ON Tuesday night, the chairs of the US House and Senate budget committee, Paul Ryan (Republican) and Patty Murray (Democrat), held a joint press conference at which they announced a bipartisan deal on the huge US debt crisis.
The background to Tuesday’s show of unity between the two bourgeois parties was the fiscal crisis that came to a head in the autumn when the Republican-dominated House of Representatives refused to pass into law a Democrat bill enabling the Federal government to raise the US debt ceiling from $16.7 trillion, leading to it defaulting on its loan repayments.
Such a default would have immediately crashed the entire world banking system and left countries like China and Japan, which hold trillions of dollars of US debt, in ruins.
This threat to crash the international capitalist system overnight was borne out of the calculation by a section of the US ruling class associated with the extreme right-wing of the Republican Party that the debt mountain was unrepayable and the only way for American capitalism to survive was to bring the crisis to a head through a default that would wipe out the debt and bring economic destruction to its capitalist rivals.
They calculated that out of the wreckage of world capitalism only the strong – that is the US capitalist class – would survive.
In the event, they pulled back at the last minute and cobbled together a temporary deal to raise the borrowing limit up until February 2014, when the whole issue would be raised again.
Essential to this deal was the convening of the joint budget committee to look at cuts in Federal spending to pay off the national debt – a debt that has been more than doubled through bailing out the banks following the collapse of 2008.
It is this committee that reported back on Tuesday, and the cuts which the leaders of both parties have agreed to will leave millions of working class families completely destitute.
The entire US banking crisis is to be dumped squarely on the backs of workers through savage cuts.
Federal employees are to have their pension contributions increased by 1.3%, saving the government $6 billion, while federal benefits paid to the unemployed will be automatically stopped after 26 weeks and they will be left to starve.
Official figures show that 1.3 million unemployed will have all their money stopped by the end of December and a further 3.6 million in the first six months of 2014.
Alongside these cuts are the existing cuts already made by the Obama administration since 2011, which have seen about a trillion dollars cut from expenditure on health and welfare projects under the so-called sequestration rules of mandatory cuts in Federal spending.
The projected savings from all these cuts will reduce the US national debt, running at about $17 trillion, by a measly $23 billion.
This deal doesn’t mean that US capitalism will not face exactly the same fiscal crisis in January over raising the debt ceiling – it only deals with cuts, not the overall question of the debt ceiling.
Already, the Republican Heritage Foundation and Tea Party, who were behind the drive to default in September, are denouncing it as a sell-out.
The inescapable fact is that there is no solution to the world crisis of capitalism in these deals.
US capitalism can only survive today by destroying its own working class, plunging millions into the kind of poverty that will far exceed that of the thirties when families literally starved to death during the depression, while ,at the same time, visiting ruination on its capitalist rivals.
The American working class are refusing to accept this as a future as the recent wave of strikes, especially amongst youth, has shown.
The burning issue is for the US unions to break with the bourgeois Democrats and form their own Labour Party.
Alongside this must be the fight to build a section of the Fourth International to lead the coming American socialist revolution.
