Workers Fed Up With Obama-Demo Healthcare Reform “It’s worse than NAFTA.”

Labor Notes, January 20, 2010

Anger over Health Care Bill Creates Uncertain Future

By Jane Slaughter

A Massachusetts local union president called it before the January 19 vote for senator: “I’ve never seen this much anger at the Democrats from union people,” said Jeff Crosby, president of a General Electric factory local near Boston, as he prepared a last-minute leaflet to hand out in the plant. “It’s worse than NAFTA.”

Top union leaders had bargained a compromise slowing down the health care benefits tax President Obama insisted on, but it was not enough to placate union members—and others—infuriated that Obama had broken his campaign promise not to tax benefits.

Crosby said his members were threatening to vote Republican to stop the tax, since 60 Democratic senators and no Republicans had voted for it. In Massachusetts’ special election they chose empty-suit Republican Scott Brown over a Democrat bound to cement the benefits tax in place.

In a Suffolk University poll conducted a week before the election, union-household voters in Massachusetts reported only 45 percent support for the Democratic candidate; union voters nationally backed Obama by 60 percent in 2008.

According to those on a January 14 conference call with AFL-CIO President Rich Trumka, Massachusetts state fed President Bobby Haynes exploded in anger, blaming top union leaders for a terrible health care bill and for losing the Massachusetts election—and thus the Dems’ 60th Senate seat, needed to ensure the health care bill’s passage (and the rest of labor’s agenda, labor law and immigration reform).

Obama took a hands-off approach to the content of the bill as it crept through Congress. He didn’t insist on a public option nor a strong employer mandate to provide insurance. It was hard not to notice that the only issue on which he took a hard stand was taxing benefits.

At his meeting with a dozen labor leaders at the White House January 11, Obama was firm that a tax on benefits was a must-have—despite his campaign promise to the contrary. “We have a lot of video clips,” said Machinists President Thomas Buffenbarger.

Although the benefits tax was not the only issue on Massachusetts voters’ minds (the faltering economy was the No. 1 concern in the Suffolk poll), it was one of the clearest examples of the Obama administration’s tilt away from working class voters, beginning with the bank bailout.

Trumka too had predicted that the health care mess would backfire on Democrats. In a January 11 speech at the National Press Club, he said, “In 1992, workers voted for Democrats who promised action on jobs, who talked about reining in corporate greed, and who promised health care reform. Instead, we got NAFTA, an emboldened Wall Street—and not much more. [In 1994] there was no way to persuade enough working Americans to go to the polls when they couldn’t tell the difference between the two parties.”

NAFTA, which dealt a heavy blow to U.S. manufacturing, was voted up by Congress in 1993 after intense cajoling by President Clinton, garnering the votes of 102 House Democrats. Clinton lost the Democratic majority in Congress the next year—and never got it back.

LET’S MAKE A DEAL

As the likely House-Senate compromise took shape in early January, it appeared certain that if the bill passed, people with good (or just expensive) benefits would face a steep 40 percent tax likely to push them into inferior plans.

So labor leaders reached a deal with White House negotiators January 14 that accepted the tax they’d previously declared unacceptable. The deal announced by Trumka and his counterparts at Change to Win and the National Education Association would have exempted those in union-negotiated plans and state and local employees from the tax until 2018.

It also would have raised the threshold at which the tax kicked in for many other plans: those containing significant numbers of women, older workers, or retirees age 55 and up, or those in high-cost states, the latter affecting more than 38 million workers. Those provisions would have delayed those groups’ hit as well.

Trumka’s goal was to exempt as many people as possible, union and non-union, from ever paying the tax, though only the velocity of health care cost inflation would have proved how successful he was.

“Most of the 31 million insured employees who would be hit by the excise tax are not union members,” Trumka noted before the deal was struck. But in the end unions bought extra time for their members at the cost of making themselves look self-interested. The deal will create awkward moments for union health care activists who’ve spent years trying to build broad coalitions.

STILL OPPOSED

Not all top union leaders backed the compromise plan. Buffenbarger told Labor Notes his members at Boeing, Lockheed Martin, and General Dynamics were already over the $23,000 threshold at which the tax would originally kick in.

“No bill is better than this bill,” Buffenbarger said. “We don’t care what the amount is that they peg it to: because of inflation, whatever number will be gobbled up pretty quickly.”

Firefighters President Harold Schaitberger said his union didn’t ask for the bill’s special, higher threshold for first responders, $26,000 rather than $23,000. The provision was worthless, he said, because most of his members are pooled in larger municipal plans, with no mechanism to segregate them out. “We’re not going to buy into a special deal for us,” Schaitberger said.

The Steelworkers’ Leo Gerard backed the compromise, telling Labor Notes he was thinking about Senator Jim DeMint, “that right-wing nut from one of the Carolinas,” who’s said he wants to make health care Obama’s Waterloo.

