Obama takes care of business

January 4, 2013

Any challenge to the bipartisan austerity policy will have to begin at the grassroots.

YOU DON'T have to be a socialist to see that Barack Obama has used the "fiscal cliff" tax deal to once again stiff workers, coddle the rich and further the corporate agenda.

Here's the New York Times on the agreement with Congressional Republicans that made the Bush-era tax cuts for the rich permanent on income less than $450,000 per year, while raising taxes on all working people by ending the payroll tax break:

Just a few years ago, the tax deal pushed through Congress on Tuesday would have been a Republican fiscal fantasy, a sweeping bill that locks in virtually all of the Bush-era tax cuts, exempts almost all estates from taxation, and enshrines the former president's credo that dividends and capital gains should be taxed equally and gently.

Nowadays, though, the deal is being sold by liberal Democrats as "progressive," with all but three Senate Democrats voting in favor of it. When a majority of House Republicans rejected the agreement, complaining that it didn't include spending cuts, it was Democrats who backed it overwhelmingly, assuring its passage.

President Barack Obama
President Barack Obama

AFL-CIO President Richard Trumka criticized the fiscal cliff deal as it emerged in the final days of 2012. But he soon changed his line, praising the agreement for sparing Social Security and Medicare from cuts and extending unemployment benefits:

The agreement passed by the Senate last night is a breakthrough in beginning to restore tax fairness and achieves some key goals of working families...A strong message from voters and a relentless echo from grassroots activists over the last six weeks helped get us this far.

In fact, as Trumka acknowledges, Social Security and Medicare are still on the chopping block. The $1.2 trillion in automatic spending cuts that were set to kick in on January 1 have only been postponed for two months. Plus, the Republicans will use the coming vote on raising the limit on federal borrowing--known as the "debt ceiling"--to demand more cutbacks.

So another showdown is coming up in a matter of weeks--one in which Obama can be expected to make yet another deal with Republicans, this one potentially including cuts to "entitlement" programs. Obama can also be expected to claim that he is "saving" Social Security and Medicare by preventing even bigger cuts demanded by Republicans--even as the man who promised during the presidential campaign to defend these programs signs off on drastic reductions.

If that sounds like a conspiracy theory from the far left, take a look at the record. Obama already offered just such a deal to Republican House Speaker John Boehner during the 2011 debt ceiling debate.

LIBERAL CRITICS seem to think Obama's problem is that he is a bad negotiator in the face of intransigent Republicans. "The president remains clueless about how to use leverage in a negotiation," Adam Green of the Progressive Change Campaign Committee told the New York Times.

In reality, the Obama administration represents the consolidation of a rightward turn in the Democratic Party that began in the 1980s and was furthered by Bill Clinton in the 1990s. From the surrender to Ronald Reagan's tax policies to Clinton's program of free trade and deregulation, the Democrats are making a bid to replace the Republicans as the main party of Corporate America.

With the Republican Party firmly in the grip of the hardline conservatives and committed to increasingly unpopular social policies, business knows it can turn the Democrats--and count on them to, well, take care of business. As historian Van Gosse put it, "The mass party of the center, birthed 20 years ago by Bill Clinton...has been brought to fruition by Barack Obama's savvy Chicago apparatchiks."

That point was underlined by conservative Bruce Bartlett, an economist who served in the White House under George Bush Sr.: "[T]he nation no longer has a party of the left, but one of the center-right that is akin to what were liberal Republicans in the past--there is no longer any such thing as a liberal Republican--and a party of the far right."

Bartlett underscored his point with a quote from Obama himself, made in a post-election interview with the Spanish-language TV network Univision: "The truth of the matter is that my policies are so mainstream that if I had set the same policies that I had back in the 1980s, I would be considered a moderate Republican."

Remember that the next time you hear someone criticize Socialist Worker for being "ultra-left" when we point out how few differences exist between Democrats and Republicans.

But the Democrats didn't just become a pro-business party in the last 30 years. They have always been what conservative author Kevin Phillips called "history's second-most enthusiastic capitalist party."

The Democrats only acquired the pro-worker reputation they have today in the 1930s and 1940s because of President Franklin Roosevelt and his "New Deal" policies. But Roosevelt was compelled to make concessions to labor as a result of the great social upsurge of the 1930s. Similarly, in the 1960s the civil rights struggle and other social movements compelled Democratic President Lyndon Johnson to push for Medicare and expand social spending.

Today, however, organized labor is a shadow of its former self, representing less than 12 percent of workers. The social movements of the 1960s have receded, often replaced by Washington lobbying groups that claim to speak in their name. Neither Clinton nor Obama has faced serious pressure from the left as they embarked on pro-business policies.

As a result, Obama has had a free hand to shape a pro-corporate agenda. And U.S. capitalists, despite having heavily backed Mitt Romney in the elections, are now happy to have the president implement policies that would invite revolt if advanced by a Republicans.

The outlines of Obama's policy are clear. It is to revive the U.S. economy on the basis of low wages, sharply reduced social spending and cheap energy from fracking and heavy oil. And if that isn't enough to entice major corporations to move jobs back to the U.S. and ramp up investment, the White House has signaled that it is willing to cut corporate taxes for businesses willing to move their $5.1 trillion overseas cash hoard back to the U.S.

Obama has already found ways to accommodate business with low taxes--far below the nominal 39.2 percent rate in state and federal taxes. According to the Office of Management and Budget, corporate income tax brought in revenue equivalent to just 1.2 percent of the gross domestic product in 2011--less than half of the level of 2007, which itself was half the level of the 1950s.

In fact, the fiscal cliff deal includes more than $200 billion in corporate tax breaks and credits, as Matt Stoller pointed out at Naked Capitalism.

WHAT ALL this means for the left is straightforward. If there is going to be a challenge to the bipartisan austerity policy in Washington, it will have to begin at the grassroots.

The potential is there. The Wisconsin uprising of winter 2011 showed the potential for a mass labor struggle to galvanize widespread social support, even if union leaders threw away the chance to raise the stakes and turned towards a failed electoral strategy. The Occupy Wall Street movement of fall 2011 showed that the fighting spirit of Wisconsin had spread nationally.

Last fall, the Chicago teachers' strike demonstrated that union members could take a stand and win the support of working people to defend their jobs and public services. Since then, strikes by workers at Wal-Mart and other low-wage employers have resonated with everyone who's working harder for less.

The challenge now is to link these struggles with a wider effort to build solidarity and advance the interest of working people--whether in a local strike or protest or as part of a national campaign to defend Social Security and Medicare.

The plan in Washington and the corporate boardrooms is plain to see. Workers are expected to endure a deep and permanent cut in their standard of living while those at the top of society enjoy even greater wealth in power.

To resist that attack, working people will have to take a stand for themselves.

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