The Militant (logo)  

Vol. 72/No. 35      September 8, 2008

 
N.Y. state cuts hit workers,
protect wealthy bondholders
(front page)
 
BY BRIAN WILLIAMS  
NEW YORK—After a one-day emergency session August 19, the New York State Assembly and Senate overwhelmingly approved $1 billion in cuts to social programs that affect working people the most. On the chopping block was $500 million in health and Medicaid services and a 7 percent reduction in funds for the City University of New York.

The legislators were called back into session from their summer break by Gov. David Paterson to reopen the state budget passed in April. Paterson said the state was facing a $6.4 billion deficit for next year that in three years will balloon to $26.2 billion. The governor said this crisis “may yet be as challenging to the American population as even the Great Depression.” Several weeks earlier Paterson imposed a hiring freeze and cut state spending by $630 million or 7 percent.

The cuts hit “every area that we could find that we believed could absorb some pain,” stated Sen. Thomas Libous, deputy majority leader of the Assembly. The cuts include programs from homeless shelters to libraries, hospitals, nursing homes, and state universities.

As legislators met, the halls of the Capitol “were filled with chanting people opposed to any cuts in their health care program,” reported Associated Press. “People in wheel chairs protested outside the governor’s office.” Service Employees International Union Local 1199 issued a joint statement with the Greater New York Hospital Association expressing opposition to the health-care cuts.

The state has accumulated $52.8 billion in debt, which is owed to wealthy bondholders who profit off sizable interest payments allocated to them in each year’s budget. Bondholders are allocated $5.3 billion in “debt service costs,” a $400 million increase from the previous year. In addition, the budget projects $2.7 billion toward paying off the debt principal, which rose by $3.2 billion from the previous year. That’s $8 billion in this year’s budget for the wealthy bondholders.

While capitalist politicians discuss what social programs to cut and at what pace in order to reduce budget deficits, payment to the bondholders is never on the table for discussion.

In another development, New York State comptroller Thomas DiNapoli is seeking approval by the legislature to place a larger portion of state pensions in higher-risk investments. State pension assets are now $153.9 billion. Currently 25 percent of these funds can be placed in investments like private equity, real estate, and hedge funds that are at the heart of a growing crisis in the U.S. financial market.  
 
 
Front page (for this issue) | Home | Text-version home