Posts Tagged 'children'

Clinton’s savage program of Welfare Reform, effects on women and children

Sunday’s New York Times has a significant article on women’s’ and children’s poverty, and Welfare Reform of the 1990s.  It’s reprinted below, and is available at http://tinyurl.com/cubfjcn .

The next time you hear liberal Democrats prattle about the good old days under Clinton, with his budget surpluses, remember his 1996 Welfare Reform, the savage program that stole billions from welfare recipients and gave the money to the rich, who invested it in the stock market,  driving up stocks and giving us our vaunted “prosperity”.  Extreme poverty has doubled since Welfare Reform, and poverty and near-poverty have jumped hugely, but Obama and Pelosi say nothing about this, only talking about the “middle class.”  Clearly Democrats are as devoted to corporate profits and enriching the rich as Republicans.

Here’s the facts of the New York Times article in a nutshell

This is the fallout from the 1996 Welfare Reform, which was

  • promoted by Clinton as “ending welfare as we know it,” and
  • supported by Obama in his 2008 campaign, when he bragged about his role cutting welfare rolls as an Illinois legislator.

Welfare Reform replaced AFDC (Aid to Dependent Children) which

  • dated from New Deal,
  • gave states unlimited matching funds
  • with no time limits and little requirements for recipients
  • with TANF (Temporary Assistance for Needy Families), which
    • imposed time limits on how long you could receive welfare, (usually 5 years)
    • imposed work requirements on recipients,
    • capped payments.
    • Gave states fixed federal payments, which encouraged states to withhold aid. Since then:
      • 32 states have reduced rolls by at least 66%
      • Welfare rolls are now down 68% from the 1990s peak

Those dropped or turned away were mostly single moms and their kids. Now

  • 25% of low-income single moms are without jobs or welfare;
    This is 4 million women and children, twice the rate under AFDC.
    Over 40% of them are jobless and without assistance for over one year.
  • Since 1996, the share of households with kids living on a average of $2 per person per day has almost doubled, to almost 4%.
  • Only 20% of poor children get welfare money, lowest level in 50 years.
  • 10%  of households headed by women are in “deep poverty” (under $4,500 for family of three)

Since start of 2007 recession:

  • Welfare roles have risen only 15% during the worst unemployment since 1930s
  • 16 states have cut welfare rolls
  • 11 states cut welfare rolls by 10% or more, including states with highest unemployment
  • Benefits are cut to a national average of $350/mo for family of three
  • Arizona alone
    •  Cut welfare rolls by 50%, is using federal welfare money to plug state deficits
    • Shortened time limit from five to two years
    • Cut benefits 20%

For more information on the growth of poverty and its effects on women and children read

Center on Budget and Policy Priorities: “Poverty Rate Second-Highest in 45 years” Sept 14, 2011

Available at http://tinyurl.com/3ct69xs

World Socialist Web Site: “Extreme poverty in US has more than doubled since 1996” Feb 25, 2012

Available at http://tinyurl.com/82t6wyk

World Socialist Web Site: “(California Budget Project) Study shows harmful impact of economic crisis on California’s women.”  Available at http://tinyurl.com/7jxdoah

++++++++++++++++++++++++++++++++++++++++++++++++++++++

The article:

New York Times, Sunday, April 08, 2012

Welfare Limits Left Poor Adrift as Recession Hit

Welfare Limits Left Poor Adrift as Recession Hit

By JASON DePARLE

PHOENIX — Perhaps no law in the past generation has drawn more praise than the drive to “end welfare as we know it,” which joined the late-’90s economic boom to send caseloads plunging, employment rates rising and officials of both parties hailing the virtues of tough love.

But the distress of the last four years has added a cautionary postscript: much as overlooked critics of the restrictions once warned, a program that built its reputation when times were good offered little help when jobs disappeared. Despite the worst economy in decades, the cash welfare rolls have barely budged.

