Workers Vanguard No. 1031

4 October 2013


As Bosses’ Parties Squabble

U.S. Rulers Intensify War on Workers, Poor

OCTOBER 1—With many government operations shutting down, it will be the workers, the poor and the oppressed who will be hit the hardest. Propelled by the Republican House majority’s determination to choke off money for Barack Obama’s Affordable Care Act (ACA), the shutdown is resulting in the furlough of some 800,000 federal workers and threatens massive delays in Medicare and Social Security applications. And in just two weeks’ time, Congress faces the deadline to raise the federal debt limit, without which the government will default, stoking fears of a major economic tailspin.

Budget brinksmanship has been recycled over and over again. Most notable was the government shutdown of 1995-96 led by Republican Congressional leader Newt Gingrich. This redounded against the Republicans, helping propel Democratic president Bill Clinton to re-election the following year in the midst of an economic upturn. Polls show that the Republicans will again bear the blame as government functions grind to a halt. This has led Republican mouthpieces and strategists like the Wall Street Journal and Karl Rove to denounce the Tea Party types who spearheaded the shutdown for forfeiting any chance to recapture the White House and Senate in the near future.

More to the point, a major section of the capitalist ruling class is fed up that the government, which is their executive committee, is at an impasse. Some 250 groups representing major industry signed on to a letter saying that a shutdown risked disrupting the economy, i.e., their profits. Tomorrow, Obama is scheduled to meet with the CEOs of the country’s biggest banks at the White House as the debt ceiling deadline looms.

The Republican representatives of the capitalist class are stoked by their opposition to “Obamacare,” which they claim is unpopular with a broad swath of the population—and it certainly is. With its mandate requiring the uninsured to buy health insurance, the biggest beneficiaries of the ACA will be the profit-gouging health insurance giants as well as pharmaceutical companies. But that’s certainly not the Republicans’ beef. Wild-eyed declarations by their more unhinged elements that Obamacare amounts to “socialism” are merely an expression of opposition to any social program, from welfare to food stamps, perceived as providing government assistance to the working poor and unemployed. In racist America, the myth that social programs are a drain on the income of hard-working people has long been wielded by the rulers to direct popular anger away from them and toward black people and other minorities. Today’s far-right wackos are all the more incensed at the inexcusable sin of having a black man in the White House who isn’t the butler.

The Democratic Party representatives of the capitalist class in turn paint the Republicans as coldhearted scrooges who relish starving the poor and stomping on labor, black people and immigrants—and they certainly are. Before it was squashed by the Senate, the House passed a farm bill last month that would have cut $40 billion for food stamps over the next ten years, removing millions from a program that has grown during the years of recession to include nearly one-sixth of the country’s population. Up against those who would literally take the scraps off your table, all the Democrats have to do to appear as a lesser evil is breathe. If they need to do more to bolster that image, they can call on liberal populists like Massachusetts Senator Elizabeth Warren and NYC  mayoral candidate Bill de Blasio.

While U.S. imperialism’s Commander-in-Chief took a major political and diplomatic hit by backing down from the projected attack on Syria, he’s been all too successful in attacking the working people at home. Along with attacks on public employees and other unionized workers, Obama has repeatedly made clear his willingness to negotiate a “grand bargain” of massive austerity through slashing billions from Medicare, Medicaid and Social Security. When the ACA was passed in 2010, Democrats and Republicans agreed to cut some $700 billion from Medicare spending over the next decade. Those “savings” were supposed to finance Obama’s health care reform. Then came the “sequester” cuts when the two parties failed to reach a budget deal earlier this year. This kicked in a 5 percent cut in federal spending across the board, which both parties had agreed to beforehand. As a result, federal unemployment benefits have been cut by over 10 percent, while social programs like Head Start and Meals on Wheels are being depleted. Budget cuts will cost an estimated 900,000 jobs next year.

Affordable Care Act: Three-Card Monte

The government shutdown coincides with the beginning of enrollment for the health insurance exchanges at the center of the ACA. It’s doubtful that even those who drew up the law can make their way through its maze of terms and conditions. But some things are very clear. For many, especially those who choose the lower cost “Bronze” plans, the deductibles and copays are so prohibitive that coverage will be in name only. Twenty-one state governments concentrated in the former Confederacy have opted out of Medicaid expansion, forcing many of the working poor to purchase policies, often without any government subsidies. Undocumented immigrants are proscribed from receiving any of the ACA’s benefits. To cap it off, Obama issued an executive order reaffirming the Hyde Amendment, which denies the use of federal funds to pay for abortions.

As for those who will begin to receive employer-financed health insurance, don’t expect this to come without a hefty hidden price tag. This was highlighted by a study last year of the Massachusetts health care system introduced in 2006 under Republican governor Mitt Romney, which served as a model for the ACA. The study by the Boston-based National Bureau of Economic Research found that employers who were mandated to provide health insurance passed on essentially the entire cost to their workers in the form of wage cuts.

Embedded in Obama’s health care scheme is a multisided assault on gains wrested by the working class from the exploiters. First of all, the ACA imposes a tax, starting in 2018, on so-called “Cadillac” employer-paid health plans. (Actually, the tax will hit up to three-quarters of all employer-paid plans.) Unionized workers with decent health coverage—a key gain of labor battles of the past that has been under attack for years—now face the threat of massive cutbacks of those plans by bosses screaming even louder that they can’t afford the costs. Secondly, when the health care law comes fully into effect in January 2015, firms with 50 or more full-time employees will be required to offer “affordable” health insurance or pay a fine. So many of these companies are simply slashing work hours to under 30 per week.

