2011-07-14 "Wall Street Banksters Back Maneuver to Avert Debt Default: Attacks on "Entitlements" Are Still At Top of Corporate Bipartisan Agenda" by ALAN BENJAMIN from "Unity & Independence" supplement to "The Organizer" newspaper [P.O. Box 40009, San Francisco, CA 94140] [firstname.lastname@example.org]
With the August 2 deadline on debt-reduction negotiations still at an impasse, Republican Senate leader Mitch McConnell offered July 12 a procedural maneuver that could break the standoff by allowing the debt limit to be increased without the Republicans having to budge in their opposition to any additional tax revenue and without the Democrats having to accept cuts in the three big "entitlement programs" ... at least for now.
The July 13 editorial of The Wall Street Journal explains what they call McConnell's "convoluted procedure": McConnell's proposal would let Obama propose three debt-limit increases adding up to $2.5 trillion over the coming months. Senate Republicans -- with Senate Majority Leader Harry Reid's cooperation -- would vote three different resolutions opposing the bills. Obama would then veto the Republican resolutions, sustained by 34 Democrats in the Senate. "Obama would get the debt-limit increase, but "without Republicans serving as his political wingmen," write the WSJ editors.
The Wall Street Journal, the most articulate mouthpiece of the corporate class, came out in support of the McConnell proposal, noting that one way or another it was a given that the debt-ceiling would be raised; the only question was what either side, Democrats and Republicans, would get in return. "We'd far prefer a bipartisan deal to cut spending and reform entitlements without a tax increase," concludes the WSJ July 13 editorial. "But if Mr. Obama won't go along, there's no reason Republicans should help him dodge the political consequences by committing debt-limit harakiri."
A further reading of the July 13 mainstream press is revealing in many ways. The following points and conclusions emerge from this reading:
1) The Wall Streets banksters and corporate CEOs are not about to let their hired hands in the Democratic and Republican parties create an August 2nd default that could undermine the economy and their profits. The political impasse -- product of both the political crisis within the top ruling circles of the country and the deep resistance from below to any cuts in the three "sacred cows" (Social Security, Medicare and Medicare) -- has gone far enough. For the captains of industry and finance, it is now necessary to organize an orderly retreat from the effort, unsuccessful for now, to use the debt-reduction talks to "cut spending and reform entitlements," to quote The Wall Street Journal.
Let the blame game begin -- with Democrats blaming the Republicans for their unwillingness to raise tax revenue, and with Republicans blaming Democrats for continuing to increase the size of the federal debt -- but at least with the McConnell proposal, not their preferred choice, Wall Street and the banks avoid a default. With the worsening debt crisis in Europe today, especially with the growing financial crisis in Italy -- it would be "political harakiri" for the powers-that-be to allow a default on the U.S. debt. As they see it, they will get another bite at the apple to deepen their assault on the U.S. working class with the upcoming budget talks that begin in October 2011.
The McConnell proposal is not necessarily the last word, however. At this writing, Obama has set a Friday, July 15, deadline for the Republican and Democratic party negotiators to determine whether they can reach a broad budget deal -- be it around the $4 trillion agreement he has proposed, or around the latest $2.4 trillion agreement that House Majority Leader John Boehner has proposed. If not, Obama said, he would turn his energies to finding an accord over how to raise the debt limit without agreement on taxes and spending along the lines proposed by McConnell.
2) Much is being said and written about Obama's alleged crafty use of the onus game to blame Republicans for this impasse. According to this view, Obama knew all along that the Republicans would not cede on tax revenue, so he had nothing to lose by offering to sell out Social Security, Medicare and Medicare in a package of up to $4 trillion in cuts.
This is not convincing.
As Carolyn Lochhead writes in the July 13 issue of the San Francisco Chronicle, Obama and Boehner had reached a tentative agreement on a debt-reduction plan. Boehner, writes Lochhead, had victory at hand. The president's "Grand Bargain" was everything the Republicans have been advocating for the past decade. The Republicans would get $3 trillion in spending cuts, including Medicare, in exchange for $1 trillion in tax loopholes and a roll back of the Bush tax cuts on top brackets. "As a sweetener," Lochhead writes, "they would get desperately needed tax reform. All at a time when taxes are close to a postwar low. Boehner had a president willing to go not halfway, but three-quarters of the way. And still has one."
