BY ARGIRIS MALAPANIS

Days after his reelection to the presidency of the United States, William Jefferson Clinton began preparations to cut Medicare and Social Security under the banner of balancing the federal budget. In doing so, the Democratic president is pushing for a bipartisan agreement with the leaders of the Republican majority in Congress, who maintain differences with the White House over the pace and extent of government cuts on social entitlements.

After the initial euphoria on Wall Street about the outcome of the election, it's clear that tactical divisions on domestic policy remain among the owners of capital, and among the politicians who serve them in Washington. Neither "downsizing" and "reengineering," nor the stream of assaults on workers' social gains and democratic rights Clinton led during his first administration, have resulted in reversing the decline in the bosses' profit rates. As a result, the scandal-mongering against the president-elect and his aides, and the coarsening of politics it reflects, has not ebbed since November 5.

Since early November, Clinton and other Democratic politicians, Republican spokespeople in Congress, and a number of columnists in the big-business press have been peddling the idea that the Medicare and Social Security funds will soon go bankrupt. The proposed solution? Cuts are needed in order to "save" these social programs.

According to the November 11 New York Times, Clinton and House minority leader Richard Gephardt said that Medicare's "looming financial problems" could be dealt with by cutting payments to doctors and hospitals.

"My plan would cut payments to providers and make some other changes that would lengthen the life of the Medicare Trust Fund for a decade," Clinton said on the ABC news program "This Week."

Medicare, which covers health care for the elderly and disabled, was enacted in 1965 along with Medicaid, which provides health coverage for low income families. These programs were an extension of the concessions working people won through earlier labor battles, registered in the Social Security Act of 1935. Phantom of Social Security bankruptcy
Peter Peterson is a Wall Street investment banker who heads up the Concord Coalition, which has been leading the rulers' ideological assault on Social Security for years. In a recent full-page ad in the New York Times, the group asserted that "if we don't reform Social Security it could be running an annual deficit of $700 billion to $1.3 trillion annually by 2030."

An opinion column in the November 4 Christian Science Monitor noted that well-known economists and politicians now repeat arguments presented by Peterson in his latest book, a classic propaganda piece against social entitlements titled Will America Grow Up Before It Grows Old? How the Coming Social Crisis Threatens You, Your Family and Your Country. The Monitor story commented, "Purveyors of doom have set their panicky sights on the federal Social Security system. They claim a `demographic time bomb' of retiring baby boomers will hurl the nation into bankruptcy within the next few decades."

The columnist said that privatizing Social Security is one of the proposals discussed in ruling circles. "Only the fear of making the government's most popular and successful program a campaign issue has kept it off the front burner in Congress," the article concluded. "When the election is over, watch out."

Clinton began using such arguments to lay the groundwork for cutting Social Security soon after November 5. "Now down the road, there's the baby boom problem," he said at the post- election ABC news program where he discussed cutting Medicare.

During his first term Clinton had appointed a bipartisan Advisory Council on Social Security that was scheduled to issue a report with three options, all of which include putting hundreds of billions of dollars in Social Security taxes into the stock market. Two of the three plans would have individuals invest some or all of their Social Security taxes directly in individual accounts. This is the opposite of what the labor movement codified in the Social Security Act - guaranteed pension, disability, and unemployment benefit floors as a right for all.

A column in the November 18 Washington Post pointed to other proposals on how to cut Social Security. Author Alan Krueger said that one of the solutions to the supposedly impending bankruptcy of social security is redefining the federal Consumer Price Index (CPI), which he says probably "overstates the true cost of living." Social Security pensions are pegged to the CPI for cost-of-living adjustments. "A one point reduction in the CPI would save an estimated $150 billion over five years," Krueger stated.

