BY JOHN STUDER
The special 12-member Joint Select Committee on Deficit Reduction—dubbed the “supercommittee”—announced Nov. 21 in an email that it had failed to fulfill its mandate to produce a master plan for cutting at least $1.2 trillion from the U.S. budget.
The bipartisan committee could not agree on recommendations for slashing Social Security, Medicare and other social programs workers and farmers have increasingly come to depend on. Nor could it come to any agreement on how to increase their government’s tax revenue.
The committee was established in August as part of a last-minute deal struck between Democratic President Barack Obama and congressional Republicans on a series of budget-cutting measures in exchange for agreement to raise the federal “debt ceiling.”
The agreement also called for more than $900 billion in cuts over 10 years to “discretionary spending,” the part of federal budget expenses that Congress normally decides, which includes social programs, various government agency budgets, and aspects of military spending. It does not include payments to Medicare and Medicaid beneficiaries or Social Security.
The supercommittee was tasked with drawing up another $1.2 trillion over 10 years from further cuts or new taxes. Under the agreement, if the committee failed, automatic cuts in social programs, including Medicare, and military spending, would be “triggered.”
These cuts are now slated to take effect. However, they are not budgeted until 2013—after the next round of federal elections. Both Democratic and Republican politicians are pushing to eliminate some of the cuts to the military. Obama has vowed to veto any effort to change the “automatic” reductions, which he urges be coupled with changes in the tax code to increase government revenue.
Following the failure of the supercommittee, Fitch Ratings announced Nov. 28 that it may cut the U.S. government’s AAA credit rating if steps aren’t taken to “place U.S. public finances on a sustainable path.”
Before taking office in 2009, Obama stated, “We are going to have to make some tough choices under my watch,” indicating that cuts in Social Security and Medicare will be a “central part” of the goals of his administration. “Everybody is going to have to give,” he said, kicking off his demagogic drumbeat of “shared sacrifice.”
Politicians from both parties have sought ways to make working people pay for the rulers’ growing government budget deficit and mounting debt.
Each time they have faced political divisions about how to craft their attacks on workers in order to best deflect opposition and protest. Democrats have used populist rhetoric against the 1 percent—the “super-rich”—to put together packages combining small tax increases on the wealthy along with deep cuts and other measures that fall heaviest on the working class.
Republicans have appealed to workers’ hatred for government bureaucracy and red tape to call for tax cuts, or other tax “reform,” to bundle together with deep cuts to social programs.
Obama distanced himself from the committee’s deliberations, playing no role in efforts to broker a deal.
One trend that is clear over the last year is that both sides are increasingly open to taking greater political risks in order to continue deepening their attacks on workers. “When you hear Republicans claim that Democrats refused to touch their sacred cows of spending,” the New York Times editorialized Nov. 21, “remember that the Democratic offer would have cut $475 billion from Medicare and Medicaid over 10 years, nearly half of which would have come directly from beneficiaries.”
While the rulers strive to package their assault on working people, one aspect of the capitalists’ government debt is sacrosanct—the growing interest paid to holders of U.S. treasury bonds. Big capitalists in the U.S. and abroad are paid more than $400 billion a year, some 15 percent of the federal budget.
Following the default of the supercommittee, Democratic and Republican politicians have engaged in an orgy of recriminations, as partisan battle lines for the 2012 elections are tightened.
Next up are fights over two measures set to expire at the end of the year—reductions in Social Security payroll taxes and extensions in unemployment compensation for the growing numbers of long-term jobless.
Production drops, banks wobble throughout Europe