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A socialist newsweekly published in the interests of working people
Vol. 74/No. 5      February 8, 2010


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(lead article)
U.S. rulers prepare
deeper social cuts
Workers face more economic uncertainty
Reuters/Mario Anzuoni
Workers line up for jobs in southeast Los Angeles November 20. Obama administration plans tax breaks for business in answer to unemployment crisis.

January 27—As President Barack Obama readies his State of the Union speech, marking the first year of his presidency, neither capitalist party, the Democrats or Republicans, has any solutions to the grinding economic and social crisis. Workers face growing uncertainty.

The day before Obama’s speech, USA Today reported that the number of people on welfare rose for the first time in 15 years, when then-president William Clinton vowed to “end welfare as we know it.” Welfare programs that at one time aided more than 14 million people were slashed by Clinton. In fiscal 2008 3.8 million people received welfare payments. In 2009 this rose to 4 million.

More than 37 million people received food stamps last year, an 18 percent increase, while the number of people collecting unemployment benefits more than doubled, to about 9.1 million. On January 25 Wal Mart-owned Sam’s Club announced layoffs of 11,000 workers, mostly part-time employees. The next day Verizon said it was cutting 10,000 jobs.

In Obama’s speech, according to initial press reports, is a three-year spending freeze on education, nutrition, national parks, air traffic control, and farm subsidies. Exempt from the freeze are the Pentagon and Homeland Security budgets.

While White House officials say that Medicare, Medicaid, and Social Security could also be exempt, the New York Times notes that the freeze is meant to signal that Obama “is willing to make tough decisions.”

On January 19, the White House tentatively agreed to issue an executive order to create a bipartisan commission to propose changes—a code word for cuts—in federal entitlement programs including Medicare, Medicaid, and Social Security. The commission would deliver its recommendations after this fall’s congressional elections.

While laying the ground for deeper attacks on the rights, entitlements, and living standard of workers and farmers, Obama claimed that he will “fight for the middle class” and the “American Dream.” Initial reports on his proposal do not include any serious plan to create jobs. Instead, he is proposing a variety of tax credits that would allegedly ease the pressure of the economic crisis.  
Massachusetts election
Obama and the Democratic Party suffered a defeat January 19 when Republican Scott Brown beat Democrat Martha Coakley in a special election for the U.S. Senate seat in Massachusetts held by liberal icon Edward Kennedy until his death.

A big part of Brown’s victory was his opposition to the so-called health-care reform, which found an echo among many workers who sense that the “reform” would be used to restrict medical care. Brown had no concrete proposals for his own “reform” except to proclaim that “we can do better.”

Brown also campaigned against civilian trials for alleged terrorists and for “an across the board” tax cut to create jobs.

Obama rallied behind Coakley to no avail. During a January 17 day of campaigning for the Democratic candidate, Obama didn’t mention the health-care bill once.

In his victory speech, Brown did not mention the Republican Party except to say he will work with both parties.

After the election Brown told the Wall Street Journal that he thought that Obama is “doing a great job with North Korea, a nice job with Afghanistan.”

But prominent liberal columnist Paul Krugman criticized Obama January 26. In a column titled “Obama Liquidates Himself,” Krugman wrote, “A spending freeze? That’s the brilliant response of the Obama team to their first serious political setback?”

“It’s appalling on every level,” Krugman charged. “It’s bad economics, depressing demand when the economy is still suffering from mass unemployment.”  
Spirit of bipartisanship?
Some conservatives, however, are pleased with Obama’s proposals.

“Republicans, in a spirit of bipartisanship, should praise the president for beginning to come to his senses about too much government spending (and for acknowledging at the same time that national security spending can’t be frozen),” wrote Weekly Standard editor William Kristol.

Other conservatives are worried that if the Republicans make gains in November, they won’t do any better than Obama in dealing with the crisis.

Wall Street Journal columnist Peggy Noonan noted that Brown’s election victory is not as significant as it may seem. Brown’s “constituents,” Noonan said, “couldn’t care less about the fortunes” of the Republican Party.

Twelve days before the election, Noonan wrote a column titled, “The Risk of Catastrophic Victory: Obama is in the midst of one. Can the GOP avert one of their own?”

Noonan warns that the Republicans could win a majority in Congress in November, and still “be left unable to lead when their time comes.”
Related articles:
Working-class answers to crisis
Canada: Joblessness still high in so-called recovery
Major U.S. banks report gigantic profits for 2009

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