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November 6, the Labor Movement and “Operation Fiscal Cliff”: What Way Forward?

By National Committee of Socialist Organizer

On November 6, Barack Obama defeated Mitt Romney, taking eight of the nine swing states but winning the popular vote by a narrow margin. But unlike 2008, there were few, if any, outbursts of celebration in the streets this time around. The main sentiment was relief that the worst appeared to have been averted.

For most voters this election was more about stopping Romney-Ryan and their ultra-right-wing agenda than it was about supporting Obama. It was a vote to stop a Republican ticket hell-bent on privatizing Social Security and voucherizing Medicare, promoting union-busters such as Scott Walker in Wisconsin, rolling back women’s reproductive rights and LGBT rights, and scapegoating undocumented workers, among other points.

In a situation where the trade union leadership remains tied at the hip to the Democrats, funding the Obama re-election campaign to the tune of hundreds of millions of dollars and refusing to chart an independent political course for the working-class majority, the deep anger at four years of Obama’s anti-worker policies was channeled into “lesser-evilism” — a scourge that for too long has prevented the labor movement from creating its own political party and having its own political voice.

The lack of enthusiasm for Obama was also expressed in the voter turnout itself. Despite the increase in registered voters between the last two presidential elections, close to 8 million fewer votes were cast for Obama in 2012 than in 2008; in 2008 Obama received 69.45 million votes, in 2012 the figure dropped to 61.75 million votes. The Republican vote also dropped, from 59.94 million votes for McCain in 2008 to 58 million votes for Romney in 2012.

In 2012, many Latino voters were lured back to the Democratic Party by an 11th-hour promise by Obama of “deferred action” that would stay the deportation of a large number of undocumented immigrant youth (not without onerous conditions, however). Youth voters, including first-time voters, now represent 19% of the total voting population, and most of these votes went to Obama. In addition, Black voters were angered by the stepped-up drive by Republican governors to suppress their right to vote in state after state, creating a backlash of voters pledged to defend “a right won through blood, sweat and tears.” (Washington Post, November 9, “Perceived Suppression Tactics Inspired Black Voters”)

These voters, it turns out, took Obama over the top.

The Democrats also slightly increased their majority in the Senate and scored major gains in the states. In California, for the first time since 1933, voters gave the Democrats a legislative super-majority, which means they can now reach the two-thirds majority needed to overcome Republican filibusters, place amendments to the state Constitution on the ballot, and pass tax revenue laws.

The Republicans, however, retained control of the U.S. House of Representatives, largely thanks to extreme gerrymandering by the courts and Republican-controlled state governments.

National and International Dimension of Obama’s Victory

Obama’s victory was hailed by the political elites and financial markets the world over. While Mitt Romney had obtained the individual endorsements of leading CEOs in the United States, and while his fundraising efforts among the One Percent kept pace with those of Obama, Obama was viewed by the dominant wings of finance capital as their Number One choice when it came to safeguarding the interests of the capitalist class as a whole.

U.S. imperialism today is the focal point of all the contradictions of the world situation. U.S. imperialist domination over the entire world is gaining ground, but this is happening in crisis conditions that are constantly worsening. The root cause is the impasse of the regime founded on the private ownership of the means of production. On every continent, workers and oppressed peoples are rising up to challenge imperialism’s policies of war and exploitation.

For Wall Street, the City of London and other international financial markets, Obama was the best man to deal with the growing capitalist crisis.

On the international front, Obama was viewed as the best guarantor of imperialist interests because of his ability to expand the theaters of U.S. wars and interventions while posing — because of the support he receives from the U.S. labor movement and from labor officials the world over — as a man of peace. In his victory speech on November 6, for example, Obama stated that, “[a] decade of war is ending.” But this is far from true.

The U.S. occupation of Iraq continues in the form of U.S. mercenaries, advisers and military personnel to train the Iraqi security forces. The war in Afghanistan is also far from over, and there have been increased attacks, particularly with Drone bombings, of Pakistan. But this is not all.

