January 2013, Week 2


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Sat, 12 Jan 2013 11:51:51 -0500
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"Fiscal Cliff' Bridged but Threat to Working People's
Welfare Still on Track

By Carl Bloice - Black Commentator Editorial Board
January 10, 2013


The wealthy are joining hands without regard to
political affiliation to cut benefits that enjoy broad
bipartisan support among everyone who is not
rich."The deal that the Obama administration struck
this week with Congress to avoid sending the
country over this so-called fiscal cliff did little more
than push the tough bargaining off for another day,
when the stakes may actually be higher," the Los
Angeles Times said editorially last week. That
qualifies as an understatement. What happened in
Congress soon after the ball fell in Times Square
settled? Very little. It meant only that we could
watch the rest of the endless Bowl games without
constantly switching channels to check on the
speed of our fall into the abyss.

Yes, the reactionary right Republicans suffered a
setback but it's not that uplifting when you consider
that people earning $50,000 a year will pay about
$1,000 more in payroll taxes this year. That's
because the "deal" hatched last week on Capitol Hill
means payroll taxes are going up and over three
quarters of the country's working people will
experience a decline in their take home pay this

Yes, expanded unemployment benefits will be
extended in hard hit states but that seems like the
least the knuckleheads could do.

All in all, 2013 is shaping up as a year of
precariousness for the nation's working people,
seniors and the poor. The threats of last year are
being carried over and the stakes are indeed higher.

"Once more, Washington is fixated on what and how
to cut," Robert Borosage wrote last week on the Our
Future blog. "Once more, the media is clamoring for
a deal, for `shared sacrifice.' Once more,
Republicans have indicated that they are prepared
to hold the full faith and credit of the United States
hostage to exact deep cuts in spending, with Social
Security, Medicare and Medicaid their primary
targets. Once more, the president has indicated that
he wants more deficit reduction, with a `balanced'
program mixing spending cuts with tax hikes."

It is important to keep in mind what is at stake

A couple of days into the New Year, Washington Post
columnist David Ignatius harshly excoriated
President Obama for unwisely playing "a poker game
of incremental bargaining" with an incompetent
House Speaker John Boehner. Nothing new here.
Numerous critics at both ends of the political
spectrum have registered the same complaint.
What's notable is the policy content of Ignatius's
complaint. That is: the President didn't come
forward with his own "grand bargain," he didn't
embrace "Simpson-Bowles." More specifically he
didn't offer cuts in Social Security. "It's Obama's job
to lead the party toward entitlement reforms and
other policies that will be painful but necessary," he
wrote. Beware of overemphasis on Obama's style of
operation. It's cover for the real beef: that the
tycoons of Wall Street, and the Washington elite that
front for them, haven't secured what they want - so

"It has become standard practice in Washington for
Wall Street types and other wealthy interests to
finance groups to push their agenda," economist
Dean Baker wrote last week. "The Campaign to Fix
the Debt involves the CEOs themselves directly
stepping up to the plate and pushing the case for
cutting Social Security and Medicare as well as
lowering the corporate income tax rate."

2013 is shaping up as a year of precariousness for
the nation's working people, seniors and the poor.
The threats of last year are being carried over and
the stakes are indeed higher."It's clear what's going
on here," continued Baker. "We don't need any
conspiracy theories. CEOs from both political parties
have openly come together to demand cuts in Social
Security and Medicare, two programs that enjoy
massive political support across the political
spectrum. The wealthy are joining hands without
regard to political affiliation to cut benefits that
enjoy broad bipartisan support among everyone who
is not rich."

The Financial Times concedes that, "On political
grounds, Barack Obama got the better of a mediocre
bargain," one that, however, "averts calamity for the
time being, but only at the expense of setting up a
potentially even more explosive showdown two
months from now. During that time, the paper says
the President "must persuade Republicans to avoid
triggering a sovereign default." And, he "will need to
make a serious offer of reforming entitlements,
notably Medicare and Social Security."

"Smarting from the president's victory on taxes over
the New Year's holiday, Republicans in Congress are
betting that their refusal to raise the $16.4 trillion
debt ceiling will force Mr. Obama to the bargaining
table on spending cuts and issues like changes in
Medicare and Social Security," Michael Shear and
Jackie Calmes wrote in the New York Times last
week. Financial Times Washington bureau chief
Edward Luce offered this disquieting prognosis: "If
there is a silver lining to all of this, the next
showdown will offer Mr. Obama a chance - albeit
slim - of knocking fiscal brinkmanship on the head
for the remainder of this Congress. If he can
accomplish that, he will gather impetus to pursue
his priorities, including immigration reform and
action on global warming. But it would be very
unwise to bet on it."

