Socialist Action /March 2001
The Bush Budget:Trillions for the Rich,
Misery for the Poor
By JEFF MACKLER
In a Feb. 27 televised budget address, President
George W. Bush announced the largest tax cut in U.S. history. Bush proposed
to grant $1.6 trillion in tax reductions over the next 10 years, the lion's
share to the top echelons of U.S. society.
Under Bush's proposal, the richest one percent
of the population would receive individual tax benefits averaging $55,000.
Working people, in contrast, would receive a few hundred dollars-and perhaps
as much as $1000 for two-income families.
Bush proposed to reduce the rate for the top tax
bracket from 39.6 percent to 33 percent. The lowest bracket, including the
working poor with incomes in the $15,000 range and lower, will be reduced
from 15 percent to 10 percent.
With the expected passage of Bush's proposals,
the rich and super-rich will pay the lowest tax rates in modern history.
In the 1950s and later, for example, the top tax rate for the rich was 90
percent while the rates for working people were virtually zero. (Of course,
the special deductions, depletion allowances, and other such exemptions
written into the tax code for the benefit of the rich often reduced their
90 percent tax rate to zero.)
But today, a steady progression of tax reductions
for the wealthy and tax increases for working people have virtually equalized
all tax rates. A working family of a steel worker or a teacher, for example,
pays taxes at the 33 percent rate while the billionaire Rockefellers paid,
until now, at the rate of 39.6.
The president's limited budget outline excludes
additional billions in corporate welfare that will be negotiated after his
administration submits a detailed budget proposal to Congress in April.
The New York Times properly noted that Bush's
outline, as well as the detailed April budget proposal, will bear little
resemblance to the final adopted budget later in the year. Rather, the $1.96
trillion Bush proposes to spend in 2002 will be the product of the usual
behind-the-scenes bipartisan negotiations wherein agreement will be reached
over how to divide up working-class taxes to serve corporate interests.
Looting Social Security
Bush's budget address projected reducing the current
national debt of $3.2 trillion to $1.2 trillion over the next 10 years.
The $2 trillion debt reduction is predicated on a claimed $5.6 trillion
surplus the government accountants project during the same period.
This so-called surplus includes $2.5 trillion generated
from the Social Security System but it excludes $2.5 trillion the same system
is expected to owe to retirees when the baby-boomer generation begins to
draw payments seven years from now.
A quirk of accounting practice excludes this debt
from the official records and therefore inflates the surplus-thus providing
a rationale for additional expenditures to meet ruling-class needs.
In truth, the $5.6 trillion "surplus"
is questionable at best. At least half, if not more, should be committed
to the Social Security system, which in previous years was inviolable. That
is, Social Security existed as an independent fund legally immune from government
use.
Bush also proposed that a portion of Social Security
funds be privatized. He noted that the Social Security fund grows at an
annual rate of only two percent. Why not invest at least a portion of Social
Security payments in the stock market, Bush proposed. This reactionary proposal
is likewise designed to channel funds to the rich at the expense of the
vast majority.
Working people today should fight for the total
independence of the Social Security system from government looting. This
can only be effectively achieved in the framework of a fight to place the
entire system under the control of working people through their own mass
organizations.
At a time when corporate power is mobilizing to
privatize the system for their own profit, the trade-union movement and
its allies among the oppressed should be mobilizing to insure that workers
control their own retirement funds and future security. Taxing the rich
(who largely avoid taxation with the help of the corporate-owned ruling-class
government) would further insure that those who have spent their lives in
the hope of a secure and adequate retirement can achieve this goal with
dignity.
The budget "surplus" is the product of
the Democratic Party-led bipartisan policies that placed ever-increasing
tax burdens on working people and slashed social programs to a greater extent
than the combined cuts instituted by the three previous Republican administrations.
Both Democrats and Republicans plan to use this "surplus" to pay
off the banking industry and other capitalist institutions that have reaped
unprecedented profits from lending the U.S. government money at rates that
are usually far higher than current interest rates.
At the same time, there is general agreement in
ruling-class circles that the tax cuts are necessary to once again prime
the pump of a failing capitalist system ever more plagued by a crisis of
overproduction and associated declining profit rates. The continuing decline
in the U.S. stock market reflects these inherent problems in the capitalist
system of production.
