Archive for February, 2011
We are now having a major dispute about what kind of society America should be.
Right now, the flashpoint in this controversy is Wisconsin, where tens of thousands of people are demonstrating every day in an effort to block Governor Scott Walker’s plan to all but end collective bargaining rights for public employees.
But the debate is a national one. The Wisconsin showdown is only the first in a whole series of pending state conflicts. And, over the next few weeks, a corporate-friendly Republican majority in the U.S. House of Representatives may decide to shut down the federal government.
The clashes in Wisconsin and other states, and in Washington, D.C., are dressed up in the language of budget debates. But these debates have nothing to do with “fiscal responsibility.” They are about what kind of society we want.
Do we want government to provide vital services, or exacerbate inequality? Should we have strong protections for health, safety, the environment and economic stability, or should giant corporations be free to impose their rules on the rest of us? Will we protect the right of workers to join together in unions, or will we permit private and public employers to drive down wages in the interest of generating more profits or lowering taxes for corporations and the wealthy?
Corporate Plutocracy or a Working Democracy?
The people in Wisconsin who are demonstrating to stop Governor Walker’s union-busting plans are acting not just to preserve Wisconsin’s democratic traditions, but to make the case for a better America for all of us.
The people in Wisconsin–including many Public Citizen members and friends–need our solidarity. Even more, they need us to join with them in fighting for the America we all want.
As we engage this contest for the future of America, it’s important to understand how we got into our current circumstance, and exactly what is at stake.
How Did We Get Here?
The Republican line on state and federal budgetary shortfalls, echoed by too many in the media, and by too many Democrats, is that we are spending beyond our means and “mortgaging our future.” This is not true.
States are not suddenly spending more than they were two, three or four years ago. (This is true for the federal government as well, with the caveat that there was an addition of federal stimulus spending, now winding down.) The reason states are facing acute budget crises is because revenues have declined. The reason revenues have declined is because the economy crashed. And the reason the economy crashed is because an unregulated Wall Street enabled a housing bubble, and then built a financial bubble on top of the housing bubble.
In other words, Republican governors are blaming state employees for the budget crisis, when the blame actually rests with Wall Street. Making things even more obscene, while state employees are seeing salaries and benefits slashed and jobs cut, the Wall Street titans are paying themselves outrageous bonuses. Wall Street paid out more than $20 billion in bonuses last year, while Wall Street profits totaled more than $27 billion, the second highest total on record.
This central point can’t be emphasized enough: The story of the current state and federal budget challenges is the diminished tax revenue that has followed from the Wall Street-induced recession.
OK, you might say. Maybe Wall Street deserves the blame, but what choice do governments have?
Well, the states are under an obligation to balance their budgets. The simple solution for this problem is for the federal government–which does not need to balance its budget–to give them grants. Unfortunately, that solution is not forthcoming.
Still, the states have options. Notably, they can raise taxes on corporations and the wealthy, as some are now preparing to do.
Amazingly, however, those most vociferously demanding state and federal budget cutbacks in the name of fiscal rectitude also support tax cuts for those most able to pay. In Wisconsin, Governor Walker–who took office just this January–has pushed through $127 million in tax cuts. Meanwhile, in D.C., last December’s tax deal between President Barack Obama and congressional Republicans gives about $120 billion in benefits to the wealthy over the next two years.
Would it be unreasonable to ask for a rule that anyone supporting such tax breaks for the super-rich is prohibited from claiming they care about balancing budgets?
There are, of course, other ways to raise revenues. Cracking down on corporate welfare would be a good place to start. States have given away billions in corporate welfare deals, as Good Jobs First has documented. Walmart alone is grabbing $400 million a year in state and local tax breaks. At the federal level, there are tens of billions of dollars in corporate welfare giveaways that should be eliminated or reformed, involving everything from loan guarantees to nuclear power plants to export promotion schemes for big corporations.
