'Sequester': Fabricated crisis, real suffering

What does it mean for working people?

President Barack Obama and John Boehner at the White House during a Nov. 16, 2012, meeting to discuss the deficit and economy.

You can listen to an audio interview with Walter Smolarek about the sequester and its implications for working people at LiberationRadio.org, the weekly online podcast of the Party for Socialism and Liberation.

Leading Puritan minister Cotton Mather predicted that the world would end in 1697. When his prophecy failed, he reassured his devoted supporters that in fact 1716 would see the end of days—and of course their loyalty to him over the next 19 years would factor in heavily on Judgment Day. Undeterred by this second failure, Mather eased his followers’ disappointment with a further prediction that the apocalypse would come in 1736. He would not have to answer for this failing; Cotton Mather died in 1728 with his wealth and power firmly intact until the very end of his life. 

Although the financial oligarchs of today’s monopoly capitalism are a far cry from the burgeoning merchant class of Mather’s era, some things never change under class society. 

Wall Street and its loyal servants in Washington took their perpetual crisis racket to new heights on March 1 with the beginning of "sequestration"—across-the-board budget cuts to almost every area of government activity. Although it lacked a sound bite-friendly metaphor, the sequester is essentially a continuation of the debt ceiling and fiscal cliff dramas aimed at shifting the burden of the capitalist economic crisis onto the backs of poor and working people.

The March 1 sequestration deadline was the third iteration of a series of invented fiscal crises that began in April 2011. Refusing to continue the nearly century-old tradition of periodically increasing the cap on the amount of money the government can borrow, the Republican majority in the House of Representatives refused to raise the “debt ceiling” unless massive cuts were made to vital programs poor and working people rely on.

The Democrats agreed with the general premise that social spending was “out of control” but called for "a more balanced approach," adding a small tax increase for the very wealthy as well as a rollback of a previous cut in the payroll tax that would result in a sizable tax increase for all U.S. workers—presumably allowing for less draconian cuts to social programs.

The two partners could not hammer out the details in a timely manner. Instead, they extended their deadline to the end of 2012—creating the infamous “fiscal cliff”—so they could focus on the upcoming election season. If they did not reach an agreement by the end of the year, a series of “sequestered” cuts to everything from low-income heating assistance to the Head Start program would take effect that could amount to a staggering $1.2 trillion over 10 years. Workers were guaranteed to lose, but the thinking was that the impact of these cuts would be so severe—even slowing growth of spending for their beloved Pentagon!—that members of Congress would be compelled to come up with a conclusive settlement. 

Because of the period of transition from the old Congress to the new one following the 2012 elections, during which the negotiations took place, and the unexpectedly severe weakness of the economic recovery, the politicians could only arrive at half a “grand bargain”—raising taxes a small amount for the very wealthy, while preserving loopholes, but fully restoring the payroll tax for all workers. The sequester involving government spending was postponed for two months, bringing us to the now-expired March 1 deadline. 

In the run-up to this supposed point of no return, corporate media commentators generally limited their criticism of Congress to the “uncertainty” caused by the lack of a final deal on the budget and debt. In fact, there is a great deal of certainty that the working class will suffer while the rich get richer; absent a mass movement against austerity, it is simply a question of details. Wall Street appears to agree, judging from the near record levels reached by the stock market as March 1 approached.

The effects

The sequester has officially begun to take effect, but some cuts will not be felt right away. Still, the immediate suffering the capitalist politicians are inflicting on poor and working people is substantial. The sequester calls for $85 billion of cuts this year alone, which were announced by the White House’s Office of Budget and Management on March 1. 

The Low-Income Home Energy Assistance Program, which provides families with desperately needed help paying their heating bills, was cut by $185 million. A Department of Education program that provides resources to underfunded schools, called the Impact Aid program, is losing $60 million. About 70,000 children will be kicked out of Head Start, and 30,000 will no longer have their daycare subsidized.

Because of cuts to the National Oceanic and Atmospheric Administration, several key dates in the fishing season may be pushed back, which would devastate workers in that industry. Small farmers have lost access to over $5 million in loans. 

