Inside the Imperial Budget
Bush’s budget proposal for FY 2008 is emblematic of the social crisis unfolding inside the U.S. Empire, its ramifications still largely ignored in mainstream politics. Coupled with whopping military expenditures and permanent tax cuts for the extraordinarily wealthy, Bush’s budget shreds what little remains of the tattered social safety net for the most downtrodden members of the world’s richest society.
The Iraq war marks the first major war in the last century fought in the interests of America’s ruling elite without even the pretense of "shared sacrifice." During the First World War, the tax rate for top income earners stood at 77 percent; during the Second World War, at 94 percent. Even during Vietnam, the wealthiest taxpayers faced a rate of 70 percent on personal income. Yet, as the bloodletting in Iraq has been proven a war for nothing more than U.S. control over Middle Eastern oil, the corporate class continues to enjoy an income tax rate that has been capped at only 35 percent since 2003–the year the U.S. invaded Iraq.
Bush’s plan to permanently extend these tax cuts, which are set to expire in 2010, would cost an estimated $211 billion in 2012 and $1.6 trillion over the next decade. Added to their profit windfalls and soaring executive salaries, the corporate class has every reason to celebrate.
Bush’s budget makes clear that the growing numbers of economically disadvantaged Americans–already supplying the cannon fodder to kill and die in Iraq and Afghanistan–must also continue to shoulder the suffocating financial burden for U.S. imperialism’s twenty-first century follies. Bush’s budget proposal brazenly takes aim at veterans themselves, nearly doubling their out-of-pocket fees from $8 to $15 for prescription medications when they return home from a war zone battered and traumatized, and often looking for work.
In this war, only the working class is expected to sacrifice. On January 14, the New York Times interviewed the family of Sgt. Andrew DeBlock, a 41 year-old member of the New Jersey National Guard who recently learned that his stay in Iraq was extended by four months due to Bush’s troop surge. His wife. Heidi DeBlock, told Times reporters that, due to the her husband’s lost income, she "has had to battle her heating-fuel company, which wanted cash up front, and her husband’s cellphone provider, which will not let him out of his contract even though he is off fighting a war."
Bush’s budget reduces Medicare and Medicaid spending by $102 billion over the next five years. Food stamps would be slashed to the bone, dropping some 300,000 currently eligible recipients. The Commodity Supplemental Food Program, which provides food for more than 450,000 low-income seniors, would be completely eliminated. Bush also proposes gutting $300 million in funding for the Individuals with Disabilities Education Act and over $3.6 billion from special education programs in public schools. And these are just the highlights.
Bush did, however, manage to find the money to substantially increase funds for sexual abstinence education for 12-18 year-olds–rising to $191 million, an increase of $28 million from last year’s budget.
Becky Ogle, Senior Advisor on Disability to the Democratic National Committee (DNC), argued of Bush’s proposal: "Last November, the American people went to the polls and demanded a new direction for America. President Bush’s misplaced budget priorities represent more of the same failed leadership that the American people have already rejected. With Congress under Democratic control, we can finally have real leadership that reflects the values and priorities of all Americans."
While voters’ expectations for change are high, Congressional Democrats have thus far shown reluctance to chart anything resembling the "new direction" to which Ogle refers. Senate Democrats’ inability to win even a non-binding resolution on the Iraq war does not bode well for the upcoming budget battle. Democrats blamed Republicans for maneuvering to block the resolution. In reality, Republicans called the Democrats’ bluff by insisting that the symbolic resolution be accompanied by a binding vote on continued funding for the war. War funding would have passed with Democratic votes, neutralizing the Democrats’ smoke-and-mirrors efforts to appease their antiwar supporters.
On the domestic front, Democrats have thus far shown no willingness to do more than tinker with the most egregious symptoms of the economic crisis facing the U.S.’ working-class majority. Roughly 45 percent of American workers now earn $13.25 an hour or less, while 58 percent work for less than $15 an hour. The fastest growing occupations in the U.S. are janitor, hospital orderly and cashier.
During their widely trumpeted first 100 hours, Democrats did spearhead legislation to raise the minimum wage and pledged to restore cuts from heating subsidies and Head Start programs for the poor.
But raising the minimum wage to $7.25, which has remained in place at $5.15 an hour for the last decade does not begin to reverse the race to the bottom in working-class wages–since the typical wage is worth less today than it was in 1972, and real wages have fallen steadily over the last four years of economic "recovery".
Similarly, Democrats proposed raising Pell Grants for low-income college students from $4.050 (frozen for the last five years) to $4,300. Bush’s own budget proposal surpasses the Democrats’, raising Pell grants to $4,600 in fiscal year 2008 and to $5,400 by 2012.
As the Times commented on February 5, "While Democrats criticized Mr. Bush for what the House Speaker, Nancy Pelosi, called ‘wrong priorities,’ they conceded privately that Mr. Bush was correct in warning that the unchecked growth of entitlement programs would eventually break the federal bank."
Congressional Democrats have yet to confront the elephant in the room: Bush’s massive tax cuts for the wealthy during an imperial war. Why are they so timid in the face of a seismic shift in popular opinion, winning them a majority in both Houses of Congress in November? The answer is straightforward: the 2008 presidential campaign is already underway, and Democrats plan to continue their centrist path to victory, focusing on would-be Republican voters secure in the knowledge that the overwhelming majority of progressives will vote Democrat however little they get in return.
As Mike Davis argued recently in New Left Review, "In practice, this translates not simply into a Democratic reluctance to undertake new spending, but also a refusal to debate the rollback of any of Bush’s $1 trillion in tax cuts for the affluent. ‘Tax and spend, tax and spend, tax and spend’, Senator Kent Conrad (chair of the Budget Committee) told the New York Times, ‘we’re not going there.’"
The Times stated on February 6, "But few Democrats are expected to look for new revenues by calling for an end to Bush’s tax cuts, instead of extending them as the president proposed Monday Since 2001, Democratic leaders have made a point of saying the Bush tax cuts are unfairly weighted toward the wealthy and dangerous to American solvency. But the tax cuts expire in 2010, and Democrats acknowledge that they are not ready to move on them now."
In addition, Democrats are open to negotiations with Bush on future Social Security benefits, "possibly with a curb on some benefits," the Times added.
"Bipartisanship" is the watchword of the new Democratic majority in Congress. But this is not a new strategy. Democrats have been eager bipartisans for the last 30 years–enabling Reagan’s tax cuts, Clinton’s gutting of "welfare as we know it" and all of George W. Bush’s legislation, including the Patriot Act, the wars on Iraq and Afghanistan and, yes, Bush’s tax cuts.
The neoliberal Democratic Leadership Council (DLC) remains firmly in control of the Democratic Party, personified by their presidential frontrunner, Sen. Hillary Clinton. The word "poverty" never passes her lips.
During a recently staged "conversation with Iowans," Clinton asked what health insurance system her audience preferred. "Overwhelmingly the audience favored moving toward a Medicare-like system for all Americans," the Washington Post reported.
Yet Clinton remained noncommittal about any forthcoming policy pledge for the nation’s 47 million uninsured. She told her Iowa audience, "I’m not ready to be specific until I hear from people."
Expect no major progress from Democratic Party powerbrokers until the angry electorate that swept them into power in November begins to hold them accountable for their actions–and inactions.
SHARON SMITH is the author of Women and Socialism and Subterranean Fire: a History of Working-Class Radicalism in the United States. She can be reached at: email@example.com