The columnist then argued it may not be prudent to redefine an established federal index for this purpose, and offered another approach. "One way of skirting this issue, while improving the solvency and fairness of Social Security, would be to index Social Security benefits to wage growth," he said. "If wages grow by 2.9 percent a year, then Social Security benefits would grow by 2.9 percent as well." Krueger did not say what would happen to retirement benefits if wages stagnate or decline, as has been the case with average hourly real wages since the early 1970s. Tactical divisions among rulers
While meddling with federal retirement benefits may take a little more time, preparations to cut Medicare are on the front burner.

At a November 12 meeting with House majority leader Richard Armey, Senate majority leader Trent Lott, and House speaker Newton Gingrich, Clinton indicated he may go along with Republican proposals for a constitutional amendment to balance the budget in six years. "White House officials also retreated somewhat from Clinton's proposal to form a bipartisan commission to find ways to ensure the long-term solvency of Medicare," said an article in the November 13 Washington Post.

Republican Party leaders have scorned the bipartisan panel idea, saying that Clinton mocked their proposals to cut Medicare during the presidential contest. Clinton campaign ads said, "The president stopped [the GOP], protecting Medicare and education while balancing the budget."

While Clinton has stood by his campaign rhetoric, he and White House officials have pointed out several times since the election that Clinton's proposal to cut $124 billion from Medicare is not that far off from the Republicans' last offer of cutting $168 billion. The GOP had to retreat from the more drastic proposal in its now buried "Contract with America" to slash $270 billion from health benefits for the elderly and disabled.

Tactical differences remain, however. "Until the president lays out his balanced budget blueprint, complete with proposals for shrinking the ballooning Medicare program, Republican leaders say there is nothing to talk about," said an article in the November 11 Wall Street Journal.

Another reflection of the divisions among the U.S. rulers over how far and fast to go after social entitlements was Clinton's flip-flop on the so-called balanced budget amendment to the constitution. A day after Clinton announced he is willing to go along with the GOP proposal, White House officials said the president would "actively oppose" it.

A number of articles in the big-business press began pointing out that the "spirit of bipartisanship" that was touted by Clinton, Gingrich, and others in the days immediately following the election may be evaporating.

The slowing down of the rate of growth of the U.S. gross domestic product to 2.2 percent in the third quarter of 1996, compared to 4.7 percent the previous quarter, was one indication of the problems big business faces.

Simultaneously, the U.S. rulers are using Washington's military superiority to assert their domination in a world marked by increased competition among imperialist powers.

"The United States cannot and should not try to solve every problem in the world," said Clinton in his November 15 statement announcing that U.S. troops would stay in Bosnia until 1998 and GIs would be sent to central Africa. "But where our interests and our values are at stake, where we can make a difference, we must act and we must lead. Bosnia is such an example." Pornographication of politics
While debate on U.S. military intervention in Bosnia and Zaire has been minimal, the differences among U.S. rulers on domestic matters and their inability to resolve the problems facing U.S. capital are reflected in the ongoing "ethics investigations" and harsher tone of bourgeois politics.

The inquiry into Gingrich's affairs on charges he improperly used tax-exempt funds for political purposes is unfolding. According to the November 21 New York Times, Republican majority leader Richard Armey is now trying to replace most members of the "ethics committee" pursuing the investigation.

Meanwhile, conservative commentators have become more shrill since the elections in pressing the charges that Clinton received illegal campaign funds from Indonesian businessmen. William Safire describes the scandal in syndicated columns as the "Asian connection," while other conservatives refer to it as "a cancer on the Clinton administration." An editorial in the November 19 New York Post called for an independent counsel to investigate "Indogate."

The differences among the U.S. rulers notwithstanding, it is clear they are preparing for a more frontal assault on labor.

"Numerically it's doable," said Stanley Collender, chief budget analyst for the security firm Burson-Marsteller, referring to the prospect of eliminating the deficit in the federal budget by cutting Medicare and Social Security. "Politically, it's still tough because you've got to take on seniors and all that. But.... you've got a better shot at this than you've probably had in a decade."  
 
 
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