If Washington “goes over the cliff,” the impact will be felt most directly by working people, including tax increases that will effectively cut take-home pay for workers by 7 percent and the immediate elimination of unemployment insurance for 2 million long-term jobless, followed soon after by the cutoff of benefits for another 1 million people. Federal workers will face unpaid furloughs, and essential social programs, from energy assistance to child nutrition to education grants, will be hit with across-the-board cuts.
This is only the beginning. The fiscal cliff is the first in a series of artificial deadlines established for the New Year. There will be another deadline in late February over raising the federal debt ceiling—the same issue that became the pretext in August 2011 for a bipartisan agreement to cut over $1 trillion in social spending over the next decade. In March, the “continuing resolution” adopted before the election to authorize federal spending for six months will expire.
Each deadline will be utilized as the occasion to go after the most important federal social programs: Social Security, Medicare and Medicaid, which provide retirement income and pay for health care for tens of millions of elderly, disabled and poor people. The phony debate over a minuscule tax increase for the rich—which will be quickly replaced with “comprehensive reform” to lower income and corporate taxes next year—is intended to conceal this reactionary agenda.
The overall strategy of the ruling class was evident in an interview with President Obama aired Sunday morning on NBC’s “Meet the Press” program. While most press attention focused on his remarks criticizing congressional Republicans for balking at even the slightest increase in taxes on the wealthy, there was comparably little commentary on Obama’s embrace of cuts in entitlement programs.
Challenged by moderator David Gregory to “talk tough to seniors,” Obama replied, “but I already have, David.” He cited his support for the so-called “chained” consumer price index, a revised formula for calculating increases in the cost of living that will reduce future benefits for Social Security recipients. “Highly unpopular among Democrats,” Obama continued. “Not something supported by AARP (American Association of Retired Persons). But in pursuit of strengthening Social Security for the long term, I’m willing to make those decisions.”
In the Orwellian language of American politics, “strengthening” a social program means permanently slashing the benefits it provides, just as “balance” and “fairness” mean gutting the conditions of tens of millions of working people while imposing a token and temporary tax increase on bankers and CEOs. According to Obama, if millionaires and billionaires pay slightly higher taxes, while the hungry eat less, poor children see the doctor less often, and the elderly lower their thermostats because they can’t pay the fuel bill, that constitutes “everybody doing their share.”