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Via Workers World News Service
Reprinted from the Jan.25, 1996
issue of Workers World newspaper
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Over the next seven years, the U.S. government is slated to spend about $10 trillion, give or take a few billion depending on whose budget gets passed.
At least $2 trillion will go to the Pentagon, the main conduit of money to the military-industrial complex. A comparable amount will directly enrich the banks and financial houses that hold the government's debt.
A growing sum will go to the repressive structure of the state: prisons, courts and agencies like the FBI and CIA. While schools and hospitals close, new jails will be built.
This reality is slowly sinking in, and many workers are doing a slow burn. They are noticing that while there's plenty of money for the Pentagon's Bosnia adventure, veterans' hospitals went begging for gauze and medicine during the recent government shutdowns.
The Clinton administration, buoyed by polls showing anger at the Republicans over the cuts and disruptions, has finally begun to posture as the defender of Medicare and Medicaid. But the bigger picture should not be lost:
Both capitalist parties have already agreed on the broad outlines of the budget cuts.
As Clinton himself says, the differences between them now are very small. This is due mainly to the administration having shifted way to the right, accepting the Republican premises that nothing but deep cuts in social services will stave off disaster.
Bill Clinton today is defending policies that would have seemed outrageously reactionary under Ronald Reagan and George Bush.
For a while, the Republicans felt they had to differentiate themselves from the born-again Clinton by threatening yet another government shutdown unless a budget was agreed to by Jan. 26. They weren't in the mood to consider raising the debt ceiling.
But, lo and behold, Gingrich and Company are now shifting their tactics. It seems it all has to do with something much less noble than conservative "values." It has to do with default.
The next interest payments will be due to government bondholders on Feb. 15. The right wingers were so puffed up by their own rhetoric on the budget that they failed to heed the voice of Wall Street until it became a public issue.
On Jan. 14, investment banker Felix G. Rohatyn wrote an opinion piece in the New York Times chastising the Republicans for raising the specter of a U.S. default: "After all, the Congressional Republicans have achieved the core of their Contract With America: a balanced budget in seven years, in accordance with Congressional Budget Office numbers. We should not, however, overlook another equally important contract--the contract with the holders of American debt and American currency. That contract cannot be broken."
Wall Street had spoken.
Rohatyn even used scary terms like "a global chain reaction" to describe what could happen if the U.S. government defaulted.
So on that same day, House Budget Committee Chair John Kasich said that, even without a budget compromise, Republicans probably would agree to raise the debt ceiling in order to avoid a government default. Their refusal to do so had caused the earlier shutdowns.
"You don't want to mess around with defaulting here in the United States," Kasich told reporters. A day earlier, House Speaker Newt Gingrich had said that Congress would "find a way to solve the debt ceiling."
Deprived of what they had considered their trump card, the Republican right is back at it again with Whitewater--a minor scandal at most, but something to keep the pot boiling. However, this too could turn around and bite them.
Sen. Orrin Hatch of Utah admitted as much on CBS' "Face the Nation" on Jan. 14: "I don't think the first lady should be subpoenaed under present circumstances. ... It would just make it a political fiasco."
The federal budget is deliberately made so complicated and convoluted that it actually may take a rocket scientist to figure out exactly where all the money goes. But some things can be stated very simply.
Ten trillion dollars--the amount to be spent over the next seven years--represents an enormous accumulation of value. That's value created by the labor of the working class but expropriated from the workers through various taxes. These taxes come out of the surplus value created by workers in the process of production.
But instead of being appropriated by each individual boss, it is seized by the collective instrument of the ruling class, the capitalist state.
Doesn't any of that money come from taxes on the rich?
Some. But they in turn got their wealth by exploiting workers. So in the end it all comes from the hard, hard work of more than 100 million people who leave their homes every working day and put in seven, eight or more hours for the boss before going home--so they can prepare to come in the next day and do it all over again.
The struggle between the Democrats and Republicans has been over that portion of the federal budget that goes for social programs--and only that. They agreed at the very beginning that little else would be touched.
And if a balanced budget is reached, it really won't be the millennium. The government will still have a debt of about $7 trillion. The interest on it each year will cost hundreds of billions of dollars.
The social programs now on the chopping block originally came out of the militant worker struggles of the 1930s, when the capitalist depression left millions facing starvation and homelessness. Around the world, the system was tottering. The rulers were driven irresistibly toward another world war to jump start their economy.
But workers everywhere were looking favorably at the planned economy in the Soviet Union. It was the only country not affected by the depression. Everyone there had a job.
In the United States, the greatest industrial giant of them all, workers' sit-down strikes and other militant tactics began putting the bosses on the defensive. There were some in the U.S. ruling class who were attracted to a fascist solution to the growing instability, as in Europe.
But the administration of Franklin D. Roosevelt, under the pressure of a vigorous mass movement, opted for a liberal program called the New Deal.
For the first time the capitalist government intervened to provide a "safety net" for those left stranded by the failure of the system. Social Security, unemployment insurance, welfare and other programs were the result. However, the economy didn't really turn around until war production began in earnest.
These social programs, begun in the 1930s and reinforced after the massive civil-rights movement of the 1950s and 1960s, have been under a sustained and frontal attack by Republican right wingers led by Newt Gingrich and Bob Dole.
President Clinton and the Democrats won't say straight out that these programs are needed because capitalism is once again leading to massive poverty and suffering. But they do fear the political consequences of cutting Social Security, Medicare, Medicaid, environmental protection, job training, school lunches, child care and so many other programs that keep workers from becoming paupers.
Even without knowing all the details of what will be cut in the years to come, it is already clear that this process will result in a vast shift of wealth from the poorer sections of the working class to the class of capitalists.
By and large, the workers are still depending on the Democrats to resist the cuts. Clinton at this point is hoping to use this to his advantage in the November election. He is trying to postpone the decision on exactly what will be cut from Medicare and Medicaid until after the election, calling it a "referendum on the budget."
However, there is also healthy skepticism about how much backbone the administration will show in the long run, given Clinton's record of caving in to reaction on so many issues already. A small but growing section of the workers' and progressive movement is taking independent action against the cuts, and these protests have the potential to become massive as the full pain of the capitalist program begins to be felt.
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