During the election campaign, Obama affirmed that under his watch the United States would not rule out direct intervention in Syria and U.S. aerial bombing of Iran. In fact The New York Times reported on October 5 that Obama had pledged to Israeli President Netanyahu that U.S. bombing of Iranian nuclear power facilities could begin as early as June 2013.

At the same time, U.S. Secretary of State Hillary Clinton has just announced new threats of heightened intervention in Mali and other regions of Africa through Afrikom forces. If anything the arenas of U.S. wars are increasing, not decreasing.

On the domestic front, with a ballooning debt that is suffocating the economy, U.S. finance capital is focused on increasing its profit margins to ease market pressures. In this situation, there has been a split within the U.S. ruling class over how best to proceed in confronting the working class. One wing, bolstered by the Tea Party wing, has openly demanded that the government put an end to all labor rights and guarantees, smash the trade unions, and engage a more brutal offensive against the working class.

The other — majority — wing of the ruling class has opted for the Obama road of growing attacks on working people around the world, first and foremost U.S. workers, but by means of the co-optation of the trade union leadership.

“Operation Fiscal Cliff” and the “Grand Bargain”

From the very moment that Obama was re-elected, Wall Street and the corporate media staged a full-court press to urge Obama and Democrats to reach the “Grand Bargain” with the Republicans on tax cuts and the budget deficit before the end of the year. This was necessary, they insisted, to prevent the U.S. economy from “jumping off the fiscal cliff.” [For more on the Grand Bargain, see our sidebar article.]

The November 9 editorial of the San Francisco Chronicle put it this way:

“The challenges facing this nation — starting with an economic plan to avoid the coming ‘fiscal cliff’ — are going to require bipartisan support. … The onus is on Obama, as the freshly re-elected president, to take the lead in overcoming the polarization that has deeply divided our nation.”

The editorial went on to urge a compromise on an economic plan that would make deep cuts to the so-called “entitlements” while finding “innovative ways” to increase tax revenue.

Calling on Obama to address the deficit with “tough compromises” was like knocking on an open door.

In July 2011, about 10 days before the August 2, 2011, debt-ceiling deadline, Obama and Republican House Speaker Boehner announced that they had reached an agreement — the Grand Bargain — around a 10-year $4 trillion debt-reduction package that included $3 trillion in cuts and $1 trillion in new tax revenue. Obama and the top leadership of the Democratic Party made it perfectly clear that they were more than willing to make hundreds of billions of dollars in cuts to the nation’s safety-net programs … provided the Republicans were willing to pony up with some new tax revenue.

Six months later, Obama again pushed for a pared-down version of the Grand Bargain through the Congressional Super Committee headed by Republican Senator Alan Simpson and Democratic Party financial expert Erskine Bowles.

During the election campaign itself, Obama reiterated this pledge, telling a press conference in Ohio that he was “prepared to make a whole range of compromises” on budget-deficit reduction, even though this would rankle his own party. (Associated Press, October 24, 2012)

And in his victory speech on November 6 and in subsequent interviews and press statements, Obama again reached out to Republican House Majority Speaker John Boehner and the Republicans, insisting on the need to “make the difficult compromises to reduce our deficit.”

Obama’s intentions were never concealed — though you would never know this by reading the press or blogs of the AFL-CIO or SEIU, both of which chose to ignore this question as they spent huge sums and mobilized their members in countless get-out-the-vote campaigns to elect a candidate who had publicly pledged to dismantle the working class’s cherished social safety-net programs.

The Carrot and the Stick

But while Obama bent over backwards, offering to make significant cuts to Social Security, Medicare and Medicaid, the Republicans — despite support for the agreement from Boehner and from Arizona Senator John McCain — were unwilling to raise tax revenues in any manner as part of a deficit-reduction deal. This was the main reason for the impasse of the deal going back to 2011.

Obama could not have accepted the Republicans’ original condition — all cuts, no tax revenue — as the basis for reaching a deal. It would have appeared as an outright capitulation and could have led to a huge split in the traditional Labor-Liberal-Black coalition that has cemented the Democratic Party and been so pivotal to the rule of the capitalist class over so many decades.