“We have to do everything to make sure we get a good bill so we can move forward with the rest of the president’s agenda as quickly as possible,” Gerard said.

Insiders say Trumka sold his compromise by arguing that health care reform had to get done so Congress could tackle long-delayed labor law reform—the Employee Free Choice Act.

Labor’s weakness throughout the health care reform process put a question mark over EFCA anyway, and even the question mark lay in tatters after the Massachusetts election.

Buffenbarger—who backed Hillary Clinton in the primaries—was a pessimist in any case. “We’re not going to get EFCA anyway,” he said. “It’s an election year. No way they’re going to touch it.”

TURN TO THE STATES

One bright spot could emerge from this winter’s health care debacle: union members not pushed into the arms of the tea-partiers could become convinced that “Medicare for All” is the only solution.

“It may mean more people are apt to be engaged on single payer because they’re getting hit themselves,” said Lenny Potash, a retired AFSCME member and co-chair of the Labor Taskforce for Universal Healthcare in Los Angeles.

Activists in California and Vermont have already begun serious work on state single-payer efforts.

The Vermont Workers Center turned out 350 people to legislative hearings January 12 to testify for the state’s single-payer bill. Senator Bernie Sanders was followed by union nurses.

The center, the state’s Jobs with Justice affiliate, began organizing in earnest last year: a rally of 1,000 at the State Capitol on a work day; organized committees in every county; a dozen regional hearings. The result, says co-chair Traven Leyshon, is that “we have changed what’s politically possible. As recently as September the legislature said they couldn’t be bothered with single payer.”

All Democratic candidates for governor next fall say they support single payer (though Leyshon recalls former Governor Howard Dean, who “was always for single payer till the day he became governor”). The Democrats and the Progressive Party together have a veto-proof two-thirds majority in both houses.

A new single-payer bill, just introduced by a Progressive legislator, includes a just transition for insurance company workers and others who would lose their jobs under a single-payer system. The legislation was written so as to survive legal challenges.

SINGLE PAYER IN ONE STATE

California activists will back a single-payer bill starting this month, though Governor Arnold Schwarzenegger, who’s in his last year, is certain to veto it for the third time (similar bills passed in 2006 and 2008). The campaign kicked off January 11 with 1,000 members of the California Health Professional Student Alliance and others rallying in Sacramento.

Michael Lighty of the California Nurses Association explained that winning single payer is a multi-year project: heavy education this year, electing a Democratic governor who won’t veto single payer this fall, passing a new bill, taking the measure to the voters in a referendum. The media campaign alone could cost as much as $20 million.

What about the cost, in a state that’s broke? Cate Engel of the Labor Taskforce for Universal Healthcare said the bill ultimately would save California billions of dollars, by reducing administrative costs and using the state’s mammoth purchasing power to force drug and equipment prices down.

What about California unions that haven’t backed single payer—or ditched the idea before the fight even began, citing “political viability”? Well, said Lighty, “we saw what happened on the national level when they went for public option over single payer because of viability.”

Bill Bryce is the Jobs with Justice organizer in Detroit. He’s shaking his head over the lost opportunities of 2009—the year when Obama rode in on a wave of hope for change and corporations were in disgrace because of the financial fiasco.

“You’re the president, you appear on TV and say, ‘I have a suggestion, let’s tax Wall Street bonuses at 50 percent and defray the cost of health care,’” Bryce said. “If this was not the time to take on the insurance companies and the banks, just when will that time come?”

shortlink to this post:  http://wp.me/p3xLR-mg

The Democrats don’t want to abolish the private insurance industry. They are capitalists.

“For the Democrats, with the exception of John Conyers and a few others, they simply don’t want to abolish the private insurance industry. They are capitalists and believe in the capitalist system that makes health care a commodity to be bought and sold. For them, health care is not a human right. … One minute HCAN is calling out the insurance industry for the profit-hungry killers they are, then they argue the companies need to stay in business to compete against a public plan honestly in the marketplace.“

Counterpunch,  April 23, 2009

Selling Out Single Payer

“As we roll out new products we will continue to price businesses for appropriate margins. We will not sacrifice profitability for membership.”

– Angela Braly, Wellpoint CEO

At the Health Care for America Now (HCAN) and Citizen Action Illinois sponsored rally in Chicago last weekend, single-payer advocates confronted HCAN leadership and Democratic Congresswoman Jan Schakowsky (D-Illinois) who instead of working to pass HR 676, John Conyers single-payer bill titled the United States National Health Insurance Act, are supporting the so called “public option.”

What the public option plan is, no one can exactly say. There are no concrete proposals spelling out what the plan would include, who could join it, how much it would cost, or how it would be funded. But the details don’t matter, they advocated for it anyway.