Faced with flat federal financing and rising need, Arizona is one of 16 states that have cut their welfare caseloads further since the start of the recession — in its case, by half. Even as it turned away the needy, Arizona spent most of its federal welfare dollars on other programs, using permissive rules to plug state budget gaps.

The poor people who were dropped from cash assistance here, mostly single mothers, talk with surprising openness about the desperate, and sometimes illegal, ways they make ends meet. They have sold food stamps, sold blood, skipped meals, shoplifted, doubled up with friends, scavenged trash bins for bottles and cans and returned to relationships with violent partners — all with children in tow.

Esmeralda Murillo, a 21-year-old mother of two, lost her welfare check, landed in a shelter and then returned to a boyfriend whose violent temper had driven her away. “You don’t know who to turn to,” she said.

Maria Thomas, 29, with four daughters, helps friends sell piles of brand-name clothes, taking pains not to ask if they are stolen. “I don’t know where they come from,” she said. “I’m just helping get rid of them.”

To keep her lights on, Rosa Pena, 24, sold the groceries she bought with food stamps and then kept her children fed with school lunches and help from neighbors. Her post-welfare credo is widely shared: “I’ll do what I have to do.”

Critics of the stringent system say stories like these vindicate warnings they made in 1996 when President Bill Clinton fulfilled his pledge to “end welfare as we know it”: the revamped law encourages states to withhold aid, especially when the economy turns bad.

The old program, Aid to Families with Dependent Children, dates from the New Deal; it gave states unlimited matching funds and offered poor families extensive rights, with few requirements and no time limits. The new program, Temporary Assistance for Needy Families, created time limits and work rules, capped federal spending and allowed states to turn poor families away.

“My take on it was the states would push people off and not let them back on, and that’s just what they did,” said Peter B. Edelman, a law professor at Georgetown University who resigned from the Clinton administration to protest the law. “It’s been even worse than I thought it would be.”

But supporters of the current system often say lower caseloads are evidence of decreased dependency. Many leading Republicans are pushing for similar changes to much larger programs, like Medicaid and food stamps.

Representative Paul D. Ryan of Wisconsin, the top House Republican on budget issues, calls the current welfare program “an unprecedented success.” Mitt Romney, who leads the race for the Republican presidential nomination, has said he would place similar restrictions on “all these federal programs.” One of his rivals, Rick Santorum, calls the welfare law a source of spiritual rejuvenation.

“It didn’t just cut the rolls, but it saved lives,” Mr. Santorum said, giving the poor “something dependency doesn’t give: hope.”

President Obama spoke favorably of the program in his 2008 campaign — promoting his role as a state legislator in cutting the Illinois welfare rolls. But he has said little about it as president.

Even in the 1996 program’s early days, when jobs were plentiful, a subset of families appeared disconnected — left with neither welfare nor work. Their numbers were growing before the recession and seem to have surged since then.

No Money, No Job

While data on the very poor is limited and subject to challenge, recent studies have found that as many as one in every four low-income single mothers is jobless and without cash aid — roughly four million women and children. Many of the mothers have problems like addiction or depression, which can make assisting them politically unpopular, and they have received little attention in a downturn that has produced an outpouring of concern for the middle class.

Poor families can turn to other programs, like food stamps or Medicaid, or rely on family and charity. But the absence of a steady source of cash, however modest, can bring new instability to troubled lives.

One prominent supporter of the tough welfare law is worried that it may have increased destitution among the most disadvantaged families. “This is the biggest problem with welfare reform, and we ought to be paying attention to it,” said Ron Haskins of the Brookings Institution, who helped draft the 1996 law as an aide to House Republicans and argues that it has worked well for most recipients.

“The issue here is, can you create a strong work program, as we did, without creating a big problem at the bottom?” Mr. Haskins said. “And we have what appears to be a big problem at the bottom.”

He added, “This is what really bothers me: the people who supported welfare reform, they’re ignoring the problem.”

The welfare program was born amid apocalyptic warnings and was instantly proclaimed a success, at times with a measure of “I told you so” glee from its supporters. Liberal critics had warned that its mix of time limits and work rules would create mass destitution — “children sleeping on the grates,” in the words of Senator Daniel Patrick Moynihan, a New York Democrat who died in 2003.