And Lochhead continues:
"But House majority leader Eric Cantor, R-Va., so covets Boehner's job that according to the Washington Post, Obama has to ask with whom he is negotiating. (No one ever had to ask whether former Speaker Nancy Pelosi was in charge.) Tea Party Republicans seized defeat from the jaws of victory. Now Senate minority leader Mitch McConnell has proposed the grand weasel strategy of letting Obama take responsibility for raising the debt ceiling and making all the spending cuts."
Obama was clearly doing Wall Street's bidding -- and Boehner understood this perfectly. Obama was -- and still is -- "willing to go three-quarters of the way" to everything demanded by the Republicans. I would say it was more like 95% -- as the Obama "tax reform" would ultimately reap huge profits for the Wall Street moguls. The Tea Party wing of the Republicans, who seized defeat from the jaws of victory -- were simply too short-sighted and backward -- from the vantage point of defending the class interests of the bosses -- to realize how sweet a deal was being served to them on a platter by Obama.
There should be no doubt it: Obama was -- and still is -- willing to sell out and dismantle Social Security, Medicare and Medicaid, and all other rights and gains won by working people through bitter struggle.
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3) The Democrats, beginning with House Minority Leader Nancy Pelosi, have emerged from these debt-reduction talks as stalwart supporters of Social Security, Medicare and Medicaid. Or at least this is the perception.
What is the reality?
For many months, Pelosi and the top leaders of the Democratic Party were totally silent as Obama, Biden and Reid sought to deliver the "Grand Bargain" -- with its huge attacks on the so-called "entitlements."
It was only when the debt-reduction talks had every indication of breaking down that Pelosi chose to position herself and her party as "line in the sand" opponents of the attacks contained in the Obama plan. More important, this "opposition" was the result of the massive reaction from the Democratic Party base -- from the unions to the liberal blogs and beyond -- in opposition to what was being negotiated in closed quarters, when the information about the $4 trillion in cuts finally hit the press.
And there was also the issue of posturing by Pelosi in helping Obama in the talks with the Republicans. As Carolyn Lochhead writes in the July 13 issue of the San Francisco Chronicle:
"But Pelosi might be helping Obama by strengthening his bargaining position against Republicans and forcing them to compromise on taxes
"Many Democrats, already angry that Obama negotiated a two-year extension of the Bush-era tax cuts last year and agreed to sharp cuts in domestic programs this year, feel that he has given up too much in the debt talks. Pelosi's ultimatum provides the White House with a backstop.
"'If the Democrats are too quiet, then the Republicans are sure to say, "Gee, if Obama's walked this far, he can keep going," ' said Dan Seiver, a finance professor at San Diego State University. 'The Republicans have to see that Obama has gone about as far as he can go, and at some point he has to say, "I can't alienate my entire party because then we won't get this approved anyway" ' without Democratic votes."
No. Pelosi and the Democrats are not our allies in the fight to preserve -- and expand -- Social Security, Medicare and Medicaid.
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4) Nothing has been settled for now. There may be a temporary agreement with the McConnell procedure that will leave Social Security, Medicare and Medicaid unscathed for now. But the corporate class, and their two parties, are not about to relent in their drive to attacks these programs.
As economist Jack Rasmus has written in his excellent article titled, "Reading the Debt Ceiling Tealeaves to Predict the Future":
"But the gutting of social security and medicare is not over. The negotiations have just begun anew. All that's changed is that big money bag corporate campaign contributors arm-twisted their Republican politicians to drop the debt ceiling as hostage factor in the debt debate and negotiations.
"The day after the ceiling is raised, and it soon will be, the real negotiations will begin. Those real negotiations will pick up where Obama-Biden left off. On the table once again will be the President's proposals to cut $3 trillion in entitlements. That will be the start point for negotiations, not the end point. ...
"The next act in the cut the deficit follies will begin the day after the debt ceiling is passed. The new deadline will be the deadline for passing the federal budget for 2012, which begins October 1."
This is why, more than ever, we must continue the campaign -- in the streets -- for No Concessions, No Cuts ... beginning with Not One Penny Cut from Social Security, Medicare and Medicaid!