Socialist Worker

US budget deal will wreck lives

Issue No. 2263

Workers in the US face the most serious assault on their living standards in decades.

Republicans and Democrats this week voted overwhelmingly to slash $3 trillion from government spending over the next decade. The cuts package was being signed off as Socialist Worker went to press.

It is part of a deal that will allow the government to get into more debt in the short term by promising to spend less in the longer term. The impact on workers will be felt for years to come.

For unemployed workers, life will get even harder.

The deal contains no help for those out of work or any plan to stop rising unemployment. It will leave millions who can’t find work unable to make ends meet.

If you lose your job in the US, you can currently get unemployment benefit for between 20 and 26 weeks, depending on where you live.

Some 3.8 million people who have been out of work for longer than this are receiving emergency unemployment benefit.

But that’s due to expire at the end of the year. And any worker made unemployed after 1 July will only be entitled to the basic benefit up to 26 weeks.

Unemployment officially hit 9.2 percent in June—and it continues to rise.

The real figure is higher, because many people have simply given up looking for work.

The Medicare and Medicaid health programmes, which give some poor people access to healthcare, also face cuts.

The nature of the cuts hasn’t been finalised. But the government could raise the eligibility age for Medicare and make people pay more for it.

And it could cut Medicaid funding to states, which could leave nursing homes with no money.

All of this would hit the most vulnerable people.

It’s estimated that more than 50 million people rely on Medicaid—and that the numbers will soar to 100 million by 2021. Medicare covers more than 47 million people.

On top of this, unions warn that the deal will lead to job losses as government budgets are cut.

The politicians say that the US would have defaulted on its debt repayments if a deal hadn’t been agreed.

They say, as our government does here, that cuts are inevitable.

But there is no need to cut anything.

The US is the wealthiest country on the planet. Rich people in North America increased their wealth by 9.1 percent in 2010—to $11.6 trillion.

But Obama backed down over plans to impose tax rises on the rich, to reach a compromise with the Republicans.

Why did he agree a deal that could turn many people who supported him against him?

It’s not that Obama isn’t worried about the impact on his ratings or about next year’s presidential election.

That’s partly why he wanted tax increases for the rich—and why he wanted to avoid another budget debate in the run-up to the election.

But he is driven by the demands of the ruling class for higher profits. There are some differences between the Republicans and the Democrats. But the priority of both is to maintain the health of the rotten system of profits and exploitation.

This is more important than any notion of party loyalty.

The vote won’t resolve the political crisis in the US. There are deepening splits at the top.

Many Democrats aren’t happy with the deal—half of them voted against it.

It won’t solve the economic crisis either. It will simply try to force ordinary people to pay for it.

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Tue 2 Aug 2011, 17:38 BST
Issue No. 2263
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