The federal government has other ways to raise revenues that would be worth pursuing as good policy, in addition to their revenue implications. A very small tax on Wall Street trading, for example, could raise more than $100 billion a year. It would force Wall Street to offset some of the damage it has inflicted on the rest of the country. And it would slow the dangerous churning of stocks, bonds and derivatives.
The Role of Government
The Republicans’ insistence on cutting back government spending is ultimately a disguised way to advance their agenda of selectively limiting the role of government in society. (It is selective because they and their corporate backers do support an aggressive role for government when it comes to policies and activities that benefit big corporations.)
That the real issue is the role of government itself is underscored by congressional Republican budget proposals. As Congress debates a short-term government funding bill, not only are the Republicans proposing to slash vital programs, they are seeking to block, stop or undermine government restraints on Big Business–an array of rules, regulations, programs and enforcement schemes that have little or no budgetary impact, but are hugely important for protecting the public and the environment from predatory corporations.
Among many, many other troubling measures, the House Republican proposals would:
• Eliminate funding for a new consumer product safety database. Removing its funding would deprive consumers of a critical tool–three years in the planning–to report and research safety incidents on toys and other products.
• Slash the budget for the Commodity Futures Trading Commission by roughly a third. Saving only $50 million, this measure would completely hamstring the agency charged with implementing some of the most important components of the Wall Street reform law.
• Eliminate the presidential public financing system.
• Stop the Environmental Protection Agency from listing coal ash as hazardous waste, enforcing rules that would curtail mountaintop-removal coal mining, issuing new rules that would protect rivers from coal waste, or improving air quality standards.
It’s important to emphasize in this discussion that the Obama administration budget proposals, while far superior to the Republican alternative, accept many of the Republican premises–including the most important one, that the government should be reducing spending.
At a time when one in six people who would like a full-time job are unable to find one, the government should be spending more money to put people back to work, get the economy moving and prevent the waste of letting workers and plants remain idle. Instead, the Obama administration has essentially conceded the need for austerity.
Adopting the false politics of scarcity, the president needlessly proposes to shortchange vital public programs. A distressing example is his proposal to slash $3 billion from the Low Income Home Energy Assistance Program, which provides cash assistance to poor people to help them pay their utility bills.
One can go program by program, or rider by rider, and explain how misguided are proposals from both the Republicans and the administration. But even more important is to insist on what we want our government to do. We need a strong government. There are of course government programs that should be eliminated or improved. But we do need a government that is able to educate our children, ensure access to health care for all, move us to a clean energy future, keep the economy working, provide a social safety net, and protect us from corporate predations. We need a government that takes seriously its duty to advance the General Welfare.
The Role of Unions
At this point, the debate in Wisconsin is no longer about obtaining givebacks from teachers, nurses and other public employees. The public employee unions have agreed to the governor’s economic demands.
What is now in dispute is whether public employees will maintain the right to be represented by unions.
What a sad state of affairs.
The right of workers to join together into a union to bargain collectively with their employer is a basic First Amendment right and a fundamental right of workers everywhere. Unions enable workers to band together to offset the otherwise overwhelming bargaining power of employers, and make the economy and workplace a fairer and more just place.
We all benefit from a strong union movement, whether or not we are union members. Because they organize workers to act together, unions are–by far–the most important countervailing force to concentrated corporate power.
It’s not just a matter of unions supporting particular policies. By their very existence, unions change the political terrain, making it more possible to advance justice, fairness and equality.
The severe decline of unions over the past 40 years is a crucial contributing factor in explaining why inequality has risen so dramatically and why corporations have been able to increase their political influence.
The remaining union stronghold in the U.S. economy is the public sector. If Wisconsin, followed by other states, manages to undermine unionization in the public sector, it’s not just public sector workers who will be worse off. We all will be.
It is now incumbent on all of us to make Wisconsin just the beginning of something much bigger.
–Robert Weissman is president of Public Citizen (www.citizen.org).