The sequester targets women for especially severe austerity. Some 300,000 people will lose their benefits from the Women, Infants and Children program, which provides food and other assistance to some of the most oppressed women and their children. Around 25,000 low-income women will not receive breast or cervical cancer screenings as a result of cuts to the Center for Disease Control. The government’s already-pathetic attempts to enforce laws against violence against women lost $20 million of funding. 

Public health and safety is badly affected. The ability of the Department of Agriculture to carry out inspections of meat and other food will be undermined, and the Federal Aviation Administration will find itself badly understaffed.  

If the politicians do not reach a deal by the end of March, the employment situation will further worsen as hundreds of thousands of federal employees face the prospect of being furloughed—forced to take unpaid days off work. Fifty-seven percent of public-sector workers are women. Unemployment checks will now be 11 percent smaller. 

Unsurprisingly, the corporate media have not been emphasizing the aspects of the sequester that would devastate working-class communities. Instead, they have focused on the impact of cuts on some of the most brutal mechanisms of the capitalist state. While social programs only merit a passing mention, pundits for the big-business media react with hysteria to the idea that the military or border agents will receive less taxpayer money. 

These programs should not only absorb the entirety of the spending cuts, but the Pentagon, Border Patrol and all other instruments of repression and aggression against other countries should be completely dismantled.

Democrats also to blame

On the day the sequester began, President Obama stated that a deal on the budget and debt was not reached “because of a choice that Republicans in Congress have made." He added: "They've allowed these cuts to happen because they refuse to budge on closing a single wasteful loophole to help reduce the deficit.” As a part of this cynical posturing as defender of poor and working people, the administration refused to hold formal talks with Republican leaders over the last two months. However, no amount of shameless political maneuvering can change the fact that the sequester was the Democrats’ idea and that they are fundamentally a soft-cop partner with the hard-cop Republicans rather than their adversary.

Gene Sperling, the director of the President’s National Economic Council and former Goldman Sachs advisor, is credited with first proposing the idea of sequestered spending cuts during the 2011 debt ceiling hysteria. According to prominent journalist Bob Woodward, this proposal was taken from the White House to Senate Majority Leader Harry Reid at 2:30 p.m. on July 27, 2011, by then-budget director and now Secretary of the Treasury Jack Lew along with Rob Nabors, a senior aide to the administration. The majority of Democrats in Congress voted in favor of the “Budget Control Act” that resulted from these negotiations. 

The foundation for the debt ceiling, fiscal cliff and sequester was laid by a "bi-partisan" panel handpicked by President Obama himself in 2010. Called the Simpson-Bowles Commission, this team of politicians proposed massive attacks on Social Security, Medicare, Medicaid and other vital programs. Because the commission was widely seen as “above the fray,” its report has been a reference point for both Democrats and Republicans for the entirety of the austerity debate. 

The dominant media narrative has been one of intractable deadlock between the two main capitalist parties on the basis of fundamental ideological differences. This is plainly false. However, it is equally clear that significant sections of the capitalist class, especially those associated with the military-industrial complex, were pushing for an agreement with more precise cuts that would not be detrimental to their profits. 

That this did not happen seems to indicate that real divisions within the ruling class are emerging. This is a result of and a testament to the profound nature of the crisis of global capitalism generally and U.S. imperialism specifically. 

Direct talks between Democratic and Republican leaders are poised to resume in earnest in the coming days. In addition to the issue of the sequester, the government will once again hit its “debt ceiling” near the end of the month. This is the period when the main targets of Wall Street’s austerity drive will once again take center stage—Social Security, Medicare and Medicaid. While these programs that are critically important to the survival of poor and working people were not included in the $85 billion of initial sequestered cuts, rolling back these so-called entitlements remains a top priority for the capitalist class. 

This was confirmed by media reports that President Obama in calls with lawmakers from both parties on March 2 signaled once again that he was ready to "explore a compromise" that would include "reforming"—that is, cutting—these vital programs.

The working class does not and cannot have a voice in this government. We do, however, collectively have the power of our numerical strength and labor power. The impending disaster facing the oppressed and exploited can only be averted through a militant, uncompromising counterattack in our communities, workplaces, schools and every other arena of struggle. 

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