In a heated exchange with Schakowsky before the rally, she argued HR 676 (she is a cosponsor of the bill, yes that’s right) has no chance of passing and something has to be passed this year. She lied and said there isn’t enough support for single-payer, but there is for a public option. I and other activists challenged Schakowsky on every assertion and demanded she fight to pass HR 676. We said the insurance industry is going to fight just as hard against a public option as it will single-payer so let’s have a smackdown for single-payer. We argued the passage of HR 676 would guarantee an end to the crisis and finally make health care a human right that could never be taken away. She got pissed and complained loudly to her staff as she walked into the building, “Can you believe she is lecturing me?” I yelled after her, “I’m just expressing my opinion, I’m your constituency.”

The rally was a slick “Sell out single-payer and confuse em’ show” from start to finish, replete with retro 70’s song Ain’t no Stoppin’ Us Now blasting into the auditorium.

HCAN staffers, state representatives, Tom Balanoff – President of SEIU Local 1, small business owners, patients, doctors and medical students all took the stage, outlined different aspects of the crisis, and rightfully denounced the insurance and pharmaceutical companies. Their solution: the creation of a public plan to compete against the private insurance industry they despise. Speaker after speaker projected a wish list of health care reforms onto the nonexistent public option plan: benefits must be comprehensive, coverage must be affordable, no denial of care, and equal access to quality care. Who could disagree if a plan like that could actually be enacted? The problem is the United States will never, ever get a plan like that while the private insurance industry is still breathing. HCAN and liberal Democrats have to engage in this “magical thinking” in order to convince a skeptical public that a public option embedded in a for-profit system can work. Only a single-payer system, one that drives a stake through the heart of the insatiably greedy insurance corporations once and for all, can deliver on those promises.

A little history is in order.

The American health insurance system is based on the avoidance of the elderly and sick so insurers didn’t care much when Medicare was created: seniors have complex and costly health care needs that cut into profit margins. Let the government and taxpayers foot the bill for old people. Plus, people aren’t eligible for Medicare until they turn 65 so the vampires would have decades of opportunity to bleed Americans into medical bankruptcy. A similar dynamic was at work with Medicaid: poor people tend to have chronic health problems and that cuts into profit margins. Let the government and the taxpayers take care of them, but the minute they are healthy enough to work, kick ‘em out of the program and into the clutches of the vampires or the ranks of the uninsured. Whose left? Everybody in between. That’s what is driving the insurance industry and Karen Ignagni, the Chief Evil Officer (CEO) of America’s Health Insurance Plans (AHIP), into a frenzy. They fear a public plan will snatch away “their” market: the millions of people who don’t fall into the above categories of old and poor, especially the young and the healthy. It’s the profits, stupid!

Ignagni and the industry are whining that if a new government insurance program is created to compete with them, like Medicare, that’s unfair competition and they’d be driven out of business. Ohhh, don’t you feel sorry for Ignagni and all the other millionaire CEOs?

They think a government health plan would be unfair to them. But they’re exaggerating the effects a public plan would have on their pursuit of profit. Just look at how they have sunk fangs into Medicare.

Doctors Himmelstein and Woolhandler from Physicians for a National Health Program (PNHP) explain:

“A quarter century of experience with public/private competition in the Medicare program demonstrates that the private plans will not allow a level playing field. Despite strict regulation, private insurers have successfully cherry picked healthier seniors, and have exploited regional health spending differences to their advantage. They have progressively undermined the public plan – which started as single-payer for seniors and now has become a funding mechanism for HMOs – and a place to dump the unprofitably ill. A public plan option doesn’t lead toward single-payer, but toward the segregation of patients, with profitable ones in private plans and unprofitable ones in the public one.”

Private Medicare Advantage plans cost the government 13 percent more per beneficiary on average in 2008, and overhead for private plans is also much higher, at 13 percent, compared to 2-3 percent in traditional Medicare. Of the 45 million Medicare recipients, 23 percent are in private plans. Most Americans aren’t aware of the extent of privatization of Medicare.

What is the lesson HCAN draws from the privatization of Medicare? On their website an article is posted titled, Will Government Give Public Health Insurance an Unfair Advantage? Experience Tells Us No. Experience shows the government has given an unfair advantage to private insurers when it comes to the Medicare program, which HCAN acknowledges. In twisted logic that is hard to follow, HCAN thinks that’s a good thing, it’s proof the government won’t lower reimbursement rates or impose cost controls on private insurers. Now HCAN is all about reassuring the insurance industry they claim to loathe so much they only want a public plan to compete against them on a level playing field: the goal is not to drive them out of business.

This is the logic that confuses people mightily. One minute HCAN is calling out the insurance industry for the profit-hungry killers they are, then they argue the companies need to stay in business to compete against a public plan honestly in the marketplace – even though they agree they never compete fairly, Medicare being the prime example.

The health care reform proposals advocated by Jacob Hacker from the University of California at Berkeley are suddenly all the rage, but there is nothing new about them. He proposes a national health exchange of private plans with the addition of a public option (essentially Obama’s position.) Hacker, like HCAN, is careful to assuage the fears of the private insurers and says under his scheme, “More Americans have private insurance after reform than do before – either through their employer or through the national exchange.” Smells a bit like Massachusetts where 200,000 people remain uninsured and the costs to subsidize the program have doubled from $630 million to $1.3 billion.
Single-payer advocates oppose the creation of a public plan for a different set of reasons.