Obama’s role on behalf of Wall Street and the transnational corporations — all of whom he bailed out at the beginning of his first term in office to the tune of close to $8 trillion, on the backs of working people — is to get the unions to swallow the corporate agenda’s bitter pills. And for that there had to be the semblance of “shared sacrifice.” For the ruling class, integrating the trade unions and its community allies into the Grand Bargain is absolutely key to its success.

The ruling class is well aware — perhaps far more so than many people in the labor movement — of the potential power of the U.S. working class and their unions. The ruling rich witnessed and assessed the powerful uprising in Wisconsin, the massive victory of the unions in the Ohio referendum, and the determined strike of the teachers’ union in Chicago.

They have taken stock, as well, of the massive working class uprisings in Tunisia, Egypt, Greece, Spain and elsewhere in response to the kinds of austerity measures that need to be implemented in the United States to fund their speculative appetites and shore up the falling rates of profit. They understand that cutting vital safety-net programs in the United States today — something which even the Republicans under Nixon and Bush Sr. and Bush Jr. dared not do — could provoke a similar uprising in the United States … unless the unions are fully house-tamed in advance.

“Neo-corporatism” — that is, the drive to co-opt and integrate the trade unions into accepting and implementing the corporate agenda — is still the main card of the U.S. ruling class. While sectors of the corporate elite have taken the path of seeking the outright banning and destruction of the trade unions — e.g., the Koch brothers’ funding of Scott Walker in Wisconsin or the huge (and illegal) funding of Prop 32 in California to drive unions out of politics — the dominant wing of the boss class is still playing the Obama and co-optation card.

For the ruling class, the results of the 2012 presidential elections — with the election of Obama and the weakening of the Republicans’ Tea Party wing — have provided a new, propitious opportunity to break out of the bipartisan impasse on debt reduction and begin implementing the Grand Bargain deal.

The November 8 issue of The New York Times reported with great anticipation that, “Mr. Boehner publicly responded to Mr. Obama before assembled reporters with his most explicit and conciliatory offer to date on Republicans’ willingness to raise tax revenues, but not top rates, together with a spending cut package.”

Contours of the Latest Bipartisan Deal

The contours of the latest deal being worked out between Boehner and Obama were made public by California Democratic Senator Dianne Feinstein in an article in the San Francisco Chronicle on November 11 titled, “Fiscal Cliff: California Stands to Lose Big.”

Feinstein led off with a reply to those members of Congress who have insisted that any budget-reduction deal should wait till the new administration takes office, insisting that, “delaying spending cuts and revenue increases is not an option.” And she went on to outline the deal worked out by the chief economists at Moody’s Analytics – a Wall Street think-tank — that would involve the following:

- extend the Bush tax cuts, but only for those earning less than $250,000, and close numerous business and other upper-bracket tax loopholes to generate new revenue;

- cut funding for Medicare, both directly and by raising Medicare eligibility from age 65 to 67;

- change the formula for Social Security cost-of-living adjustments;

- cut funding for Medicare;

- make cuts to defense and non-defense budgets to scale back the “fiscal cliff” by half;

- extend key business tax breaks, as a first step toward “reforming” the tax code to lower corporate tax rates — all of this as “means to create jobs and increase revenue.”

Labor economist Jack Rasmus estimates that that mix in this latest deal would amount to roughly three-quarters spending cuts (mainly to Medicare and Medicaid) and one-quarter new tax revenue, with many of the cuts “back-loaded” to begin in 2014.

The AFL-CIO and the Grand Bargain

On November 8, the AFL-CIO organized informational lobbying actions in more than 100 cities — events that gathered anywhere from 15 to 150 people — to demand a halt to the attacks on Social Security, Medicare and Medicaid.

The AFL-CIO leaflet for the actions stated in part:

“Some legislators want to cut our Social Security benefits and raise the retirement age for Social Security and Medicare and cut Medicaid, forcing families into bankruptcy when a loved one needs long-term care. Why? All to pay for outrageous tax breaks for the richest 2% of Americans. That’s not what we voted for on November 6. Take a stand and tell our representatives to put working families first.”

