support an agenda of deep cuts, but neither party wants to take the blame for cutting popular programs. So, a deal needed to be cooked up. In August, both parties agreed to cut $2.5 trillion from the budget with no increase in taxes on the super-rich. Just under $1 trillion in cuts would take place immediately, and another $1.5 trillion will be decided on by the so-called Congressional “Super Committee.”
Super Committee
The Super Committee is especially undemocratic. Its members are not elected, but rather appointed from, and by, Congress, with six members from each party. They will have unprecedented power unique to any American legislative institution. On November 23 the Super Committee will decide where to cut this $1.5 trillion from the budget, a plan which they will present to Congress in the form of a bill. This bill cannot be amended, revised or filibustered, only passed or vetoed in an up-and-down vote by Congress. The bill will likely include cuts to Medicare, Medicaid, veterans’ programs and environmental protection.
If the bill doesn’t pass, $1.2 trillion in cuts will be triggered automatically. One half will be in domestic spending and the other half in military spending. The Super Committee has been meeting behind closed doors since mid-September, with no disclosures to the public. Their intention is to spring their plan on the public as late as possible, in order to reduce the time for angry protests to appear. This committee is nothing more than a bipartisan axe-man to inflict further pain on the working people who suffer the most from the financial crisis.
The fingerprints of both parties are on this deal. Democrats are throwing up their hands as if they had no choice. However, we need to remember that when they had the White House and a filibuster-proof majority in Congress, these same Democrats completely failed to curb corporate greed, end Bush’s tax cuts for the rich, end the expensive wars, or end the devastating pain inflicted on working people and the poor by this recession.
Contrast this to Occupy Wall Street, which has captured the imagination of millions by exposing the richest 1%. According to a recent CNN poll, 63% of Americans agree that any debt reduction in this bill should contain significant tax increases on the wealthy and big business. Instead of exposing the super-rich, Obama and the Democrats struck a deal with Republicans to begin dismantling essential New Deal programs that have been decisive in keeping tens of millions of working people and the elderly from absolute poverty. This shows where their priorities really lie: with Wall Street and the corporate funders who are now being lined up to pay for their election campaigns in 2012.
Just since their appointment, the Sunlight Foundation reports $83,000 in donations to Super Committee members. Contributors included Lockheed-Martin, Phizer, Chevron and Goldman Sachs. We need to expose this fraud of a Super Committee.
These upcoming historic attacks on New Deal programs will do nothing to solve the economic crisis. In fact, they will make it much worse. A key problem underlying this economic crisis is the lack of demand to buy goods, and the spending power of consumers makes up 70% of demand. Drastic spending cuts have only added to the depth of the capitalist crisis in Europe, and they would do the same here.
The problem is that the so-called “job creating” billionaires are hoarding their money instead of spending it to create new jobs. According to the Federal Reserve, U.S. corporations held a record $1.93 trillion in cash on their balance sheets in 2010. The myth that the rich are “job creators” is a lie designed to justify their wealth and to take advantage of the economic recession to slash essential social programs needed by working people and the poor.
Building Resistance
Socialist Alternative says we need to bail out working people, not Wall Street, the banks and the super-rich. Working people have lost over $6 trillion in fallen house prices, yet it is the rich bankers being bailed out. We demand an emergency plan for a massive jobs program to provide everyone with living-wage employment. We need an end to evictions and foreclosures. People should be allowed to stay in their homes and pay an agreed, affordable rent or mortgage.
We didn’t create this crisis and we shouldn’t pay for it. Wall Street and the big banks should pay; it’s their system, capitalism, that is failing. Instead of bailing out the rich bankers who own the national debt, we need to prioritize a massive federal jobs program to get the economy up and running again.
Socialist Alternative, uniting with unions, community groups and individuals, says: “Jobs Not Cuts!” We believe these demands are a first step in mobilizing broad layers of society to struggle against the two parties of Wall Street. We urge working people, young people and the poor to join these protests.
We need to spread the resistance into every workplace, college and community. This can help build a campaign for independent anti-cuts, anti-corporate, pro-worker candidates in 2012, which can be an important step to building a political party of the working class, a party that can defend working people against attacks from big business.
The Super Committee is supposed to present its recommendations on November 23. That’s why Socialist Alternative initiated and endorsed the Jobs Not Cuts campaign being organized for a national week of action November 16-23, to make it clear to Congress that we, as working people, demand:
Hands off Social Security, Medicare and Medicaid! No cuts to education and social services!
We need jobs, not cuts! Fund a federal public works program to create millions of jobs for the unemployed.
Make big business pay! For major tax hikes on the super-rich and corporations!
End the wars in Iraq and Afghanistan! Slash Pentagon spending!
Join us! We will be organizing in cities across the country for a national week of action from November 16–23. This unprecedented attack on social services that working families depend on cannot go unanswered! Sitting back and accepting the solution presented by the two parties of big business has gotten us only deeper in crisis, deeper in debt.
The actions in November will hopefully lay the basis for an even bigger period of struggle, beginning once the Super Committee announces its plans and before Congress votes on them on December 23. There is a determination to fight against corporate America, and this struggle can help prepare us for the ongoing battle against the top 1% and the politicians they control.
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