1. It doesn’t make health care a human right that can never be taken away.
2. It continues to divide, devalue, and define people by their health status.
3. It can’t address the endemic racial and gender disparities in the system, including the 12 million undocumented.
4. It leaves the employer based system of health care provision intact. That link has to be broken so workers are free to change jobs, go on strike and not fear loss of coverage.
5. The system would continue to have multiple payers and therefore the complexity and gaps in coverage that are inevitable when there are numerous bureaucracies to navigate.
6. Where will the money come from to finance the plan, especially in a time of economic recession, like right now? A public plan is not fiscally sustainable because it’s rooted in a multiple payer system that foregoes at least 84% of administrative savings.

Single-payer on the other hand, would immediately inject 400 billion into the system by eliminating bureaucracy, billing apparatus, administrative waste, advertising, corporate profits, and CEO compensation. That’s enough money to bring everyone into the system with no co-pays or deductibles.

We don’t need any more feasibility studies or examinations of  single-payer in other countries. It’s a proven fact that a single-payer system can cover everyone and control costs. Period, end of discussion.

So the question becomes why don’t the Democrats and HCAN fight to get rid of the parasitic private health insurance industry (the source of the crisis) once and for all instead of constantly and unsuccessfully, decade after decade, trying to rein in, regulate, and do an end run around them?

For the Democrats, with the exception of John Conyers and a few others, they simply don’t want to abolish the private insurance industry. They are capitalists and believe in the capitalist system that makes health care a commodity to be bought and sold. For them, health care is not a human right. And importantly, they don’t want to take on President Obama who is opposed to single-payer. Like the true cowards they are, they will not oppose Obama on health care reform even though they disagree with him.

HCAN thinks it’s impossible to get rid of the insurance companies, they’re too powerful, and they have too much money and influence. They don’t believe a large social movement can be built to take on and win against the insurers and the government. The leadership of HCAN are the ones who would have said under slavery, “We can’t win abolition, so let’s settle for a few reforms that make the lives of slaves more bearable.”

This attitude is astonishing given the sea change in consciousness around health care. A number of events have coalesced to make winning a single-payer system possible. No longer does the invoking of “socialized medicine” scare people, not after the government has socialized billions of dollars of losses in the financial sector. If the government can bail out AIG, why not the health care system? Poll after poll shows the majority of Americans want a government run health care system that guarantees health care. People often express this by saying, “I want what they have in Canada.” Physicians used to be an obstacle to single-payer, now 59% support single-payer.

Employment-based health care is collapsing and employers want to get out of the business of providing health care to workers: it costs too much. Millions of laid off workers now realize tying insurance to employment status is a disaster; lose your job, lose coverage. Those with jobs are paying staggering premium increases for less coverage. Single-payer legislation has been introduced into the House HR 676, and SB 703 in the Senate. There is a grassroots movement, including unions, all over the country organizing and fighting for single-payer. And most significantly, people are ANGRY and want change.

HCAN and Democrats like Schakowsky are deceiving and leading people down yet another dead end alley of incremental reform. We’ve had decades of incremental reform and now there are 50 million uninsured, 25 million underinsured and between 18,000 to 100,000 people die every year because they lack access to health care. For spineless Democrats like Schakowsky and HCAN, the day will never come when single-payer is “politically feasible,” because if now isn’t the time, when will it be?

The fight to make health care a human right is the new civil rights struggle. We are standing on the shoulders of all the great social movements that have come before us.

The time to win single-payer has never been better. We are going to keep fighting like hell to destroy the corporate killers, not create a faux option that allows them to live another day.

Sí se puede, yes we can!

Helen Redmond is a member of the Chicago Single-Payer Action Network and a Licensed Clinical Social Worker. She works in the emergency room at Cook County Hospital and blogs at http://helenredmond.wordpress.com She can be reached at redmondmadrid@yahoo.com

California Democrats toss poor, elderly, disabled, and working class overboard

“This is absolutely parallel to the fascism of Europe during the 1930s, in it’s broad attack on the elderly, disabled and poor, who are being scapegoated just as the Jews of Europe were in the 30s. They are turning citizens into aliens, and are trying to turn the elderly and disabled into criminals. I can bear witness to the damage being done to people in my generation, by the horrific effects of the budget cuts taking place,” said Walden, “and I further believe that we have become living targets of a fascist state. As witness to recent events, I am convinced that we are on the road to fascism.”

Indybay Media, July 25, 2009

Democrats sell out California’s poor, elderly, and disabled in budget deal

by Lynda Carson of Tenants Rule

California’s phony bleeding heart liberal democrats have just helped to pass a republican budget deal that shreds California’s safety net, by cutting $15.5 billion from the states service sector to partially close a $26.3 billion funding shortfall in state revenues.