But the economy boomed, employment soared, poverty fell and caseloads plunged. Thirty-two states reduced their caseloads by two-thirds or more, as officials issued press releases and jostled for bragging rights. The tough law played a large role, but so did expansions of child care and tax credits that raised take-home pay.

In a twist on poverty politics, poor single mothers, previously chided as “welfare queens,” were celebrated as working-class heroes, with their stories of leaving the welfare rolls cast as uplifting tales of pluck. Flush with federal money, states experimented with programs that offered counseling, clothes and used cars.

But if the rise in employment was larger than predicted, it was also less transformative than it may have seemed. Researchers found that most families that escaped poverty remained “near poor.”

And despite widespread hopes that working mothers might serve as role models, studies found few social or educational benefits for their children. (They measured things like children’s aspirations, self-esteem, grades, drug use and arrests.) Nonmarital births continued to rise.

But the image of success formed early and stayed frozen in time.

“The debate is over,” President Clinton said a year after signing the law, which he often cites in casting himself as a centrist. “Welfare reform works.”

The recession that began in 2007 posed a new test to that claim. Even with $5 billion in new federal funds, caseloads rose just 15 percent from the lowest level in two generations. Compared with the 1990s peak, the national welfare rolls are still down by 68 percent. Just one in five poor children now receives cash aid, the lowest level in nearly 50 years.

As the downturn wreaked havoc on budgets, some states took new steps to keep the needy away. They shortened time limits, tightened eligibility rules and reduced benefits (to an average of about $350 a month for a family of three).

Since 2007, 11 states have cut the rolls by 10 percent or more. They include centers of unemployment like Georgia, Indiana and Rhode Island, as well as Michigan, where the welfare director justified cuts by telling legislators, “We have a fair number of people gaming the system.” Arizona cut benefits by 20 percent and shortened time limits twice — to two years, from five.

Many people already found the underlying system more hassle than help, a gantlet of job-search classes where absences can be punished by a complete loss of aid. Some states explicitly pursue a policy of deterrence to make sure people use the program only as a last resort.

Since the states get fixed federal grants, any caseload growth comes at their own expense. By contrast, the federal government pays the entire food stamp bill no matter how many people enroll; states encourage applications, and the rolls have reached record highs.

Among the Arizonans who lost their checks was Tamika Shelby, who first sought cash aid at 29 after fast-food jobs and a stint as a waitress in a Phoenix strip club. The state gave her $176 a month and sent her to work part time at a food bank. Though she was effectively working for $2 an hour, she scarcely missed a day in more than a year.

“I loved it,” she said.

Her supervisor, Michael Cox, said Ms. Shelby “was just wonderful” and “would even come up here on her days off.”

Then the reduced time limit left Ms. Shelby with neither welfare nor work. She still gets about $250 a month in food stamps for herself and her 3-year-old son, Dejon. She counts herself fortunate, she said, because a male friend lets her stay in a spare room, with no expectations of sex. Still, after feeding her roommate and her child, she said, “there are plenty of days I don’t eat.”

“I know there are some people who abuse the system,” Ms. Shelby said. “But I was willing to do anything they asked me to. If I could, I’d still be working for those two dollars an hour.”

Diverting Federal Funds

Clarence H. Carter, Arizona’s director of economic security, says finances forced officials to cut the rolls. But the state gets the same base funding from the federal government, $200 million, that it received in the mid-1990s when caseloads were five times as high. (The law also requires it to spend $86 million in state funds.)

Arizona spends most of the federal money on other human services programs, especially foster care and adoption services, while using just one-third for cash benefits and work programs — the core purposes of Temporary Assistance for Needy Families. If it did not use the federal welfare money, the state would have to finance more of those programs itself.

“Yes, we divert — divert’s a bad word,” said State Representative John Kavanagh, a Republican and chairman of the Arizona House Appropriations Committee. “It helps the state.”