Thirdly, the law threatens health plans sponsored by more than one employer, which are typically negotiated by unions in industries dominated by small businesses, such as construction, retail and restaurants. A major reason that workers in these industries are attracted to unions is the existence of such health plans—800,000 of the 1.3 million members of the United Food and Commercial Workers (UFCW) are covered in this way. Under the ACA, low-income workers covered by plans on the new health insurance exchanges will be eligible for federal subsidies. However, unionized workers covered by multi-employer plans will not qualify for subsidies. That whets employers’ appetite to drop coverage when existing collective bargaining agreements expire and put their workers on the exchanges. And by caving in to such attacks, the labor misleaders further undermine the unions.

In July, the leaders of the Teamsters, the UFCW and UNITE HERE, which organizes hotel and restaurant workers, sent a letter to the leaders of the Congressional Democrats, Senator Harry Reid and Representative Nancy Pelosi, protesting that the ACA will “shatter not only our hard-earned health benefits, but destroy the foundation of the 40 hour work week.” When a resolution calling for repeal of the ACA in its current form looked set to pass at the AFL-CIO convention on September 11, the White House strong-armed the labor bureaucrats into passing a watered-down resolution that simply called for changes to the law. Two days later, Obama called AFL-CIO president Richard Trumka and other union tops to the White House and told them that any idea of protecting multi-employer health plans was dead in the water.

In their letter to Reid and Pelosi, the union officials recalled their endless efforts and financial contributions to help elect Democratic politicians as well as their enthusiastic support to Obama’s health care law when it was initially proposed. What is needed is some actual labor struggle—including strike action—to fight the companies that are trying to steal workers’ benefits.

Working people and everyone else need free, quality health care—a demand that runs straight up against the profit-gouging corporations that are at the core of the U.S. health care system. The unions would find plenty of allies if they waged some hard class struggle for health care, for black and immigrant rights and access to free abortion and contraception. But such battles pose the need to replace the labor sellouts, who peddle the lie that the workers have interests in common with their exploiters, with a leadership committed to mobilizing workers power in opposition to the class enemy. What’s needed is to build a workers party that calls to expropriate the health care industries as part of the fight to overturn the capitalist order through socialist revolution.

Whom the Gods Would Destroy They First Make Mad

The liberal New York Times economics maven Paul Krugman speaks for a good section of the U.S. ruling class when he derides the Republican Party today as “the crazy party.” But there is a reason for the seeming madness.

In 1991-92, the U.S. and other imperialist powers achieved a decades-long strategic goal with the destruction of the Soviet Union—the world’s first workers state—through capitalist counterrevolution. The anti-Soviet campaign imposed a certain disciplined class unity between the Democrats and Republicans, whatever their particular policy differences. In the post-Soviet world, the U.S. bourgeoisie emerged as the unchallenged dominant power. But even as the U.S. achieved unrivaled military supremacy, its domestic industrial base has continued to corrode. To some in the haughty ruling class, the decline of the country’s economic might is bereft of any explanation—besides being contrary to “God’s will.” This section of the bourgeoisie found expression in the presidency of George W. Bush.

The capitalist rulers achieved a degree of national unity with their “war on terror” following the 9/11 attacks on the World Trade Center and the Pentagon. Later that unity was frayed as U.S. imperialism remained mired in the occupations of Afghanistan and especially Iraq. While slaughtering hundreds of thousands of those countries’ peoples, the U.S. rulers found themselves in a quagmire under the leadership of an increasingly discredited and deeply unpopular president. It was the task of the Obama presidency to extricate the U.S. from those occupations and focus on other world targets (like China) while continuing and extending the Bush administration’s attacks on democratic rights and living standards at home. But as the recent events around Syria show, extricating the U.S. from its Near East morass is not easy.

For five years the Obama administration has presided over increasing immiseration and cuts in social programs benefiting the poor, attacks on labor and women. When the big banks and auto companies faced crippling losses as a result of the 2008 financial crisis, they were showered with government subsidies to the tune of hundreds of billions of dollars. The 2009 contracts that the United Auto Workers bureaucracy helped force down the throats of workers at General Motors, Ford and Chrysler threw thousands of them on the scrap heap and slashed wages for new hires in half, opening the floodgates for further attacks on unions throughout the country. Today, the largely black and impoverished population of Detroit—the city ruined by the Big Three automakers and Wall Street banks—gets peanuts from Washington.

Nearly 47 million people—fully 15 percent of the U.S. population—are today living in poverty. The unemployment rate, which stands at 7.3 percent, has fallen incrementally in recent months, due almost entirely to workers taking part-time or poverty-level jobs or simply giving up on looking for work. Meanwhile, corporate profits last year, as a share of the economy, were the highest since World War II.

What Krugman and other liberals portray as the madness of the Tea Party Republicans is merely an extreme expression of the unbridled greed and arrogance of the capitalist ruling class. When Congress and the White House were wrangling over the debt ceiling two years ago, we wrote in “We Need an All-New Ruling Class—The Workers!” (WV No. 985, 2 September 2011): “Just as the decadent, crazed and corrupt court of the tsars was swept away by the Russian Revolution, we Marxists are determined to build the revolutionary internationalist party that can lead the workers in overthrowing the decaying rule of American capitalism.”