THE FEDERAL government will shut down tomorrow as Republicans and Democrats in the US Congress are in a bitter dispute over budget cuts to America’s healthcare Medicaid system that provides medical insurance that low-paid workers rely on in the privatised health system.
Slashing federal money for Medicaid was a central part of Trump’s ‘One Big Beautiful Bill Act’ passed in July which included over $1 trillion in healthcare cuts – the majority from federal state health insurance programmes that provide cover for more than 70 million low income Americans.
The $1 trillion ‘saved’ by slashing Medicaid was essential for Trump to use in financing massive tax cuts to US corporations and the obscenely wealthy.
With Democrats demanding a ‘roll back’ on Medicaid cuts, and the Republicans refusing to budge, the agreement on a deal for federal funding has reached a stalemate that if not resolved by tomorrow (Wednesday 1st October), the start of the US government’s new fiscal year, then crucial parts of the government will simply shut down all non-essential functions.
These shutdowns are not uncommon in the US and usually last just a few days until some deal is agreed upon by the two bourgeois parties. However, this latest standoff and threat of a shutdown is significantly more serious than those of the past.
In previous shutdowns, federal government workers were furloughed and then reinstated to their jobs.
Last week, Trump ordered federal agencies to draw up plans for large-scale sacking of employees in the event of a shutdown and the closure of federal programmes that are ‘not consistent with the President’s priorities’.
Trump’s priorities, shared by capitalism worldwide, is to impose mass unemployment and poverty on the working class on behalf of a capitalist system that is gripped by the greatest economic crisis in its history.
Even before the threat of federal shutdown and the 2.1 million federal employees being fired, the effect of Trump’s previous drive to decimate jobs takes place today (Tuesday September 30) when over 100,000 federal workers are forced to formally resign.
The largest mass resignation in US history is the outcome of the campaign launched earlier this year by Trump and led by Elon Musk’s Department of Government Efficiency (Doge) which strong-armed federal workers into accepting deferred resignation as an alternative to immediately being sacked.
Musk left Doge under a cloud having failed to achieve the $2 trillion savings he promised to help put a dent in the massive US national debt – currently standing at over $37 trillion despite all the sackings. Interest repayments on this debt are running at around $1 trillion a year.
A looming US government shutdown is now being seen by some political commentators in the US as another chance for Trump to slash even more federal jobs in what is being called his ‘Doge 2.0’.
Trump and Musk took as their hero Argentina’s chainsaw wielding president and self-proclaimed ‘anarcho-capitalist’ Javier Milei.
Milei’s claim to having created an ‘economic miracle’ by a campaign of destroying jobs and social infrastructure was destroyed last week when Trump was forced to bail him out with a $20 billion lifeline as the Argentina economy and its currency crashed.
This is on top of a recent IMF bailout of $20 billion.
The headline of a Daily Telegraph article by Ambrose Evans-Pritchard summed it up saying: ‘Argentina’s financial crash is the first big defeat for Trump’s global Maga movement.’
All Milei achieved was to devastate the Argentinian economy and lay waste to its industrial base in what Evans-Pritchard described as ‘the worst form of austerity’. There is no ‘good form of austerity’ – which seeks to impose on workers and youth mass unemployment and destitution in an increasingly desperate attempt to rescue capitalism from being crushed by the world crisis.
Only the working class is powerful enough to put an end to the political and economic crisis erupting in America and throughout the world by taking power and putting capitalism out of its death agony with the victory of the world socialist revolution.
This demands the building of sections of the International Committee of the Fourth International across the world to provide the revolutionary leadership necessary for victory.
