Tim wheeler & Fred Gaboury - Clinton/GOP budget blasted by AFL-CIO & community groups

by Tim wheeler & Fred Gaboury

This article was reprinted from the May 15, 1997 issue of the People's Weekly World. For subscription information see below. All rights reserved - may be used with PWW credits.

WASHINGTON - It's a bonanza for the rich that balances the federal budget on the backs of working people and the poor. That was the reaction of the AFL-CIO and anti-poverty groups to the bipartisan deal to balance the federal budget by the year 2002 announced May 2 by President Clinton and Senate Majority Leader Trent Lott (R-Miss.)

The New York Stock Exchange soared to new heights with news of the deal's sharp cut in the capital gains and estate taxes coupled with deep new cuts in funding for human needs programs. The AFL-CIO Executive Council meeting here approved a statement that the agreement "rewards upper- income taxpayers at a time when they need it least ... locking in capital gains and estate tax reductions that benefit only the wealthiest 1 percent of taxpayers."

The statement points out that the increased productivity of U.S. workers made it possible to project a balanced budget, "yet tax cuts for those who benefited most from the boom ... took priority over the needs of working families. The administration and Republican congressional leaders chose to cut programs working families will depend upon most over the next decade - Medicare, Medicaid, education, public safety and the environment."

Linda Chavez Thompson, executive vice president of the AFL- CIO, told the World she is concerned about cuts in programs that benefit working women. Andrew Stern, president of the Service Employees International Union, said, "There are lots better ways to spend working families' money than reducing the capital gains and inheritance taxes."

Debbie Weinstein, a spokesperson for the Children's Defense Fund, said the deal would terminate Supplemental Security Income (SSI) benefits for 135,000 disabled children because of tightened eligibility regulations. "That's a very high number to start with," she said."And over a six-year period 180,000 children will lose their benefits."

Coordinadora 96 which organized a Washington demonstration for immigrant rights last October, set up picketlines at federal buildings in nine cities May 7 to protest the Clinton-GOP deal. "They cut SSI benefits for legal immigrants by $23.7 billion and restored $9.9 billion," said Miguel Maldonado, leader of the Immigrant Workers Association which organized the New York City picketline. "We are demanding restoration of the full $23.7 billion."

The vast majority of immigrants are hardworking taxpayers, he said, yet immigrants - 10 percent of all those on welfare rolls - will absorb 44 percent of the benefit cuts.

He urged enactment of HR-1015, a bill by Rep. Luis Gutierrez (D-Illinois), that would fully restore benefits for legal immigrants. Senator Paul Wellstone (D-Minn.) has introduced the bill in the Senate.

The Republicans are celebrating the deal's $250 billion in reduced capital gains and estate taxes over the next ten years. To pay for it and balance the budget at the same time, the agreement would cut $58 billion in domestic spending. Medicare premiums would be increased and Social Security cost-of-living adjustments would be reduced. Medicare spending would be slashed $115 billion and Medicaid would be cut $17 billion, mostly through reduced payments to hospitals that serve indigent patients.

Chris Hellman, at the Center for Defense Information, said, "They are operating in the context of a $250 billion, inflation-adjusted, annual military budget for years into the future. There is no peace dividend in this deal. We are extremely disappointed that an opportunity has been missed."

Twenty-four hours before the deal was announced, Clinton faced an open revolt by some Democratic lawmakers for negotiating with the GOP leaders behind closed doors. Clinton announced what the New York Times called "an astounding piece of news." The federal deficits were likely to be $225 billion lower than the Republicans had been predicting.

Clinton used the $225 billion windfall to mollify the critics, shelving, for example, a plan to legislate a 1 percent downward revision in the consumer price index that would have slashed Social Security benefits and wages by tens of billions. Clinton also announced $34 billion in new funding for education and health insurance for half the 10 million children not now protected--a pitifully small package.

Patrick Burns, spokesperson for the National Council of Senior Citizens, said, "Where has this $225 billion been hiding this past three years? All along, they have been cooking the numbers to produce the deficit forecasts. They used the worst-case scenarios to prove Social Security and Medicare are going broke." Then when Clinton and the GOP needed a positive deficit forecast the Congressional Budget Office delivered it in 24 hours, he said.

Weinstein said, "Certainly we are pleased that half the children would receive health insurance protection. But that leaves the other half. SSI benefits would be restored for two-thirds of legal immigrants. That leaves one-third. And none of these people will be eligible for foodstamps."

A budget that creates jobs paying people to do what needs to be done to rebuild the country "is a good investment," she added. "The tax breaks enrich those who are already well-off, not those who are poor, the disabled, children."

Republican leaders announced that they hope to complete the draft of a budget resolution before the July 4th recess. AFL-CIO President John Sweeney told a news conference the labor movement will fight for pro-people budget priorities as hard as their successful fight for an increase in the minimum wage.

The CPUSA views the budget

Wall Street, whose record-breaking profits are now at an all-time high, did not elect President Clinton. In fact, they put their finances heavily behind Dole and Gingrich.

This makes the so-called compromise budget between Clinton and the right-wing Republicans all the more shameful. No amount of rhetorical tap dancing by Clinton can hide the fact that his actions will put billions into the pockets of the super-rich while placing at risk Medicaid and Medicare, Social Security, welfare and all the entitlements that millions of working and retired people depend on.

It's time to face reality. The economy is not in good shape. Millions of Americans are in jeopardy. Yes, the rich are getting obscenely rich, but at what cost: more than 20 million unemployed or underemployed working poor who make less than $7.50 an hour.

The real income of 80 percent of American families has been declining for 20 years. Today, 50 million Americans have fallen below the poverty line. Thirty million Americans, including five million elderly, cannot afford adequate food. One in every five children, and one in three African American and Latino children, go to bed hungry every night. 100,000 U.S. children are homeless. More Americans are in prison than at any time in history. Can this be called a "good" economy. We think not.

We call for the restoration of all federal entitlements. The taxes paid by the rich need to be dramatically increased. The Pentagon budget needs to be cut by 50 percent to begin with and, with that additional income, the government needs to launch an emergency effort to create public works jobs to rebuild the cities and rural areas - just what the Martinez bill (HR-950) calls for.

Taxing the rich and cutting the military budget will create enough revenue to guarantee Social Security and Medicare and more money for education and health care. The budget we need is one that will make the Pentagon, the rich and super-rich tighten their belts for a change.

- Communist Party USA