While federal law allows such flexibility, critics say states neglect poor families to patch their own finances. Nationally, only 30 percent of the welfare money is spent on cash benefits.

“It’s not that the other stuff isn’t important, but it’s not what T.A.N.F.” — the Temporary Assistance program — “was intended for,” said LaDonna Pavetti of the Center on Budget and Policy Priorities, a Washington research and advocacy group. “The states use the money to fill budget holes.”

Even in an economy as bad as Arizona’s, some recipients find work. Estefana Armas, a 30-year-old mother of three, spent nine years on the rolls, fighting depression so severe that it left her hospitalized. Once exempt from time limits because of her mental health, Ms. Armas joined support groups, earned a high school equivalency degree and enrolled in community college.

Just as her time expired last summer, Ms. Armas found work as a teacher’s aide at a church preschool.

“It kind of pushed me to get a job,” she said.

Supporters of Temporary Assistance cite stories like that to argue that it promotes a work ethic. Despite high unemployment, low-skilled single mothers work as much now, on average, as they did under the old welfare law — and by some measures, a bit more. As a group, their poverty rates are still lower. And those without cash aid, they say, can turn to other programs.

“We have reduced our caseload, and we don’t have people dying in the street,” Mr. Kavanagh said. “There were an awful lot of people who didn’t need it.”

But the number of very poor families appears to be growing. Pamela Loprest and Austin Nichols, researchers at the Urban Institute, found that one in four low-income single mothers nationwide — about 1.5 million — are jobless and without cash aid. That is twice the rate the researchers found under the old welfare law. More than 40 percent remain that way for more than a year, and many have mental or physical disabilities, sick children or problems with domestic violence.

Using a different definition of distress, Luke Shaefer of the University of Michigan and Kathryn Edin of Harvard examined the share of households with children in a given month living on less than $2 per person per day. It has nearly doubled since 1996, to almost 4 percent. Even when counting food stamps as cash, they found one of every 50 children live in such a household.

The Census Bureau uses a third measure, “deep poverty,” which it defines as living on less than half of the amount needed to escape poverty (for a family of three, that means living on less than $9,000 a year). About 10 percent of households headed by women report incomes that low, a bit less than the peak under the old law but still the highest level in 18 years.

Some researchers say the studies exaggerate poverty by inadequately accounting for undisclosed income, like help from boyfriends or under-the-table jobs. They note that asking poor people about their consumption, rather than their income, suggests that even the poorest single mothers have improved their standard of living since 1996.

Mr. Haskins, the Temporary Assistance program’s architect, agrees that poverty at the bottom “is not as bad as it seems,” but adds, “It’s still pretty darn bad.”

Trying to Make Do

Asked how they survived without cash aid, virtually all of the women interviewed here said they had sold food stamps, getting 50 cents for every dollar of groceries they let others buy with their benefit cards. Many turned to food banks and churches. Nationally, roughly a quarter have subsidized housing, with rents as low as $50 a month.

Several women said the loss of aid had left them more dependent on troubled boyfriends. One woman said she sold her child’s Social Security number so a relative could collect a tax credit worth $3,000.

“I tried to sell blood, but they told me I was anemic,” she said.

Several women acknowledged that they had resorted to shoplifting, including one who took orders for brand-name clothes and sold them for half-price. Asked how she got cash, one woman said flatly, “We rob wetbacks” — illegal immigrants, who tend to carry cash and avoid the police. At least nine times, she said, she has flirted with men and led them toward her home, where accomplices robbed them.

“I felt bad afterwards,” she said. But she added, “There were times when we didn’t have nothing to eat.”

One family ruled out crime and rummaged through trash cans instead. The mother, an illegal immigrant from Mexico, could not get aid for herself but received $164 a month for her four American-born children until their time limit expired. Distraught at losing her only steady source of cash, she asked the children if they would be ashamed to help her collect discarded cans.

“I told her I would be embarrassed to steal from someone — not to pick up cans,” her teenage daughter said.