Among other things, the democrats supported a $1.3 billion cut to MediCal, a $2.8 billion cut to the state wide university school system, and a $6 billion cut to California’s K-12 schools. The democratic leadership also supported the republicans push to slash the children’s health insurance program known as Healthy Families, In-Home Supportive Services and the CalWORKs program by cutting $878 million or more in coming months.

Rather than raising taxes on the rich and the major corporations that fail to pay their fair share of the tax burden in California, the democrats chose to side with the republicans and two bit actor ‘Schwarzenegger’ turned governor, in stealing precious resources meant to assist students, children, the sick, disabled, elderly, poor and the working middle class.

Meanwhile, Congresswoman Barbara Lee and other phony liberals continue to remain silent about the budget cutting process taking place in Sacramento, while the true extent of the attacks on the poor, elderly and disabled reaches new heights of deception and depravity.

During recent weeks, numerous calls made to Congresswoman Lee’s office inquiring as to why the powerful congresswoman remains silent about the attack on California’s safety net, have resulted in nothing more than a “BIG NO COMMENT,” coming from her staffers in Washington, including her local spokesperson Ricky Graham, in Oakland. “California’s budget crisis is a state issue, not a federal issue, and therefore Congresswoman Lee has no comment,” said Graham.

Considering that Congresswoman Lee represents millions of people in the great state of California, Ricky Graham’s statement was totally lacking in credibility and humanity.

As California’s democratic leadership including Assembly Speaker Karen Bass and Pro Tem Darrel Steinberg along with a total of 18 democrat sell-outs who supported the republican’s attack on the safety net try to conceal how much damage they have wrought upon the general public, hundreds of thousands of Californians will be hit hard in future months by the budget deal that protects the interests of the mighty rich, as it crushes the lives and interests of the working class poor.

Making matters worse for the elderly, disabled and poor, the democratic leadership granted extreme new powers to the republican minority by agreeing to proposals that do major damage to COLA’s (cost of living increases) for those in CalWORK’s, SSP and other areas of the states safety net, by requiring that any new COLAs for the people in those programs, must be approved by a two-thirds vote in future budget proposals.

At a small July 22, rally in front of Oakland City Hall, Eleanor Walden and her daughter Nasira, publicly spoke out against the republican budget cutting proposals along with Zachary Norris of ‘Books Not Bars’, and Kevin D. Shields the ‘DSRP Coordinator’ for the Disabled Students Program at the University of California, in Berkeley.

“The thought of the democrats siding with the republicans in the fascist proposals being passed to make the elderly and disabled get finger printed because of their participation in the ‘In-Home Supportive Services Program’, is enough to make my blood boil,” said Eleanor Walden, a Berkeley scholar of 20th century American history and folklore.

“This is absolutely parallel to the fascism of Europe during the 1930s, in it’s broad attack on the elderly, disabled and poor, who are being scapegoated just as the Jews of Europe were in the 30s. They are turning citizens into aliens, and are trying to turn the elderly and disabled into criminals. I can bear witness to the damage being done to people in my generation, by the horrific effects of the budget cuts taking place,” said Walden, “and I further believe that we have become living targets of a fascist state. As witness to recent events, I am convinced that we are on the road to fascism.”

Kevin Shields the DSRP Coordinator for disabled students said, “By cutting the social services desperately needed by the disabled and elderly, you create a whole new class of citizens who become angry, frustrated and disillusioned about the system that was meant to assist them in their time of need.”

Lydia Gans of Food Not Bombs said, “We already are seeing a huge increase in the homeless and hungry, due to the effects of a bad economy during our feeding times at People’s Park. The non profits who usually help out are losing funding and donations, and this latest round of budget cutting proposals will increase the level of homelessness and hunger all across the state. What should be happening, is that everyone affected by the budget cuts should be in the streets of Sacramento and cities across the state to protest against the inhumanity and catastrophic effects that are taking place in everyday peoples lives.”

As being proposed by state law makers, theres an additional $8 million in funding to be slashed from the budget for state parks, on top of the $226 million in cuts to IHSS, plus $528 million from CalWORKS, including $124 million in cuts from the Healthy Families program that will negatively affect 930,000 low-income children.

SSI/SSP recipients have already taken a huge 6.4% cut from the state assistance program since February 2009, including the suspension of their cost of living increases that were promised to be payed back, after being grabbed by the governor. It will be nearly impossible to restore the cost of living increases now that the democrats gave new sweeping powers to the republicans who are demanding a two-thirds majority vote to allow a cost of living adjustment to occur in future months and years.

As the democrats try to conceal and deceive the public about the true extent of damage they have done to California’s safety net by siding with the republicans in the vicious attack on children, the disabled, elderly and working class poor, additional budget cuts are expected as the governor prepares to use the line item veto during the next few days to slash another $1.1 billion dollars from the budget, in an attempt to balance the budget on the backs of the poor.