No sooner were the top labor officials invited to the White House to discuss the debt-reduction proposals with Obama, however, than the back-tracking began.

On November 13, AFL-CIO President Richard Trumka, SEIU President Mary Kay Henry and other top union officials went to the White House to meet with Obama. Following the meeting, Trumka told reporters that, “It was a very, very positive meeting. … The president, like we are, [is] committed to preserving the tax breaks for the middle class and making sure that rich people pay their fair share.”

Trumka continued, “Are we going to collectively stand up and make sure that workers get a fair share in all of this? Absolutely we are. Do we believe that the president is committed to that same thing? Absolutely we do.”

The Wall Street Journal (November 14) reported on the Obama’s meeting with the labor officials as follows:

“Mr. Obama, in a meeting Tuesday with union leaders and other liberal activists, also pledged to hang tough in seeking tax increases on wealthy Americans. In one sign of conciliation, he made no specific commitment to leave unscathed domestic programs such as Medicare, leaving the door open to spending cuts many fellow Democrats oppose.”

Another such sign that major attacks on the social safety-net programs are on the table came from another person at the November 13 meeting with Obama. Market Watch quoted Max Richtman, president and chief executive of the National Committee to Preserve Social Security and Medicare, who said that, “Whatever savings come out of those programs would not come out of beneficiaries or citizens; it would be focused more on providers.” (November 14)

Cutting out — or defunding — the providers in the social safe-net programs is just one of the many means to gut these programs.

Obama made no commitment to the labor officials that he would preserve unscathed the domestic programs that labor has traditionally considered sacrosanct — and yet Trumka, Mary Kay Henry and the other officials had the gall to tell working people that the meeting with Obama was “very, very positive” and that Obama “is committed to [the] same things” as the labor movement.

No one in the labor movement should accept such double-talk!

Labor Must Draw a Line in the Sand: No Cuts!

For working people to stop this assault on Social Security, Medicare, and Medicaid, it is vital that the unions break their ties of subordination to the Democratic Party and act as an independent labor movement. This is the central political obstacle facing the working class.

What is urgently needed are huge mass demonstrations in the streets — involving the entire labor movement, the organizations of the oppressed communities, and the more than 100 million people on Social Security, Medicare and Medicaid — to demand that Congress reject any Grand Bargain deal and any cuts to the social safety net. It is possible to make them retreat!

But as long as the top trade union officials continue to tell us that Obama and the Democratic Party leadership are on the same page as we are on this life-and-death matter for millions of working people, it will be impossible to organize a serious fightback that can beat back the steamroller. Whatever actions are organized will be nothing more than events “to make the record” or, at best, to push for a bit less sacrifice for workers and a bit more sacrifice for the bosses.

How many times have we seen the top labor officialdom take a hard stand around an important issue for working people only to see their “line in the sand” erased under the slightest pressure from the Democratic Party and its operatives?

This happened in October 2008, when Obama and then House Majority Speaker Nancy Pelosi urged the AFL-CIO to support the Wall Street bailout package proposed by George W. Bush. It happened again when these same top Democrats told the labor movement that both Single Payer healthcare and the Public Option were off the table and it was necessary to lobby for Obamacare, a real boon for the private healthcare insurance companies.

In both these cases — and these are just two among many more — the labor officialdom organized lobbying events much like they did this past November 8, only later to abandon their stance as the Democrats retreated under pressure from Obama and Pelosi.

This has to stop!

Reject Their Phony Arguments!

In the coming days we can expect Dianne Feinstein, Nancy Pelosi, Harry Reid, and other Democrats to argue that the proposed cuts to the safety-net programs are really not that bad, that they are modest and acceptable, that they are even necessary to save the programs from greater cuts or even dismantlement.

We can expect to be told that Obama has no real choice and must make “tough choices,” because he must reach a deal to save the economy from crippling harm, and the only way he can do so is by agreeing to “entitlement” cuts.

We can expect to be told that a refusal to accept the compromise will only mean hurting working people and thus damaging any chance of getting Democrats re-elected in 2014.

We can expect to be told a lot more nonsense. All these phony arguments must be rejected.