Weekly park patrols ensued, and recycling money replaced about half of the welfare check.

Despite having a father in prison and a mother who could be deported, the children exude earnest cheer. A daughter in the fifth grade won a contest at school for reading the most books. A son in the eighth grade is a student leader praised by his principal for tutoring younger students, using supplies he pays for himself.

“That’s just the kind of character he has,” the principal said.

After losing cash aid, the mother found a cleaning job but lost it when her boss discovered that she was in the United States illegally. The family still gets subsidized housing and $650 a month in food stamps.

The boy worries about homelessness, but his younger sisters, 9 and 10, see an upside in scavenging.

“It’s kind of fun because you get to look through the trash,” one of the girls said.

“And you get to play in the park a little while before you go home,” her sister agreed.

Shortlink to this posting:  http://wp.me/p3xLR-sM

Toxic legacy of US assault on Fallujah ‘worse than Hiroshima’

Independent UK, July 24, 2010

Toxic legacy of US assault on Fallujah ‘worse than Hiroshima’

By Patrick Cockburn

Birth defects in Fallujah

Children in Fallujah who suffer from birth defects which are thought to be linked to weapons used in attacks on the city by US Marines.

Dramatic increases in infant mortality, cancer and leukaemia in the Iraqi city of Fallujah, which was bombarded by US Marines in 2004, exceed those reported by survivors of the atomic bombs that were dropped on Hiroshima and Nagasaki in 1945, according to a new study.

Iraqi doctors in Fallujah have complained since 2005 of being overwhelmed by the number of babies with serious birth defects, ranging from a girl born with two heads to paralysis of the lower limbs. They said they were also seeing far more cancers than they did before the battle for Fallujah between US troops and insurgents.

Their claims have been supported by a survey showing a four-fold increase in all cancers and a 12-fold increase in childhood cancer in under-14s. Infant mortality in the city is more than four times higher than in neighbouring Jordan and eight times higher than in Kuwait.

Dr Chris Busby, a visiting professor at the University of Ulster and one of the authors of the survey of 4,800 individuals in Fallujah, said it is difficult to pin down the exact cause of the cancers and birth defects. He added that “to produce an effect like this, some very major mutagenic exposure must have occurred in 2004 when the attacks happened”.

US Marines first besieged and bombarded Fallujah, 30 miles west of Baghdad, in April 2004 after four employees of the American security company Blackwater were killed and their bodies burned. After an eight-month stand-off, the Marines stormed the city in November using artillery and aerial bombing against rebel positions. US forces later admitted that they had employed white phosphorus as well as other munitions.

In the assault US commanders largely treated Fallujah as a free-fire zone to try to reduce casualties among their own troops. British officers were appalled by the lack of concern for civilian casualties. “During preparatory operations in the November 2004 Fallujah clearance operation, on one night over 40 155mm artillery rounds were fired into a small sector of the city,” recalled Brigadier Nigel Aylwin-Foster, a British commander serving with the American forces in Baghdad.

He added that the US commander who ordered this devastating use of firepower did not consider it significant enough to mention it in his daily report to the US general in command. Dr Busby says that while he cannot identify the type of armaments used by the Marines, the extent of genetic damage suffered by inhabitants suggests the use of uranium in some form. He said: “My guess is that they used a new weapon against buildings to break through walls and kill those inside.”

The survey was carried out by a team of 11 researchers in January and February this year who visited 711 houses in Fallujah. A questionnaire was filled in by householders giving details of cancers, birth outcomes and infant mortality. Hitherto the Iraqi government has been loath to respond to complaints from civilians about damage to their health during military operations.

Researchers were initially regarded with some suspicion by locals, particularly after a Baghdad television station broadcast a report saying a survey was being carried out by terrorists and anybody conducting it or answering questions would be arrested. Those organising the survey subsequently arranged to be accompanied by a person of standing in the community to allay suspicions.