A press conference and rally for the ‘People’s Budget Fix’, calling for criminal justice reforms that will increase public safety, protect the social safety net and save the state billions, will take place on July 30, between 11am – 12pm, at the Elihu M. Harris State Building, 1515 Clay St, Oakland, near the 12th St, BART Station.

Contact Jennifer Kim; Jennifer [at] ellabakercenter.org or (510) 285-8234 for more details about the July 30 rally.

Rejection of California budget sets stage for even larger spending cuts

World Socialist Web Site, June 25, 2009

Rejection of California budget sets stage for even larger spending cuts

By Kevin Martinez and Joe Kishore
25 June 2009

The California legislature failed to get the two-thirds vote needed to pass a Democratic Party proposal to address the state’s $24 billion budget deficit. Democrats will now enter closed-door negotiations with Governor Arnold Schwarzenegger on a compromise that will include even more massive cuts in social services.

Discussions between the two parties have been ongoing for the last several weeks, much of it in secret and with no public input. Both sides have already agreed that draconian cuts in basic social programs are necessary.

To offset some cuts, however, Democrats had proposed a variety of mainly regressive tax increases, which require the support of a two-thirds majority in the legislature. This proposal failed as expected on Wednesday, largely along party lines. The Democrats control both houses of the state legislature, but do not have a two-thirds majority.

A proposal advanced by Schwarzenegger calls for $16 billion in budget cuts. These include eliminating the state welfare program; shutting down Healthy Families, the health insurance program for 930,000 children; closing 220 state parks; and ending Cal-Grants, which provides aid to poorer students to attend college. Schwarzenegger is also proposing a 5 percent pay cut for state workers, in addition to a 10 percent pay cut already announced.

Public education will be singled out for a large share of the budget cuts. About $5.3 billion would be taken from K-12 education and community colleges over next year, on top of the billions in cuts that have already been enacted.

The so-called “alternative” proposed by the Democrats was a slightly less severe program of $11 billion in budget cuts. The Democrats propose cutting $4.5 billion from K-12 education, $2.8 billion from higher education, and $2.6 billion from health and human services.

Democrats also proposed $2.2 billion in tax increases, including a 9.9 percent levy on oil extracted in California, a $1.50 per pack cigarette tax and a $15 registration fee for vehicles. In an accounting move designed to save $1 billion, Democrats have proposed pushing state workers’ paychecks back one day from June 30 to July 1, the start of the next fiscal year.

Senate President Pro Tem Darrell Steinberg, a Democrat from Sacramento, told the Pasadena Star News, “We present a budget where everybody feels some pain; every part of the safety net takes a cut.”

In fact, both Democrats and Republicans are determined to make the working class pay for the crisis. No matter what compromise is now reached, either through a combination of borrowing from local governments, accounting maneuvering, tax levies, or selling off state assets, a massive attack on the social infrastructure of California is underway.

The Democratic Party accepts the argument that the only way to fix California’s budget deficit is to strangle what remains of public education and the social safety net. Senator Gloria Romero, a Democrat, told The Los Angeles Times, “When someone tells us ‘No new cuts,’ I say, ‘Look, don’t tell me that.’…There is the sense that we must do what we must do to keep California solvent.”

Indeed, the proposed tax increases were largely for show. Even before the vote, Democrats acknowledged that they would not pass. Last week Schwarzenegger responded to a question about what kind of fight he expected over the tax increases by responding, “Well, what is being said and what is being done, as you know, are sometimes two different things.”

The Mercury News commented: “Schwarzenegger was suggesting that Democrats were posturing on their $2.1 billion in tax proposals, putting on what he calls Kabuki theater for their constituents before he expected them to relent to the reality that Republicans will never agree to taxes as part of the solutions lawmakers must find to close the $24.3 billion deficit.”

The budget crisis takes place against the backdrop of the economic collapse of California, the most populous state in the US and, if measured as an independent country, the eight largest economy in the world.

According to government officials, the state will be insolvent by July 28, which has prompted Governor Arnold Schwarzenegger to threaten to bring the government to a “grinding halt” and stop borrowing to cover the state’s expenses.

The state comptroller, John Chiang, has warned that without a new budget the state will begin issuing “IOUs” in place of cash to social service agencies, private contractors and state vendors. The state’s cash crunch, Chiang said, is unlike anything “seen since the Great Depression.”

Recent figures point to a continued deterioration of the state economy. Unemployment in California soared to 11.5 percent for May, the highest level since World War II. The April unemployment figure was 11.1 percent, compared to 6.8 percent in May 2008. A more complete measure of unemployment, including those forced to work only part time, shows that more than one in five Californians is unemployed or underemployed.

California, accounted for one out of every five jobs lost last month. Out of a population of 37 million people, 2.1 million Californians are officially unemployed, 885,000 more than last month.