The paper's editors chimed in with another rather
pessimistic view of what could transpire in
Washington over the next two months. "The White
House won several victories in the fiscal-cliff
package, but its eagerness for a deal disappointed
many who believed the president's promise to raise
far more revenue," they wrote. "It is hard to see how
he avoids giving in to Republican demands, as he
was forced to do in 2011."

"These are reasonable trade-offs, as the president's
own Simpson-Bowles commission pointed out," said
the paper. Of course, that's not true but it's probably
useless to once more point out that the commission
never issued any report or made any
recommendations. Obviously the people who would
cut back the livelihoods of seniors in the name of
"deficit reduction" intend to repeat that falsehood

The "deal" hatched last week on Capitol Hill means
payroll taxes are going up and over three quarters of
the country's working people will experience a
decline in their take home pay this year."To make
sense of what just happened, we need to ask what
... are the two sides really fighting about? Surely the
answer is, the future of the welfare state. ... The
right wants to roll the clock back to 1930, if not to
the 19th century," says economist Paul Krugman.
"There are two ways progressives can lose this
fight," he wrote. "One is direct defeat on the
question of social insurance, with Congress actually
voting to privatize and eventually phase out key
programs - or with Democratic politicians
themselves giving away their political birthright in
the name of a mess of pottage Grand Bargain. The
other is for conservatives to successfully starve the
beast - to drive revenue so low through tax cuts
that the social insurance programs can't be

"If Obama stands his ground in that confrontation,
this deal won't look bad in retrospect," wrote
Krugman. "If he doesn't, yesterday will be seen as
the day he began throwing away his presidency and
the hopes of everyone who supported him

"Although it does not do as much as I want, this bill
does ensure that the wealthy will be contributing
more as we work to bring our deficits under control,"
said Sen. Jeff Merkley (D-Oregon) after the House
vote. "I far prefer that choice to further cuts to
education, law enforcement, and investments in the
infrastructure our economy depends on. But let's be
clear: this deal carries great risks as well. This deal
sets up more cliffs in the near future, including the
expiring debt ceiling and the sequestration, pre-
planned cuts to programs essential to working
families. And as before, there will be some who use
these cliffs to launch renewed attacks on Medicare
and Social Security. We cannot let those attacks

"The `fiscal cliff' deal was not all bad," says the
progressive advocacy group Roots Action. "Social
Security and Medicare weren't cut. Unemployment
benefits were extended. Taxes went up a tiny bit on
some of the wealthiest.

"But Pentagon spending remained outrageously
high, giveaways to corporations were enormous, the
President went back on his commitment to end tax
cuts for more of the wealthiest, the deal raised taxes
on people making $20-200K per year more than on
those making $200-500K, and the debt ceiling limit
remained -- setting up a big push to cut Social
Security and Medicare in the coming months."

"We must now work to take the focus off the deficit
and put it on jobs and smart public investment"
says Roots Action. "That means moving the money
away from war preparations."

Roots Action has begun to circulate a petition titled
"Jobs Not Wars." Click here to sign the petition.

So far, "Fix the Debt," the group spearheading the
drive to slash Medicare and retiree benefits, "has got
fawning media coverage from outlets like the Wall
Street Journal and CNBC," wrote Mary Bottari,
director of the Center for Media and Democracy's
Real Economy Project. "Watch as [Erskine] Bowles
and Alan Simpson (`"fiscal hawk icons" according to
Politico) take to the airwaves today to `tisk tisk' the
President for not slashing enough from social
programs relied on by millions of Americans.

"Washington missed this magic moment to do
something big to reduce the deficit, reform our Tax
Code and fix our entitlement programs," Bottari
quoted would be entitlement slashers Bowles and
Simpson as saying. "The Fix the Debt `magic' means
painful austerity for the rest of us,' she continued.
"They are ready for the battle ahead, are we?"

BlackCommentator.com Editorial Board member
and Columnist, Carl Bloice, is a writer in San
Francisco, a member of the National Coordinating
Committee of the Committees of Correspondence for
Democracy and Socialism and formerly worked for a
healthcare union.

Other Carl Bloice writings at:


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