Fiscal Cliff Averted, Now the Attack on People Begins

by KEVIN ZEESE

Last night, Congress passed a watered down fiscal cliff package that will raise taxes on everyone, but the worst is yet to come, and this “deficit cutting” measure contains some surprises.

Economist Jack Rasmus highlights Obama’s comments after passage which signal what we can expect: “I am very open to compromise . . . Medicare is the biggest contribution to the deficit.” In fact, Medicare does not contribute to the deficit because it is funded by a separate tax, but Obama has signaled – expect cuts to Medicare and Medicaid. Obama has been laying the ground work to cut social insurances since 2010.

The “deal” only cut the deficit by $620 billion of the bi-partisan goal of $4 trillion so there are a lot of budget cuts ahead and they will not come from the military or national security state, they will come from the necessities of the people. Even if the U.S. had gone over the cliff cuts to the military were minimal, DoD cuts scheduled to take effect in 2013 were only $24 billion, according to the Congressional Budget Office, much less than the oft-mentioned $500 billion reported in the media. The $500 billion are cuts over ten years, mostly backloaded to the out years. Thus these are cuts the military would likely never see.

The reason that the deal cut the deficit so little is because Obama backed off his campaign promise to raise taxes on the top 2%, and instead only repealed the Bush tax cuts on the top 1.5%, those earning over $400,000.  As a result, rather than raising $1.2 trillion in revenue, the deal only raised $600 billion and part of that came from working people as payroll taxes were re-instated.  The result will be more cuts on the rest of us – so later this year the bi-partisan cut to corporate tax rates can be passed.

The “deal” was not all about cuts, as Matt Stoller writes, the deficit cutters were very generous to Goldman Sachs: “Goldman got $1.6 billion in tax free financing for its new massive headquarters through Liberty Bonds.”  Another gift to big finance and multinationals: a provision was included that allows U.S. multinationals to not pay taxes on income earned abroad at a cost $1.5 billion to the budget.

And, the people will need their circuses as austerity hits so NASCAR got $43 million in tax breaks over two years to build race tracks and associated facilities. Hollywood studios received $150 million in tax breaks for 2010 and 2011.

People facing foreclosure and living in underwater houses lost the small foreclosure relief programs that existed and tax laws were set to treat any write-down on a mortgage as income (i.e. if a mortgage was written down by $100,000 the tax payer had to pay taxes on $100,000 income) but the cliff deal delayed that tax change for one year.

Taking care of ill family members at home was dealt a set-back with a provision in the Affordable Care Act designed to let millions of elderly and disabled people get help at home rather than be placed in institutional care being repealed.

There was good news for Green energy in the deal. Roughly a dozen provisions would extend credits and incentives for plug-in electric vehicles, energy-efficient appliances, biodiesel and renewable diesel, and other alternative energy initiatives.

Budget debates are how government sets its priorities and the fiscal cliff package shows were h government’s priorities are: low taxes on the wealthy and corporations, giveaways to business and take-aways from the American people.  People can expect much worse in the months to come unless they get organized and mobilize against austerity in a big way.  Elected officials will need to be scared by the public in a big way to stop the bi-partisan assault on the people.

Kevin Zeese co-directs Its Our Economy and was an organizer of Occupy Washington, DC.

This article was taken from the weekly e-newsletter of Its Our Economy.  Sign up for the newsletter at www.ItsOurEconomy.US.

 

Kevin Zeese is an organizer at Popular Resistance.

Like What You’ve Read? Support CounterPunch
August 31, 2015
Michael Hudson
Whitewashing the IMF’s Destructive Role in Greece
Conn Hallinan
Europe’s New Barbarians
Lawrence Ware
George Bush (Still) Doesn’t Care About Black People
Joseph Natoli
Plutocracy, Gentrification and Racial Violence
Franklin Spinney
One Presidential Debate You Won’t Hear: Why It is Time to Adopt a Sensible Grand Strategy
Dave Lindorff
What’s Wrong with Police in America
Louis Proyect
Jacobin and “The War on Syria”
Lawrence Wittner
Militarism Run Amok: How Russians and Americans are Preparing Their Children for War
Binoy Kampmark
Tales of Darkness: Europe’s Refugee Woes
Ralph Nader
Lo, the Poor Enlightened Billionaire!
Peter Koenig
Greece: a New Beginning? A New Hope?
Dean Baker
America Needs an “Idiot-Proof” Retirement System
Vijay Prashad
Why the Iran Deal is Essential
Tom Clifford
The Marco Polo Bridge Incident: a History That Continues to Resonate
Peter Belmont
The Salaita Affair: a Scandal That Never Should Have Happened
Weekend Edition
August 28-30, 2015
Randy Blazak
Donald Trump is the New Face of White Supremacy
Jeffrey St. Clair
Long Time Coming, Long Time Gone
Mike Whitney
Looting Made Easy: the $2 Trillion Buyback Binge
Alan Nasser
The Myth of the Middle Class: Have Most Americans Always Been Poor?
Rob Urie
Wall Street and the Cycle of Crises
Andrew Levine
Viva Trump?
Ismael Hossein-Zadeh
Behind the Congressional Disagreements Over the Iran Nuclear Deal
Lawrence Ware – Marcus T. McCullough
I Won’t Say Amen: Three Black Christian Clichés That Must Go
Evan Jones
Zionism in Britain: a Neglected Chronicle
John Wight
Learning About the Migration Crisis From Ancient Rome
Andre Vltchek
Lebanon – What if it Fell?
Charles Pierson
How the US and the WTO Crushed India’s Subsidies for Solar Energy
Robert Fantina
Hillary Clinton, Palestine and the Long View
Ben Burgis
Gore Vidal Was Right: What Best of Enemies Leaves Out
Suzanne Gordon
How Vets May Suffer From McCain’s Latest Captivity
Robert Sandels - Nelson P. Valdés
The Cuban Adjustment Act: the Other Immigration Mess
Uri Avnery
The Molten Three: Israel’s Aborted Strike on Iran
John Stanton
Israel’s JINSA Earns Return on Investment: 190 Americans Admirals and Generals Oppose Iran Deal
Bill Yousman
The Fire This Time: Ta-Nehisi Coates’s “Between the World and Me”
Scott Parkin
Katrina Plus Ten: Climate Justice in Action
Michael Welton
The Conversable World: Finding a Compass in Post-9/11 Times
Brian Cloughley
Don’t be Black in America
Kent Paterson
In Search of the Great New Mexico Chile Pepper in a Post-NAFTA Era
Binoy Kampmark
Live Death on Air: The Killings at WDBJ
Gui Rochat
The Guise of American Democracy
Emma Scully
Vultures Over Puerto Rico: the Financial Implications of Dependency
Chuck Churchill
Is “White Skin Privilege” the Key to Understanding Racism?
Kathleen Wallace
The Id(iots) Emerge
Andrew Stewart
Zionist Hip-Hop: a Critical Look at Matisyahu
Gregg Shotwell
The Fate of the UAW: Study, Aim, Fire