The state has been hit particularly hard by the collapse of housing prices, which have wreaked havoc on the real estate market, construction, and other financial related industries. With several major ports on the Pacific Ocean, California is also heavily dependent on world trade, which is falling rapidly.

California saw a decline of 33.8 percent of personal income tax receipts in May. The decline in revenue will mean a new round of austerity measures to balance the state budget, since the state collects half of its revenue from personal income taxes.

The state is under intense pressure from Wall Street to impose concessions. Moody’s Investor Service has threatened California’s general obligation debt with a “multi-notch” downgrading if the state legislature failed to produce a balanced budget before going bankrupt. The state is currently at an A2 credit rating, which are just five notches above speculative status.

A downgrade will mean that the state will face sharply higher interest rates for borrowing, if it is able to gain credit at all.

The Obama administration has responded to the economic meltdown of California by repeatedly refusing federal assistance. Instead, the administration, speaking on behalf of the most powerful sections of the financial elite, is making California an example for other states to follow as they enact austerity budgets.

By abandoning the richest and most populous state to its own devices, the Obama administration has directly contributed to the crisis now unfolding. Trillions are handed out to private banks, but when it comes to the world’s eight largest economy on the verge of bankruptcy, no money is available.

As California collapses, executives at Goldman Sachs and other banks are anticipating record bonuses, returning to business as usual. No faction of the political establishment so much as suggests that those who are responsible for the economic crisis—the wealthy corporate and financial elite—should be made to pay for it.

On the contrary, the budget crisis in California is being used a template to enact cuts to social services all across the country. The ruling class is determined to seize on the economic crisis to restructure class relations in the United States.

Obama: another mainstream Democrat

Left Business Observer, March 2008

Would you like change with that?

Super Tuesday II, as Fox dubbed it, took some steam out of the Obama bandwagon, but he’s still the likely Democratic nominee, and therefore the likely president-to-be. Which is remarkable, really-a nonparticipant can only stand slackjawed in awe of Obamamania. Previously rational people whom LBO admires, like Barbara Ehrenreich and Christopher Hayes, have fallen in love with the Senator’s brand of change we can believe in, a slogan that has to be one of the emptiest since Sandburg’s “The people, yes!,” that the New Party used in New York in the early 1990s. Obama has become the Tokio Hotel of politics.

On what is this mania based? Obama is inspiring the young, lifting the alienated off their couches, and catalyzing a new movement for…change, presumably one we can believe in. The content of this change is hard to specify. Some serious leftists we know and love point to Obama’s roots as a community organizer in Chicago, though many people in a position to know say he didn’t rock many boats in those days. He was embraced by foundation liberals, however, who greased his way into the Harvard Law School via a lakefront condo.

All of which doesn’t make Obama uniquely bad: he’s just another mainstream Democrat with a sleazy real estate guy in his past. Though he’s being touted as an early opponent of the Iraq war, he told the Chicago Tribune in 2004: “There’s not that much difference between my position and George Bush’s position….” He voted to renew the PATRIOT Act, campaigned for happy warrior Joe Lieberman against Ned Lamont in 2006, and wants to increase the size of the U.S. military. He supports Israel’s continuing torture of the Palestinians penned into the Gaza Strip. A Congressional Quarterly study found his Senate voting record was virtually indistinguishable from Hillary Clinton’s; the only major difference in their votes is a surprising one: a move to limit class actions suits against corporations, which Clinton voted against, and Obama for. Obama’s vote was against the preferences of a Dem financial base, trial lawyers, but pleasing to the Fortune 500 and Wall Street.

In this binary world, when you criticize Obama, people immediately include you’re a Hillary Clinton fan. Uh, no. Her politics are bellicose and neoliberal. Her “experience” consists largely of having watched her husband be president for eight years, though it’s likely they were sleeping in separate bedrooms for much of the time. A plague on all their houses.

Agendas

Some more thoughtful victims of Obama Disease point to detailed position papers on the candidate’s website. These must always be taken with a grain of salt, especially during primary season. Candidate Bill Clinton promised to “invest in people” and ended up being the president of “a bunch of fucking bond traders,” as Hillary’s husband memorably put it. LBJ campaigned as the peace candidate in 1964, and ended up killing a million Indochinese.

Obamians also point to his rejection of the centrist Democratic Leadership Council (DLC); they put him on their list of rising stars, and he asked to be removed. Encouraging-except for the fact that his chief economic advisor, Austan Goolsbee, the fellow who told the Canadians not to take the anti-NAFTA rhetoric seriously, is the DLC’s chief economist. Goolsbee has written gushingly about Milton Friedman and denounced the idea of a moratorium on mortgage foreclosures. That hire is more significant than asking to be struck from a list.