Despite the sound and fury generated by the now
opposition Democrats, there has always been a bipartisan consensus when
it comes to using most or all of the current Social Security surplus to
pay off capitalist banking institutions.
Former President William Clinton's top economic
policy advisor, Gene Sperling, made this clear on Feb. 27: "A remarkable
consensus emerged at the end of President Clinton's second term to use Medicare
and Social Security surpluses to completely pay off our national debt."
Sperling complained that Bush's proposal would
leave $1.2 trillion of the national debt unpaid. What is certain is that
the Republicans, like the Democrats before them, prefer to hold over the
"projected" $1.2 trillion in surplus funds for their own corporate
bailout projects to be determined as necessity dictates.
Privatizing public schools?
Much of Bush's budget speech contained the same
kind of hype that characterized the Clinton administration. Bush, for example,
claimed that the highest percentage budget increase would go to education.
But his explanation of this peculiarity was alarming.
"Schools must be given a reasonable chance
to improve and support to do so, said Bush. "If they do not, if they
continue to fail, we must give parents and students different options-a
better public school, a private school, tutoring, or a charter school."
This ominous statement portends a Bush administration
policy of opening the door to government support to private education, a
project that the ruling rich have contemplated but not seriously approached
for decades.
Bush's threat that "if" public schools
don't improve, he will contemplate government funding of private schools
is a reactionary conception that assumes that there is something inherently
wrong with public education. It assumes that massive funding of public schools,
the hiring of millions of additional well-trained teachers, the massive
reduction of class size, the rebuilding of dilapidated schools cannot dramatically
improve the quality of public education.
As with all cuts in social programs, the Bush educational
proposal is designed to funnel additional billions into the failing private
sector at the expense of working people. At the same time, Bush will dole
out insignificant sums to public education to bolster his lying conception
that our schools cannot really be improved, thereby laying the groundwork
for deep cuts in the future.
Billions more for the military
The president projected additional billions for
the military, including for research on the so-called Nuclear Missile Defense
system, which is falsely touted as a way to make the United States invulnerable
to nuclear attack. Given the tens of thousands of nuclear missiles that
exist, any notion that people in this country can be made safe from near
or total annihilation is nonsense.
But sanity is not the logic of Bush's military
proposals. Like all the others, it is but another way to pump working-class
tax monies into the private sector-in this case, the military-industrial
complex. No stone was left unturned as the president rambled through his
populist-sounding blather to justify each and every gift to his millionaire
and billionaire cohorts.
By eliminating all limits on charitable contributions,
the president said, an additional $14 billion could be expected to be granted
to the needy. Bush's clever speech writer neglected to state that this would
provide the rich an additional $14 billion in tax deductions.
There is no doubt that the Bush administration
and its Democratic Party partners will follow in Clinton's footsteps in
engineering ever deeper attacks on working people. The fact that more than
half the eligible electorate declined to vote for either ruling-class candidate
indicates the considerable disillusionment in capitalist politics today.
But the conservative pro-capitalist bureaucrats
that dominate today's labor movement remain wedded to the idea of the Democratic
Party as a lesser evil. As working people begin to take on the bosses at
the plant level and in coordinated mass demonstrations against the continuing
attacks on living standards and on our fundamental democratic rights, a
new leadership will emerge to challenge these corrupt misleaders and return
the trade unions and social movements to the road of class struggle.
The coming struggles are likely to emerge locally
at first as union and social fighters learn by daily experience to rely
on their own organizations, solidarity, and power as opposed to capitalist
politicians and their parties. With a few showdown victories under their
belts, the basis will be laid for a return to the militant and struggles
American workers pioneered in decades past.
These struggles will also lay the basis for the
construction of a genuine labor party based on a fighting union movement,
which will fight for labor's full program in the political arena and for
a workers' government.
Working people fighting through their own party
and mass organizations would indeed tax the rich with a vengeance, insuring
foremost that human needs and social progress-not corporate profits-are
central to society's priorities.
Socialist Action /March 2001 |