Nothing in the deficit resulted from increased costs in Social Security, Medicare or Medicare — as the business press has proclaimed night and day. All these affirmations are nothing but lies aimed at fueling a campaign to dismantle all the rights and gains earned by working people through bitter struggles.

The astronomic growth of the debt is due to the crisis of over-production of the capitalist system. Insofar as capitalists are only interested in making profits, and given the declining purchasing power of the working-class majority, the capitalists — and the governments in their service — had to create new artificial markets to continue to make profits. This is especially true in the United States, the belly of the capitalist beast.

This resulted in the massive growth of the arms economy and the speculative economy (derivatives, hedge funds and the like) — particularly since 1971, when then-President Nixon took the U.S. dollar off the gold standard.

Just over the past decade, for example, the federal deficit has escalated from $5 trillion to $14.3 trillion as a result of increased war spending ($2.5 trillion), the Bush-era tax cuts ($3.4 trillion), the Bush-Obama bailout of Wall Street and the banks ($3 trillion), and interest of the debt.

It is time for labor to draw a hard line in the sand and demand that Congress reject the Grand Bargain and any attacks on Social Security, Medicare and Medicaid. It is time for labor to say:

* No Cuts, No Concessions!

* Hands Off Our Cherished Safety Net Programs!

* Expand Medicaid Coverage in Every State!

* No to Shared Sacrifice!

* Tax the Rich!

· Slash the Military Budget!

* Repossess the 2 Trillion of Wall Street Bailout Funds Still Sitting in the Banks Collecting Interest!

* Put America Back to Work by Rebuilding Our Crumbling Infrastructure and Implementing a 21st Century WPA Program! Money for Jobs, Health Care, Housing and Education — Not for Wars and Occupations!

* Slash Pentagon Spending!”

It is time to tell the Democrats to take a hike. It is time to tell them that labor has its own agenda and that it will push for its agenda in defense of working people and all the oppressed in the streets and in every other arena.

The mood in this country is ripe for taking such a stand. A powerful fightback sentiment has burst forward from below, beginning with the Wisconsin Uprising all the way to the successful Chicago teachers’ strike. The ranks and mid-level leaders are ready to move and are pushing on the gates. It is up to these union activists and officials — and to their community partners, especially among retirees’ organizations — to light a fire under the top labor officialdom to demand that they do the right thing and not budge one single inch from their current stance demanding “Hands Off Our Safety Net Programs!”

There is no time to lose.

At this writing, unionists and activists in numerous cities have issued calls to mobilize in the streets in the coming weeks to stop the attacks on the social safety net. We in Socialist Organizer would support unconditionally all motions that call for building broad-based local coalitions to organize a whole host of escalating actions — including a mass mobilization in Washington, D.C. — and that contain language that makes it clear that labor and its partners must not back down under pressure from any quarters from an uncompromising “No Cuts!” demands.

Such resolutions would point the way forward.

Perspectives for Independent Political Action and the Fight For a Labor Party

The fight to stop and reverse the cuts to Social Security, Medicare and Medicaid by building a truly independent labor movement — in deeds, and not just in words — cannot be separated from the fight for independent labor political action and the formation of a Labor Party based on the unions and the organizations of the oppressed communities, though the pace and tempo for advancing these two struggles is not the same.

What is holding back the building of an independent labor movement is the notion that the Democratic Party can be a vehicle to serve workers’ interests, and that the Democrats are “friends of labor.”

Obama, Pelosi, Feinstein, Reid and all the rest are no “friends of labor.” They are poised today to make unprecedented cuts to the Big Three social safety net programs, just as yesterday they bailed out Wall Street on the backs of working people.

Decaying capitalism today seeks to destroy all existing workers’ organizations the world over in order to lower labor costs and atomize the workers’ resistance struggles. But this continuing offensive would not be possible without the direct aid provided by the labor officialdom to the Democratic Party. Reliance on Obama and the Democratic Party has led the trade union officialdom to accommodate the most reactionary policies aimed against the working class and all the oppressed.