Big capital would have no problem with an Obama presidency. Top hedge fund honcho Paul Tudor Jones threw a fundraiser for him at his Greenwich house last spring, “The whole of Greenwich is backing Obama,” one source said of the posh headquarters of the hedge fund industry. They like him because they’re socially liberal, up to a point, and probably eager for a little less war, and think he’s the man to do their work. They’re also confident he wouldn’t undertake any renovations to the distribution of wealth. You could say the same about Clinton-but you know those hedge fund guys. They like a contrary bet. A share of Obama stock on the Iowa Electronic Market was 30 on May 19, 2007, the day of Jones’s Obama bash; it peaked at 86 on March 1, a gain of 187% (in a year where triple digits are rare). It’s since settled back into the low 70s, which is still quite a gain.

The phantasmic

LBO would be the last to argue that politics is all about rationality. Fantasy matters. But fantasy can have some relationship to policy. Take the example of Ronald Reagan, a man for whom Obama professed some admiration for having rolled back the “excesses of the 1960s and 1970s” and bringing back “a sense of dynamism and entrepreneurship that had been missing.” Reagan promised to make America “stand tall again” and “to get government off the backs of the people.” Certainly these phrases didn’t appeal to the rational faculties of the electorate, but they did correspond with a military buildup, a greater willingness to go to war, and an economic agenda of deregulation and reverence for private wealth. And Reagan had real political forces behind him-first, his cabal of right-wing Southern California businessmen, later supplemented by the corporate and financial establishment, and operating with a playbook written by movement conservatives and the Heritage Foundation.

What does Obama have? A lot of slogans that connect with nothing in the real world; in fact, their very emptiness may be the source of their appeal, because it allows people to project whatever they want to onto him, without getting bogged down in specifics, as Reagan liked to say. (Under attack from Clinton and McCain, he did get specific in his long Wisconsin victory speech. This brought attacks from Karl Rove and others, placing him on the “far left”; it’s not likely we’ll see much more of this irresponsible stuff from Obama as November approaches.) And despite the grand claims of enthusiasts, he doesn’t really have a movement behind him-he’s got a fan club. How does a fan club hold a candidate accountable? It’s not like he’ll take the phone calls of all those 27-year-olds who gave him $100 on the web as quickly as he’d answer a summons from Paul Tudor Jones.

Obama’s appeal is a strange thing. Though he’s added to it as his political momentum builds, his original base consisted of blacks and upper-status whites. The black support is out of racial pride, but the initial white support was driven by his post-partisan, post-racial appeal. Well-off whites love to hear a black man say that racism has largely receded as a toxic force, though it’s really hard to figure out what the hell he’s talking about in a world where black households earn about 60% as much as whites, and where black men are incarcerated at more than six times the rate of white men. And what of this post-partisan business? Politics is about conflicts over resources and priorities, and over the state’s power to coerce; how ever could comity prevail in a world where interests and preferences diverge so widely?

As Adolph Reed told LBO, an Obama presidency could give us the worst of all possible of worlds: one in which race is completely repackaged as a discourse of celebration and, to the extent that that had already become the only metaphor through which American politics could accommodate critical discussion of inequality, the language of ‘disparity,’ it will no longer be possible for critiques of inequality to be heard as an appropriate topic for political discussion. Obama already when he talks “black” (e.g., with his “Cousin Pookie” riffs, which are the exact equivalent of Shelby Steele’s rantings about underclass, shiftless “Sam”) opts for the Bookerite/Cosbyite metaphor of victim-blaming in the phony first-person plural, and he has always played the Immigrant Success Story Up From Slavery Ain’t America Great and Don’t I Show It angle.

And, moreover, what many of his white supporters like about him is that he doesn’t have the ‘chip on the shoulder’ that so many indigenous blacks do. Add all this to his commitment to appealing to the right and to the investor class, and the upshot is that inequality could lose whatever vestigial connotations it has as a species of injustice and be fully consolidated as the marker, on the bottom end that is, of those losers who failed to do what the market requires of them or a sign of their essential inferiority.

Turn to cheer

Enough critique; the dialectic demands something constructive to induce some forward motion. There’s no doubt that Obamalust does embody some phantasmic longing for a better world-more peaceful, egalitarian, and humane. He’ll deliver little of that-but there’s evidence of some admirable popular desires behind the crush. And they will inevitably be disappointed.

As this newsletter has argued for years, there’s great political potential in popular disillusionment with Democrats. The phenomenon was first diagnosed by Garry Wills in Nixon Agonistes. As Wills explained it, throughout the 1950s, left-liberals intellectuals thought that the national malaise was the fault of Eisenhower, and a Democrat would cure it. Well, they got JFK and everything still pretty much sucked, which is what gave rise to the rebellions of the 1960s (and all that excess that Obama wants to junk any remnant of). You could argue that the movements of the 1990s that culminated in Seattle were a minor rerun of this. The sense of malaise and alienation is probably stronger now than it was 50 years ago, and includes a lot more of the working class, whom Stanley Greenberg’s focus groups find to be really pissed off about the cost of living and the way the rich are lording it over the rest of us.

Never did the possibility of disappointment offer so much hope. That’s not what the candidate means by that word, but history can be a great ironist.