US workers bracing themselves for ‘fiscal cliff’


THE US labour movement is now bracing itself for a last minute ‘deal’ on the ‘Fiscal Cliff’ with the Republican Party, in which the burden of the gigantic US debt will be placed on the backs of the US working class and the poor.

On December 21 the AFL-CIO trade union federation urged ‘Tell President Obama and Congress: Hold the Line Against Social Security Benefit Cuts.’

It added: ‘Republicans once again are demanding benefit cuts to pay for tax cuts for the rich, and threatening to harm the economy unless they get their way.’

It said of the Boehner proposals that the Republican Party itself had withdrawn as inadequate, that they would extend tax cuts on income between $250,000 and $1 million a year – which would benefit millionaires as well. In fact, about half of the Boehner tax cut would go to millionaires.

‘At the same time, Republicans are demanding to cut Social Security Cost-of-Living Adjustments through the so-called “Chained CPI.”

‘Tell your legislators and President Obama to reject House Speaker Boehner’s proposal to extend tax cuts for the richest Americans and that they oppose any cuts to Social Security, Medicaid or Medicare benefits, regardless of who proposes them.’

On the same day the US Labour Department declined to suspend the new trade pact with Bahrain, despite a request from the AFL-CIO. Instead, Labour Secretary Hilda Solis urged more diplomatic talks with Bahrain to resolve complaints about the Persian Gulf monarchy’s crackdown on unions and labour reform protestors.

The US government stated: ‘We are hopeful that through engagement with our trading partner we will find a solution that is good for workers both in the United States and Bahrain.’

The Obama regime will treat the US working class no differently than it is treating the workers of Bahrain.

Congress needs to agree fiscal rules by 1st January, or steep tax rises and deep spending cuts will take effect automatically.

Analysts say the so-called fiscal cliff could take the US into recession.

Boehner said he had been unable to garner sufficient votes to secure passage of the bill. Even a bill that was presented to Republicans in the House of Representatives as a $3.9 trillion tax cut could not persuade enough of them to back it, because it also proposed raising taxes on people earning more than $1m.

He said in a statement that the bill ‘did not have sufficient support from our members to pass’.

Shortly after, the White House said President Barack Obama would work with Congress.

Earlier on Thursday, the House of Representatives narrowly passed a companion bill that would cut domestic spending while protecting the defence budget. The House is controlled by the Republicans, but the Senate is Democrat-led.

The bourgeoise of the world fears that raising taxes while massively cutting spending on the Medicare and Medicaid programmes for the poor will have a huge impact on households and businesses.

Many ‘experts’ believe it could push the US into recession, and have a global impact on growth.

There is not the slightest doubt that Obama will make a deal to ‘save’ the US, EU and world capitalist economy by heaping the burden of the crisis onto the backs of the US workers and the poor.

The US trade unions must get ready to break with Obama and the Democratic Party and found a Labour Party to mobilise the hundreds of millions of workers and the poor for the struggle for socialism.

They must spell out that they are prepared to resist attacks in medicare and Medicaid with a general strike action and that they will not give an inch.