Obama, the debt, and “shared sacrifice”

“Shared sacrifice” has become a key talking point among many top politicians opposing the Republican Party’s defense of the super-rich and refusal to allow the Bush tax cuts to expire.

The idea is the national interest demands that everyone has a stake in contributing to resolving the debt crisis. If workers are expected to contribute, then the wealthy too should pay their fair share. Sounds reasonable, right?

Except that there is not a speck of fairness in asking the working class and poor to “share” in paying for a crisis created in the first place by capitalist greed.

Recall that the Great Recession itself was brought on by speculation in sub-prime mortgages that deliberately targeted black, Latino and senior homeowners.

These homeowners lost billions while banks and mortgage companies were made fabulously richer.

In addition, remember that when several banks and finance companies collapsed, those “too-big-to-fail” were bailed out by U.S. taxpayers, many of whom were victims of the fraud in the first place.

Adding to the crisis were two imperialist wars that cost untold billions in wasted money, to say nothing of thousands of U.S., Iraqi and Afghan lives.

And yet now the working-class public is being asked to sacrifice again, even though:

  • Corporate profits are higher than ever;
  • Executive compensation has exceeded pre-recession levels;
  • Big businesses like GE pay no U.S. taxes.

On the other hand:

  • Worker productivity is up while wages are stagnant;
  • 16 percent of the workforce remains unemployed;
  • One in five children live below the poverty line;
  • 2 million homes are in danger of being foreclosed on.

In these circumstances, after the recently concluded debt deal, vague promises of protecting programs serving the poor, along with Social Security and Medicare, offer little comfort. This is particularly so when those promises are accompanied by talk of “entitlement reform.”

Potential cuts have been referred to a “super-committee” to be decided by November.

With President Obama saying he is ready to “take knocks” from his own party for putting entitlements on the table, key elements of the social safety net may well be on the chopping block.

The probability of a double dip recession raises this danger.

There are precedents. Only a year ago, the lame duck Democratic-controlled Congress, in order to reach agreement with the GOP, agreed to cut food stamps for hungry families in order to preserve school lunch programs.

Yes, Congress made Peter the father go hungry, so his child Pauline might eat in school.

And now it seems the sharing of sacrifice is being turned on the labor movement and the very process of collective bargaining.

President Obama, while in Iowa this week, acknowledged the importance of collective bargaining, but then called on public workers to make wage and benefit concessions.

“I do say, though, to my friends in the public sector unions, that it is important that you are on the side of reform where reform is needed,” he said.

According to the president, unions should say, “We’re willing to make some modifications in terms of how our pension systems work so that they’re sustainable for the next generation of teachers as long as it’s a conversation, as opposed to it simply being imposed and collective bargaining rights being stripped away.”

He went on to call for sacrifice and “burden sharing” and suggested reducing state workers benefits while oddly lending legitimacy to the tea party led assault.

The president made his view clear: “If a public sector employee is able to retire at 55 with 80 percent of their wages, and the average public sector employee has got a 401(k) that they’ve just seen decline by about 20 percent and they have no idea how they’re going to retire, and they’re feeling burdened by a lot of taxes and they don’t feel like the public sector employers are making any adjustments whatsoever to reflect the tough economic realities that are facing folks who are not protected, then there’s going to be a natural backlash.”

A natural backlash? From whom?

The president surely knows only too well the backlash is a tea party inspired artificial “astroturf” corporate-driven campaign.

That there may be confusion among some workers on the issue in no way implies a natural or spontaneous movement demanding a  lowering wages and benefits.

AFL-CIO President Richard Trumka put it well recently: “And too many of our political leaders in both parties are stuck, focused on deficits instead of creating jobs, telling us we need to make tough choices and accept shared sacrifice. But working families – young workers, seniors, people of color, poor people, and people with disabilities – have been doing all the sacrificing, while billionaires get tax cuts, and corporations get tax incentives to export good jobs overseas!”

Jessie Jackson also takes note of the problem: “Shared sacrifice” is said to be lowering rates even further on the top end and corporations, while reducing school lunch programs, slashing funding to poor schools, and cutting affordable housing. “

In today’s political environment shared sacrifice means that workers and the poor are getting the short end of the stick. It cannot be an excuse to allow the slow but sure erosion of hard fought gains like collective bargaining and the safety net, no matter who tries to do it.

Shared sacrifice cannot mean that policymakers make choices that favor the value of corporate shares, while everyone else is sacrificed.


Photo: dignidadrebelde/Flickr 




Joe Sims
Joe Sims

Joe Sims is co-chair of the Communist Party USA. He is also a senior editor of People's World and loves biking.