The study, entitled “Cancer, Infant Mortality and Birth Sex-Ratio in Fallujah, Iraq 2005-2009”, is by Dr Busby, Malak Hamdan and Entesar Ariabi, and concludes that anecdotal evidence of a sharp rise in cancer and congenital birth defects is correct. Infant mortality was found to be 80 per 1,000 births compared to 19 in Egypt, 17 in Jordan and 9.7 in Kuwait. The report says that the types of cancer are “similar to that in the Hiroshima survivors who were exposed to ionising radiation from the bomb and uranium in the fallout”.

Researchers found a 38-fold increase in leukaemia, a ten-fold increase in female breast cancer and significant increases in lymphoma and brain tumours in adults. At Hiroshima survivors showed a 17-fold increase in leukaemia, but in Fallujah Dr Busby says what is striking is not only the greater prevalence of cancer but the speed with which it was affecting people.

Of particular significance was the finding that the sex ratio between newborn boys and girls had changed. In a normal population this is 1,050 boys born to 1,000 girls, but for those born from 2005 there was an 18 per cent drop in male births, so the ratio was 850 males to 1,000 females. The sex-ratio is an indicator of genetic damage that affects boys more than girls. A similar change in the sex-ratio was discovered after Hiroshima.

The US cut back on its use of firepower in Iraq from 2007 because of the anger it provoked among civilians. But at the same time there has been a decline in healthcare and sanitary conditions in Iraq since 2003. The impact of war on civilians was more severe in Fallujah than anywhere else in Iraq because the city continued to be blockaded and cut off from the rest of the country long after 2004. War damage was only slowly repaired and people from the city were frightened to go to hospitals in Baghdad because of military checkpoints on the road into the capital.

shortlink to this posting:   http://wp.me/p3xLR-pp

Schwarzenegger and the budget crisis: it’s easy to target those least able to fight

Los Angeles Times, August 1, 2009

Schwarzenegger and the budget crisis: easy to be hard

Funny, isn’t it, that when the governor scours the state budget for waste, fraud and abuse, he only seems to find it in programs for the old, the young, the poor and others unable to raise campaign funds or muster political opposition.

Like those seniors and disabled people in the state’s In-Home Supportive Services program. IHSS allows them to stay out of nursing homes or other facilities far more expensive for them, their families and ultimately the state and its taxpayers. Clients don’t get direct state payments, just basic care such as meals and changes of clothes and linens. But beware; there could be hundreds of seniors scurrying from county to county under assumed names, trying to rack up as many sponge baths as possible. So California will now crack down by fingerprinting them.

Or those CalWorks recipients, who probably just signed up for welfare to get job training. Well, there are no jobs out there right now, so they must be abusing the system. We showed them — by cutting funding for job training. And then there are the people raking in all that subsidized Medi-Cal and Healthy Families care. They just want to get the state to pay for cheap preventive care so it doesn’t have to pay for expensive emergency care. Nice try. We’ll cull recipients by centralizing the eligibility process, because everyone knows it’s better to run government from Sacramento rather than closer to home.

California had to cut. But there’s a double irony at work. First, the point of the social safety net is to be there when it’s most needed — to ensure that during times of widespread unemployment and financial distress, the people on the edge can avoid falling into an abyss; that’s vital to them, of course, but good for the rest of us too, because it costs more to retrieve the fallen than to keep them out of the abyss in the first place. And second, after they are cut, human service programs get branded as wasteful and fraudulent and get cut again, because they don’t have a California Teachers Assn. or a California Chamber of Commerce standing up for them.

Certainly there are instances of waste and fraud in government. Fingerprinting IHSS providers, who are paid with taxpayer funds, makes some sense. But fingerprinting the home-bound clients? If that’s not an example of new wasteful government spending, it’s hard to know what is.

Meanwhile, instead of cracking down on tax fraud, California is furloughing its tax workers, who will have less time and fewer resources to collect taxes owed. It’s retaining redundant Cabinet offices, which oversee fully staffed state agencies. And in the name of erasing waste, fraud and abuse, it’s leading a devastating march through the path of least political resistance.

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.


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