Issue 194 of SOCIALIST REVIEW Published February 1996 Copyright © Socialist Review
For almost a month in December and early January, the US government ran out of money to pay for essential services and federal workers' salaries. But the shortfall didn't result from a natural disaster or a refusal of US creditors to loan it money. In fact, leaders of the US government purposely engineered the budget crisis.
President Clinton vetoed several parts of the budget legislation the Congress sent to him. The Congress were unable to gain the necessary two thirds majority to pass the budget over Clinton's veto.
The right wing Congress wants to slash hundreds of billions of dollars from popular programmes, claiming that the US must balance its government budget in seven years. At the same time, the Congress wants to hand out a $245 billion tax cut to families earning more than $100,000 per year.
The core of the dispute between Democrat Clinton and the Republican led Congress is the $1 trillion bill that funds social security pensions, Medicare medical aid for the elderly and the Medicaid programme of medical assistance for the poor. Clinton has seen his standing in opinion polls increase since he has posed as a defender of the elderly, children and the environment.
Because Clinton and Congress hadn't agreed yet, the US government began its 1996 fiscal year in October without a budget. Once in November and again in December, the Republican controlled Congress refused to pass temporary spending measures needed to fund government programmes and to pay federal workers.
So more than 280,000 government workers--concentrated in housing, environmental and social service agencies the Congress considered 'non-essential'--were sent home without pay cheques at the height of the Christmas holiday season. Another 500,000 workers--those working in agencies like the military the Congress considered 'essential'--worked, but received only partial payment.
Over the Christmas holidays, in cities around the country, federal employee unions organised demonstrations to call for an end to the lockout. On New Year's Day 1,000 federal workers demonstrated against the shutdown in Chicago.
When right wing Republican Congressman Carlos Moorehead of California asked diplomatic employees in Latin America to help him plan a tour of the region with other members of Congress, the diplomats refused. They wrote to Moorehead, saying, 'Frankly, we are disturbed at the thought that while American schoolchildren are being turned away from Smithsonian museums, national parks, monuments and memorials, some members of the US Congress are looking forward to seeing exotic attractions ... largely at the expense of the parents of those schoolchildren.'
The three week shutdown caused hardship for millions in addition to the furloughed workers. The Bureau of Indian Affairs office outside the Pine Ridge Reservation in South Dakota--the poorest area in the US--shut down. When the funding for the Environmental Protection Agency's toxic waste cleanup ran out in early January, 2,500 federal workers and 10,000 private sector workers employed by government contractors lost their jobs.
In early January federal contributions to states' unemployment insurance funds dried up, raising the prospect that some states--including the largest ones like Illinois and California--wouldn't be able to continue providing unemployment insurance.
The Republicans, hoping to exploit anger at government 'bureaucrats', instead found that millions of American workers empathised with government workers. Polls showed that more people blamed Republicans than Democrats for the budget mess.
Senator Robert Dole, the front runner among the Republicans to run against Clinton for president in November, jumped ship in early January, saying the budget deadlock had 'gone on long enough'. Within days Dole's Republican colleagues followed suit. The Congress passed--and Clinton signed--another temporary spending measure to reopen the government on 8 January.
It was an admission that the Republican strategy had failed. At a Republican rally in the state of Washington, House Speaker Newt Gingrich--the leader of congressional conservatives--admitted, 'We came pretty close to exhaustion, our strategy failed.'
Clinton and Gingrich have both proclaimed the 1996 presidential election a referendum on the direction of federal policy. But because the Republicans and Democrats are both bosses' parties, the budget bluster obscured the fact that Clinton and the Republicans have the same bottom line--balancing the federal budget by the year 2002.
It's not that the budget deficit represents some crisis. As a percentage of the gross domestic product it is proportionally smaller now than it was when Clinton took office--2.3 percent of the gross domestic product in 1995 compared to 4.9 percent in 1992. But it has become a crucial ideological argument underpinning a ruling class attack on the already paltry US welfare system.
In the midst of the December government shutdown, a group of more than 100 bosses of the US's leading corporations paid for full page ads in the New York Times, The Wall Street Journal and other leading newspapers calling for congressional and administration leaders to agree to a plan to balance the federal budget in seven years. 'Without a balanced budget', the ad warned, 'the party's over. No matter which party you're in.'
For most of last year Clinton had refused to back a seven year timetable. But in January, in a classic attempt to win support from the bosses while appearing as a 'lesser evil' to US voters, he proposed his own balanced budget plan. It calls for fewer cuts than the Congress wants, but the cuts it proposes in the Medicare and Medicaid programmes are still the biggest ever. 'Clinton has not drawn a line in the sand to retain the integrity of Medicare', Dean Baker, an Economic Policy Institute economists told US media critics Jeff Cohen and Norman Solomon. 'He's not really defending Medicare as a universal programme--he's just haggling over small dollar differences.'
One of Clinton's first initiatives in office was to announce a programme to cut up to a quarter of a million federal jobs. The Clinton administration has privatised work that federal workers did previously.
Although Clinton vetoed the Republicans draconian 'welfare reform' bill, he has still indicated that he will go along with Republican efforts to end the 60 year old guarantee of a federal right to aid for poor people.
As Cohen and Solomon concluded, 'By now, Clinton has ceded so much ground to the [Republicans] that they have long since succeeded in defining the terms of the "debate". Only public pressure in support of popular programmes has prevented further capitulation by the White House.'
Lance Selfa
Sharon Smith will be back in April