Federal shutdown over budget deficit reveals again the need for a new party of the ‘99%’
By Kai Stein, Committee for a Workers’ International (CWI)
Around 800,000 federal workers are furloughed – sent on holiday without payment. While their families are on zero wages from the federal state, the $174,000 annual income per member of Congress is untouched by the governmental shutdown which started on 1 October.
The Republican majority in the House of Representatives (lower chamber of the parliament) blocked any attempt of Democrat President Barack Obama to get a budget agreed or the old one prolonged.
On the one side, this is an attempt to bring down Obama’s very limited and business friendly healthcare reforms.
On the other side, the US ruling class is confronted with a dysfunctional political system and Republican party. In a sense this is not a new phenomenon, but it has been exacerbated by the recent crisis of capitalism.
The most vicious part of the ruling class previously backed the right-wing populist ‘Tea Party’ Republican movement to fight for their interests. Despite them abandoning this movement in 2010, they do not fully control this Frankenstein monster. Therefore, in general, the Republicans do not act in the best interests of the US ruling class.
A three-week government shutdown could cut off 0.9% of GDP (total output), Goldman Sachs predicts. But what Wall Street worries even more about is the possibility of the US reaching the ‘debt ceiling’ around 17 October.
Without new legislation in Congress, the administration could not borrow more money and the US would be unable to meet its debt obligations and technically default – for the first time in its history. A default could spell disaster for the poorest who would be forced to pay for this crisis.
But who is responsible for the expanding federal budget deficit? Trillions of dollars have been spent in bailouts and quantitative measures since 2008 to shore up US capitalism.
This is on top of massive tax breaks for the super-rich and corporations and the escalating cost of funding unwinnable and bloody wars under successive administrations.
To avoid these deeper troubles, the more ‘moderate’ part of the Republicans in Congress are prepared to make a deal with the Democrats and are searching for ways to compromise. However, this might reveal much deeper splits in the “Grand Old Party” (Republicans), leading to its fragmentation.
The narrative that the Democrats try to spin is that this is a repetition of the 1995/96 crisis. Then, a weak Clinton presidential administration conflicted with Congress, survived a 21-day shutdown, and came out strengthened as people blamed the Republicans.
There are elements of that perspective visible in opinion polls, as the approval rates of Obama have slightly increased (although, overall, they are still negative).
However, the parallel might not be 1995/96 but the summer of 2011 when a stalemate of Democrats and Republicans – at that time facing the automatic spending cuts they implemented to force each other to compromise – was revealed in all its sharpness.
Following the uprisings of the masses in the ‘Arab spring’ the mass protest movements in Spain and Greece and US public anger over huge corporate bailouts, the anti-capitalist ‘Occupy’ movement arose.
This fury is still there. Opinion polls show the increasing frustration with Congress – with approval rates down to 10% – and the whole political system. Even some of the most enthusiastic Obama voters – following the NSA surveillance scandal, the war-mongering over Syria, etc – are questioning the ability of Obama to really stand up to the Republicans.
Also, the economic situation has failed to boost support for Obama. There was a weak recovery, but only for the rich. The top 1% increased its real income by 31% from 2009 to 2012, while the bottom 40% lost 6%. (Paul Krugman in New York Times, 23 September 2013).
The potential is there for another big movement like Occupy developing, this time more likely around concrete social and economic issues and demands.
Immigrant rights groups are mobilising against anti-immigrant policies. Fast-food workers are rising up for a dramatic increase in their wages with the demand for $15 an hour and full union rights.
Unorganised workers at companies such as Walmart, known for its anti-trade union stance, are starting to fight back.
The struggle against foreclosures and for affordable housing has seen new offshoots, like the Green Party mayor in Richmond, California, using “eminent domain” legislation (a form of compulsory purchase of residential property from investors on behalf of homeowners suffering from ‘negative equity’ mortgages).
Occupy Homes in Minneapolis and elsewhere have also provided lively examples of how grass roots movements can defend people’s homes and stop evictions.
While generalising these workplace struggles and social movements still requires overcoming the dead-hand of trade union bureaucracy and the weakness of working class organisations, when the enormous US working class finds its voice the world will hear it.