And this is why the fight to break the trade unions — the AFL-CIO in particular, but also Change to Win and the independent unions, the only organized expression of the working class as a class for itself — from the Democratic Party is the central political question facing working people today.

To be able to fight the cuts on a consistent basis, labor must understand that the Democratic Party is run, financed and controlled by Wall Street and by a new breed of robber barons. Some Democrats may be friendly to labor on some issues, but when push comes to shove, when the economic crisis bears down, as it did in September 2008 with the financial meltdown and crisis, or as it is doing today when Wall Street warns against “jumping off the financial cliff,” these Democrats toe the party line dictated by Wall Street. When push comes to shove, which today is the norm, the Democrats seem to have far bigger friends in the corporate and bankers’ board rooms.

This is why it’s essential to understand the class nature of the Democratic Party; it is necessary to understand that the Democrats are one of the “twin parties of the bosses,” as former Oil, Chemical and Atomic Workers union leader and Labor Party founder Tony Mazzocchi insisted time and again.

Building an independent labor movement through independent mass action in the streets to demand “No Cuts, No Concessions!” must therefore be accompanied by the opening of a serious and steady discussion within the labor movement — from top to bottom — about the nature of the Democratic Party and the need to build a new political party, a Labor Party based on the unions and the communities of the oppressed.

Some key questions need to be debated widely, at all levels of the labor movement:

* Can working people preserve past gains, let alone make new gains, by continuing to support Democratic Party politicians whose attacks on labor and on all the oppressed communities are only deepening by the day?

* Isn’t it necessary to build a truly independent labor movement in deeds, not just words, and project that independent struggle into the political arena by running independent labor-community candidates, beginning at the local and regional levels?

* Isn’t it necessary to do on a local level what labor activists have done in Kansas City — that is, re-launch Labor Party Advocates — and isn’t it necessary to re-launch a Labor Party organizing committee, whatever its name, on a national level?

* Isn’t it necessary to link this fight for independent political action to the struggles of the entire the working class, especially its most oppressed sectors in the Black and Latino communities?

* And in this vein, isn’t it necessary to open a real discussion about the political reasons that led to the demise of the Labor Party that was launched by OCAW leader Tony Mazzocchi and thousands of unionists in 1996 and that offered so much hope at the time?

Join Socialist Organizer to Help Advance This Fighting Perspective!

We in Socialist Organizer are part and parcel of all the struggles to mobilize against the budget cuts and giveaways, raising high the independent banner of, “No Cuts, No Concessions!”

We believe that our central task is to be part of the workers’ fightback to reclaim their trade unions, which are the result of the historic struggles to constitute the working class as a class for itself. We are intervening in this process, building rank-and-file caucuses but also promoting the tactic of the united front from above and from below to mobilize the rank and file in the largest possible numbers.

This question of the independence of the workers’ movement — and of its unity to defend and advance all the gains made in the past — is a burning issue today.

It is certainly true that the unions are currently in a tremendous crisis, given their subordination, via the trade union leadership, to the Democrats. But this can change — because the most powerful and effective means for resistance remains mass organization on a explicitly working-class basis against the bosses. It would be a serious mistake to let the current state of the organized workers’ movement let us lose sight of its tremendous revolutionary potential.

History shows that the U.S. labor movement can reverse its fortunes very quickly, sometimes virtually overnight — e.g., in the strike wave of 1934. Today, the deep anger and frustration of working people is looking to find an expression — and it is our task, we believe, to point the way forward.

That is why we in Socialist Organizer have supported — and will continue to support — all the initiatives seeking to preserve the independence of the labor movement and to lay the basis for building an authentic Labor Party based on the trade unions and all the organizations of the oppressed.

We are also on the front lines in the fight against imperialist wars and interventions — from Iraq to Syria, Afghanistan to Iran, Libya to Mali, and Haiti to Colombia. No imperialist intervention is justified anywhere in the world; everywhere such interventions represent an affront to the rights of oppressed peoples and nations to self-determination.

We are a small but growing organization, and we need you — our readers and supporters — to join us so that we can be more effective in promoting this independent, fightback perspective. Please contact us today to learn more about Socialist Organizer. We want to hear back from you.

 

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