As the December 31, 2012 deadline fast approaches for decisions on what to do with trillions of dollars in federal programs set to expire on that date, speculation is rife as to whether a “Grand Bargain” will be struck. Politicians of both parties are posturing for position as headlines and pundits warn of “falling over the fiscal cliff.” The debates between the principal spokespersons of the Democratic and Republican parties are going off in many different directions, creating a maze of confusion and uncertainty.
The fact of the matter is that much of the hullabaloo is a sideshow to what is most at stake in the coming weeks. In the first place, under the “sequestration” — which unless changed by Congress will take effect January 1, 2013 — there will be an automatic across the board 10% cut in domestic programs, including education, food safety, child care, home heating, environment, and much more, as well as a 2% cut in payments to Medicare providers. This will be extremely damaging to hundreds of urgently needed human services programs. In addition, federal aid to the states and cities will be sharply curtailed.
At the same time, if cuts are enacted to Medicare, Medicaid and Social Security, this will jeopardize the health, welfare, and retirement security of the 90 million people who depend on these programs for their very existence.
A special target of the benefit-cutters is Medicare, with the emphasis on extending the eligibility date for coverage. Polls show that 71% of Democratic and 68% of Republican voters oppose any extension. Yet in a front page article in the December 1–2, 2012 Wall Street Journal titled “GOP Takes Aim at Entitlements,” Senate Minority Leader Mitch McConnell calls for such an extension, along with a number of other cuts. President Obama has in the past indicated a willingness to support legislation delaying the age for seniors to be eligible for Medicare coverage. In his “Grand Bargain” talks with Boehner in the summer of 2011, he also proposed $700 billion in Medicare cuts and additional cuts to Medicaid.
There is plenty of money available to deal with the debt and deficit without resorting to Draconian cuts in safety net programs: for starters, increase taxes on the wealthy; levy the payroll tax on all forms of income, including dividends, interest, rental and capital gains; levy a tax on stock transactions; levy a special financial tax on the big banks, corporations and investment houses which received trillions in stimulus funds and are now sitting on $2.5 trillion in cash as a result, which they’re not using to create jobs; eliminate the cap on Social Security earnings; slash the military/war budget; close corporate loopholes; and eliminate corporate welfare.
Note: If the Bush tax cuts were continued for another decade intact, it would mean $4.7 trillion more in deficits. So the big problem is on the tax side when it comes to the fiscal cliff, not the spending side.
We need to keep our eye on the ball and focus our energy and attention on the fight to preserve the safety net programs. For this reason, we in the Emergency Labor Network applaud the resolution adopted unanimously by the San Francisco Labor Council, AFL-CIO, on November 26, 2012, which we believe places the focus on what is most importantly at stake. Here is that resolution:
No Grand Bargain: Protect Social Security, Medicare, and Medicaid
Whereas, the real national deficit was caused by wars, tax cuts for the richest, reckless financial speculation, and bank bailouts; and
Whereas, both Democrats’ and Republicans’ proposals would cut Social Security, Medicare, Medicaid, and other vital safety net programs; and
Whereas, the proposed program cuts would hit women, people of color, and children hardest, the very populations that have most suffered unemployment, wage discrimination and stagnation, homelessness, food insecurity, and lack of medical care and education over the last 40 years of wealth transfer to the top; and
Whereas, focusing on the “middle class” hides the problem of expanding poverty; and
Whereas, even though Social Security has not contributed a cent to the deficit, and the Social Security Trust Fund is entirely solvent through 2038, the “Grand Bargainers” have discussed lowering benefits by raising the retirement age, changing the COLA formula using CPI, which increases at an even slower rate than the current inflation adjustment, and would cut benefits for current and future retirees affecting younger beneficiaries, veterans and women;
Whereas, there are 29 U.S. Senators, including Sen. Boxer but not Sen. Feinstein, who have signed a letter initiated by Sen. Bernie Sanders demanding no cuts to Social Security, explaining that Social Security cannot contribute to the deficit, and that it is fully funded by workers and their employers; and
Whereas, Democrats and Republicans have used the “Fiscal Cliff” as a guise of “shared sacrifice” when our real need is stable, well-paying jobs for the tens of millions of un- or under-employed workers, and rebuilding the nation’s debilitated infrastructure, education, housing, and distorted medical system; and
Whereas, health insurance corporations continually escalate health care costs and cause workers to carry more of the cost burden.
Therefore, be it resolved, the San Francisco Labor Council endorse and support the following:
No Cuts to Social Security, Medicare, Medicaid, or Other Social Programs. No cuts in eligibility range, benefit amounts, or cost-of-living increases, no means testing of benefits, no out-of-pocket cost increases, and no cuts to providers. Scrap the cap on payroll taxes (FICA) and require those earning more than $110,100 to pay FICA on all their income.
Make Corporations and the Rich Pay for What They Have Withheld for Decades. Restore the pre-Bush tax rates on the top 2%. No compromises such as eliminating classes of deductions or caps on total deductions that could ease the burden on the 2% and/or penalize low- and middle-income people. No decrease in corporate tax rates. More revenue through additional tax brackets on million- billionaires, tax investment and inheritance income as regular income.
Be it further resolved, that the San Francisco Labor Council circulates this resolution among union membership urging them to support actions on this Resolution.
Be it finally resolved, that the San Francisco Labor Council send a letter to both Sen. Dianne Feinstein and Sen. Harry Reid based on this Resolution.
Submitted by SFLC Executive Committee members Conny Ford (OPEIU Local 3), Maria Guillen (SEIU Local 1021) and Alan Benjamin (OPEIU Local 3) and adopted unanimously by the San Francisco Labor Council on November 26, 2012.
San Francisco Labor Council
We urge that similar resolutions be adopted by labor organizations across the country, with copies to the national AFL-CIO and Change to Win, as well as to members of Congress and the president.
We also urge that the demand for continuation of unemployment insurance, due to expire December 31 of this year, be included in such resolutions.
Such resolutions are critically needed at this time. So are mobilizations that help give voice to the overwhelming majority, which opposes cuts to the safety net.
Surely we have learned enough by now not to rely on assurances by politicians of either major party, whose positions change from day to day, that the safety net benefits will be protected. Here is one notable example: the Obama administration had been saying since its November 6 election victory that the tax issue had to be settled first before cuts in “entitlements” would be addressed. But now they have proposed $400 billion in cuts for Medicare and other social programs (New York Times, 11/30/2012). And that’s just an opening bargaining position. It sets a floor for cuts while opening wide the door for more substantial cuts as bargaining with the Republicans proceeds.
We believe that the labor movement and our community allies must bring our great power and resources to bear at this fateful moment by taking to the streets in massive numbers to demand “No Cuts to Safety Net Programs! Medicare for All! Extend Unemployment Insurance! Expand Medicaid Coverage in Every State!” Emergency mass demonstrations should be mounted in every state of the union to protest any cuts either to the safety net programs or to the social programs under the automatic trigger. Preparations for a giant march on Washington to demand “NO CUTS!” should also begin without delay. It’s time to pull out all the stops!