Who got robbed and who got richer

The debt ceiling theater

Volunteers work at the Greater Boston Food Bank preparing boxes for families. In 2022, 10.2% of U.S. households experienced hunger at some point. PHOTO: monkeyatlarge
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In 2021, almost half of U.S. workers, and much higher percentages of Black and Latinx ones, didn’t earn enough to afford a one-bedroom apartment.

What does this fact have to do with the brouhaha about suspending the debt ceiling that Congress passed on June 1, 2023? As it turns out, a lot. The corporate media focused on the phony fight between Republicans and Democrats over whether government could continue to pay its bills and avoid default. But the whole kerfuffle was really political theater to justify stealing from the poor and working class to fatten the rich.

Wealth inequality in the U.S. is so extreme that the richest 0.1% take in 196 times more than the entire bottom 90%. It is the only rich nation without universal health care, paid family leave, affordable college, paid vacations, child and elder care, and much more. Yet it continually cuts social safety net spending. And the periodic deal to raise the debt ceiling has become a tool to do it. This year’s pact was even worse. On top of cutting aid, it increased military spending, cut funding for IRS enforcement of what meager taxes are levied on the rich, and gratuitously gutted environmental laws.

First, a summary of provisions that hurt ordinary folks.

Attacks on working people. The agreement mandates restarting student loan payments, frozen during the Covid pandemic, by the end of August. It also stipulates they never be frozen again. Over four decades, the cost of earning an undergraduate degree nearly tripled. In 2020, over half of borrowers owed more than their original loans, due in large part to low wages. This is a crippling burden to them for decades.

The debt bill expands onerous work requirements on recipients of food stamps (the Supplemental Nutritional Assistance Program, SNAP) and welfare (Temporary Assistance to Needy Families, TANF). These conditions have been expanded to those between 50 and 54 years old without child dependents. Besides these rules being cruel to a group that can find jobs hard to get, they cut many who are eligible but who can’t negotiate the difficult paperwork. It will bring the specter of hunger to hundreds of thousands of older people.

The debt ceiling agreement covers “discretionary” spending. This excludes only Social Security and Medicare outlays, which are earned benefits with dedicated funding from workers’ paychecks. The deal limits non-military discretionary spending for 2024 to 2023 levels and for 2025 to 1% over them. Given the high rate of inflation, this actually means cuts of 8% or even more. These will affect nearly every area outside of the military, from social services such as housing, job training, education, and food and childcare assistance; to medical research, public health, and environmental protection.

The story is totally different for big business and the wealthy.

Gifts to corporations and the rich. The deal promises to roll back more than $20 billion, a quarter of the funding to the IRS already passed in the Inflation Reduction Act. This money was earmarked for increased staff for enforcement on rich tax cheats. The Congressional Budget Office estimates that this will cost the IRS over $40 billion in revenue. So much for this measure having anything to do with limiting federal indebtedness!

Beyond that, something never mentioned in the corporate media is that the primary reason for the ballooning debt is tax cuts for the rich granted during the G.W. Bush and Trump administrations. Most of these reductions have been made permanent, which slows repayment of the national debt more every year. By June, it was $32 trillion, of which $12.4 trillion would have been repaid if not for these tax cuts. Bipartisan votes have cemented all the disastrous laws to underfund government.

Another reason the federal debt is so huge is this country’s gigantic military spending, which in 2022 was greater than the next 10 countries of the world combined. It was already about half of the federal discretionary spending budget. Yet this deal would increase the Pentagon funding to $895 billion.

The oil and gas industry got enormous giveaways in the form of weakened environmental laws. The provisions are especially egregious because they have nothing to do with government spending, but are just pork barrel giveaways.

The bill exempts the fracked gas Mountain Valley Pipeline between West Virginia and Virginia from all environmental laws, mandating that all its pending permits be granted. This is a gift to Sen. Joe Manchin of West Virginia and is a climate disaster that environmental groups have been fighting tooth and nail.

The agreement further rewrites the entire National Environmental Policy Act. It allows corporations to write their own environmental impact statements, according to Sen. Jeff Merkeley of Oregon, who voted against it.

But why does the ceiling exist at all? No other country has such a thing. The periodic votes to raise it are not about whether to take on new debt, but whether the government can continue to pay the bills it has already committed to. Congress passes the spending and taxation laws, so why should it separately endorse paying the resulting tab?

Furthermore, the 14th Amendment states that the good credit of the U.S. must be upheld, so defaulting is arguably unconstitutional. And before the 2022 midterm elections, when Democrats held the majority in both houses of Congress, they could have raised the debt ceiling. They expressly decided not to try. President Biden could also have used executive action to avoid a default.

The debt ceiling is a distraction and excuse for highway robbery of workers, especially poor ones and youth. This bipartisan agreement, passed in both houses with more Democratic votes than Republican, demonstrates the dedication of both parties to the capitalist robber barons.

Yes, the national debt is skyrocketing. But cutting Social Security, Medicare, or other vital social services to pay for it is unacceptable. Working-class friendly solutions are to raise taxes on the rich and corporations, slash military spending, and strengthen labor laws so that workers can win livable wages. It’s not complicated. But knowing that the enemy includes both major parties is essential.

Send comments to FSnews@socialism.com.

Robbed: $116 billion cut from funding for human needs, including endangering food stamp benefits for 275,000 people.

Richer: Increases military spending to $895 billion. Does not address the
$12.4 trillion added to the debt by G.W. Bush and Trump tax cuts for the rich.

Sources: Center for American Progress; The New York Times; Congressional Budget Office


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