As workers boil with anger Obama and Republicans vow ‘no deal’


THE USA is set to hit its debt ceiling by 17 October, if the Houses of Congress are unable to agree a massive cuts programme. The outcome will be a catastrophe for the USA and leave the government with half the money needed to pay its way, mean-ing that 50% of the government and its administration will have to shut down.

The US government and Republicans are at stalemate over a deal on a cuts programme that will allow them to agree extending the credit limit and avoid default.

The deal that the Republicans want is savage cuts in Medicare and Medicaid, the scrapping of the Obama healthcare measures, and the ending of food stamps to feed the poor, in return for which they are prepared to vote for a rise in the borrowing limit.

In a letter to Republican House Speaker John Boehner, Treasury Secretary Jack Lew stressed that: ‘The Treasury now estimates that extraordinary measures will be exhausted no later than October 17. We estimate that, at that point, Treasury would have only approximately $30bn to meet our country’s commitments.

‘If we have insufficient cash on hand, it would be impossible for the United States of America to meet all of its obligations for the first time in our history,’ he said.

He urged Congress to ‘act immediately’ and increase the borrowing ceiling, which has been limited at $16.7 trillion since May. However, in return for supporting a rise in the debt ceiling, Republicans are pushing for a series of the most vicious measures.

So far, Republican Representatives have passed a budget bill to keep the government operating, while bankrupting Obama’s healthcare law.

Obama, last Friday, criticised Republicans for the vote which proposes funding federal agencies at an annualised rate of more than $986bn (£615bn), but included a provision that strips federal funding for the Affordable Care Act. He said that if Congress fails to raise that level, ‘the United States will default on its obligations’ and ‘basically, America becomes a deadbeat’.

Obama has vowed that he will not make concessions as he did during the 2011 debt crisis, when he accepted a $2.1 trillion spending cut over a decade.

Treasury Secretary Lew has repeated that unless the US is allowed to extend its borrowing limit, the country will be left with about $30bn to meet its commitments of some $60bn.

Meanwhile, the US working class and youth are becoming angrier an angrier as US capitalism and its industrial heartland in cities such as Detroit go broke, with their main centres denuded of factories and turning into farmland.

At the same time as Detroit disintegrates, in nearby Chicago, another US urban giant, hundreds of schools and colleges are being closed, with pupils forced to stay at home and college students unable to pay rocketing tuition fees.

Whole sections of the bankrupt cities are now uninhabitable after thousands of workers have been evicted and are living on the streets.

The American dream has turned into a nightmare with unheard of wealth turning into abysmal poverty and deprivation.

However, it is US and world capitalism that is the ‘deadbeat’ of this situation. The crisis of world and US capitalism is now awakening the US workers and youth and driving them forward.

The US masses recently sent a message to Obama that he could not ignore, that they would not allow him to invade Syria, and now millions of US workers and youth are getting organised.

There have been huge strikes in the great retailers like Walmart, while in the fast food industry hundreds of thousands of workers and youth have taken part in mass strikes and are forming and joining trade unions.

The US working class is now pushing forward. It is disgusted with the ‘deadbeats’ face-off between Obama and the Republicans while they are suffering.

It will not be long before the US workers break with the Republicans and the Democrats and form a Labour Party to organise the broadest masses and also a revolutionary party to lead the struggle forward for a socialist revolution and socialism.