Wall Street: 100; Workers: 0. This is the scorecard for the federal budget, which was based on a proposal submitted by the Budget Conference Committee. The bipartisan body, led by Republican Rep. Paul Ryan and Democratic Sen. Patty Murray, agreed to the austerity budget, which was then authorized overwhelmingly by the House on Dec. 11, and is on its way to the Senate.
The most striking and immediate element of the agreement is that, in another blow to jobless workers, there is no provision to extend federal unemployment benefits. This is devastating news for the 1.3 million jobless workers who will lose their benefits on Dec. 28, and the 3.5 million who are expected to need them next year.
The Bipartisan Budget Act of 2013 replaces $63 billion of the “sequestration” cuts scheduled for 2014 and 2015 in military and nonmilitary programs, which were codified in the Budget Control Act, with other savings measures. Among other provisions, it ups passenger airline fees, increases federal workers’ retirement contributions and reduces cost-of-living increases for veterans’ pensions. It sets “discretionary” funding for the next two years, but does not end sequestration cutbacks.
Additionally, a number of mandatory sequestration cuts remain in place, including payment reductions to Medicare health providers, which have been extended for two more years, and reductions in federal funding to aid families in crisis.
Who gains? Who loses?
The main question for any progressive person looking at this budget agreement is: Who gains and who loses? It is clear that more hardships are in store for workers and low-income communities, while Wall Street prospers.
What this bill does not provide is immediately noticeable — jobs. Nor does it propose any infrastructure building or repair programs, which would put people back to work.
The bankers, billionaires and millionaires fared quite well. Special tax breaks, like the loophole for offshore corporate profits, were not eliminated or even changed. Low capital gains taxes were not increased.
The Pentagon gets $20 billion restored in 2014 from sequestration cuts, with another $2 billion tossed into their coffers. To no one’s surprise, however, the Defense Department didn’t have to shrink its spending on bombs, drones and military occupations this year, as it received many one-time allocations, despite sequestration.
Funding is slated to increase from sequestration levels in 2013 for such discretionary programs as Head Start, Meals on Wheels and the Women, Infants, Children Nutrition Program. Pre-sequestration, these programs were slotted to receive $506 billion in 2014 and $520 billion in 2015. However, sequester cuts decreased these to $469 for the coming year and $483 billion for the year after.
The current bill would bring discretionary funding up to $492 billion in 2014 and the year after. However, these amounts are woefully inadequate to fund essential social programs, especially given inflation. To make matters worse, funding would be frozen at the 2015 level in following years.
The Center on Budget and Policy Priorities cautions that it will not be known until mid-January which programs would have any funds restored. The organization asserts that Head Start and housing aid for low-income families were severely hit by sequestration cuts, and should be funding priorities. Unlike the Pentagon, these and other social programs did not receive any one-time allotments in 2013 to make up for the deep cuts.
Egregious attacks on unemployed
This budget bill, which was approved by a House vote of 332 to 94 that included the majority of both Democrats and Republicans, with Tea Party reactionaries and some liberal Democrats voting against it, conspicuously omits extension of long-term unemployment benefits.
Heidi Shierholz, of the Economic Policy Institute, predicts that 12 percent of the labor force will be out of work in 2014 due to the weakness of the job market. She stresses that these workers will need unemployment benefits.
The EUC program was established to aid those who lost jobs during and immediately following the Great Recession. Government downsizing on federal, state and city levels in the last three years has caused more layoffs, and few jobs are still available. Sequester cuts have led to more job losses and reductions in unemployment benefits by states.
Officially, 7 percent of the workforce seeking work, or 11 million workers, is unemployed, but since millions more have left the labor force or have had to accept part-time jobs, maybe 30 million workers are underemployed or unemployed. Employers are not hiring the long-term unemployed, whose numbers are at a crisis level, the highest since World War II ended.
More cuts for federal workers
In another of the bill’s provisions inflicting more pain on the working class, higher pension contributions will be deducted from federal employees’ paychecks. The American Federation of Government Employees, which represents 670,000 workers, objects.
Union President J. David Cox stresses, “It is disgraceful for elected officials to think that they can raid a fully funded retirement system to pay down a deficit that federal employees did not create.” (Washington Post, Dec. 9)
Further, AFGE Local 374’s blog explains, “Federal workers have sacrificed over $113 billion for deficit reduction since 2011, including a three-year pay freeze, increased pension contributions for newly hired employees, up to eight furlough days caused by sequestration this summer, and a 16-day shutdown this fall.”
Moreover, the Murray-Ryan budget does not include funding for the Supplemental Nutrition Assistance Program. All food stamp recipients saw their benefits cut by 13 percent on Nov. 1. Now there are unofficial reports that the Senate Agriculture Committee is set to propose another devastating $8 billion in cuts.
Although Social Security was not touched this time, the federal retirement program is still endangered. The capitalist class has its sights set on undoing this program, and would like to raid the Social Security Trust Fund, which belongs to the workers.
The very wealthy, who are raking in record profits and whose incomes are soaring, are demanding even more sacrifices by workers and low-income communities. The austerity budget is not just an obsession with reducing budget deficits, but it aims to transfer even more of the workers’ hard-won salaries and benefits to the superrich.
These capitalists expect their representatives in Congress to do their bidding — to impose austerity policies while enabling the super rich to continue accumulating gargantuan wealth unencumbered by taxes or restrictive laws or policies.
National Nurses United President Jean Ross, RN gave the following valuable response to this bipartisan debacle on Dec. 11: “Austerity budgeting, reflected in the latest deal, continues the disturbing focus by politicians in both parties in Washington, who should be fighting for jobs at living wages, restoration of the disgraceful cuts in food stamps, health care for all, housing assistance, and other human needs, not simply how to please Wall Street and the banks.”
It is time for a united fightback of all progressive forces, labor unions, community and retiree organizations. It is time to go to Washington and insist that Congress stop the horrific attacks on workers — organized and unorganized, the unemployed, and low-income and oppressed communities.