If you are not numbered among the wealthiest five percent of Americans with the distinct prospect of securing 85 percent of your annual income across the length of your retirement, you should be terribly worried. If you don’t qualify, the present Republican onslaught is not for you.
Thirty years in the making, the Republicans are bent on evaporating anything that resembles a public good, on curtailing government and most anything government does beyond security and basic services. They are committed to dissolving all regulatory regimes, from financial and banking to environmental conditions and labor standards. They are insisting on swapping out social security support for privatized and self-directed retirement schemes (401(k)’s). They are pushing to dissolve public education and to destroy union representation, especially for public workers such as teachers. And they are working to outsource public functions to private for-profit outfits.
The current trend has a long trail. Contrary to what tax-cut rationalizers have been insisting, Bush-era tax cuts diminished, not increased, total income in the US – by $2.7 trillion. In 2008, average income was down 5.8 percent compared to 2000. One in every eight dollars in tax reductions went to the top .1 percent of taxpayers (those earning $2 million per year or more). These are the same tax reductions extended in December 2010 for another two years by Obama under Republican pressure. In the mid-1970’s, the top one percent owned 20 percent of the nation’s wealth. Today, it is closer to 35 percent. The top 20 percent own 80 percent, the bottom 20 percent something like one percent.
Where Republicans are unable to achieve their desired ends directly, they do it by indirection, starving public services of the means to pay for public activities, or now, as in Wisconsin, fabricating budget shortfalls by arranging large corporate tax reductions as a pretext to cut social programs. The overwhelming beneficiaries of this drastic rolling back and restricting of taxes, old and new, are corporations and the wealthiest of citizens, to the detriment of everyone else.
Republicans intimate that taxes are justifiable only if taxpayers are receiving immediate direct benefits. They ask why anyone should support salaries and pensions of public workers whose services don’t make them directly better off, or pay to school others’ kids, or contribute to roads and services that don’t directly and immediately service them, or cover costs of hospitals that treat those who cannot afford health care for themselves. People are for clean air and water, polls are indicating, so long as they cost them nothing. In his Conservative Political Action Conference (CPAC) address last week, Rep. Ron Paul (R-Texas) asked the audience whether they would support paying just a flat ten percent income tax rate to cover basic security services, and pay for everything else on a strictly use-only basis. The response was overwhelmingly affirmative.
By extension, Republicans seek to defund any public institution they deem aversive to their ideological commitments or political interests. Among the 150 programs cut last week by the House of Representatives in their budget slashing frenzy are the Public Broadcasting System (PBS), the National Endowment for the Humanities and the National Endowment for the Arts. All are considered liberal institutions, supposedly biased against, if not overtly critical of, the Republican agenda. The current budget crisis has become a vehicle to rid Republicans of their perceived nemeses. This is a coup by other means. As America becomes more heterogeneous, the Republican strategy is dramatically to depluralize the political, to control message-making through tying up the purse strings and to extend wealth by narrowing access.
While there are deep structural challenges to US fiscal health, much of the immediate budgetary crisis has been carefully crafted by the Republi-scammers. Even as they loudly profess their concern over US Treasury debt, they have cut taxes wherever possible, adding dramatically to that same debt. Thus, in December, they insisted on extending the Bush tax cuts to the wealthiest two percent of taxpayers, knowing full well the move would add $700 billion to the very national debt they feel so strongly compelled to reduce. Two months later, they cut $60 billion from social and regulatory programs with which they take ideological issue, including Planned Parenthood, the Environmental Protection Agency, the Securities and Exchange Commission and the Consumer Financial Protection Bureau.
So, the Republican numbers don’t add up, and their logic doesn’t hold up. While unabashedly criticizing runaway spending, they add exorbitantly to the deficit; amid scathing accusations about labor’s selfishness and public workers’ cushy pension benefits, they nevertheless license record tax cuts for corporations and extensions of tax cuts to the wealthiest Americans. Libertarian to a fault, they are overwhelmingly against choice; claiming loudly to be pro-democracy, they are as noisily dismissive of it when its consequences run against their interests.
Wisconsin has become the battleground for the future direction of the republic. After inheriting a budget surplus of $120 million, in his first month in office, the new Republican governor, Scott Walker, orchestrated a nearly $140 million tax break for out-of-state corporations. He then declared a budget shortfall for this year of $136 million. To balance the budget, he and his Republican supporters have sought to force state workers to contribute to their pension funds, amounting to a salary reduction of roughly $5,000 per employee.
Republican justifications have been multiple. Private employees contribute considerably more to their retirement funds than public workers are now being asked to, so this is only fair, we are told. But numerous studies show that before the new pension contributions, public worker compensation is at least five percent less than that of comparable private employees, other things equal. The corporate tax giveaways are necessary for job creation, it is said. But there is little evidence that general tax reductions create jobs. George W. Bush enacted large and sustained tax reductions while president, and his efforts cost the economy eight million jobs during his eight years in office. If Republicans were serious about the job-creating incentives of tax breaks, targeting those breaks specifically to jobs created would be a far more effective and honest means to this end.
Republicans claim that union power has created the budget mess Wisconsin and other states face. Wages and working conditions are set by governors and legislatures in negotiating with local unions, not by the latter alone, and the fact that public service employees earn less than their non-unionized private employer counterparts reveals the relative lack of union power. One only has to look at unionized autoworkers in Detroit for evidence of reasonableness in the face of dire economic conditions. The US auto industry would not have survived, let alone so effectively revived, without considerable union compromise. So much for Walker’s back-to-the-wall hyperbole.
It seems evident, then, that Walker reduced corporate taxes to give himself the platform both to cut state employee salaries and to diminish the power of labor in the state by seeking to desiccate bargaining rights. It is the latter move – the arrogant disrespect for hardworking and economically challenged state employees – that has so infuriated them and a broad sweep of supporters across the state and the country. The responses to the protests have been revealing. Sarah Palin has chided state workers that “You must be willing to sacrifice.” But of course, legislators and the governor have not voted to sacrifice their salaries, and corporations have not been asked to contribute a small percentage of their profits for the public good – quite the contrary. The fix proposed is once again on the backs of the more vulnerable among the state’s citizens.
Paul Ryan, Wisconsin congressman and Republican chair of the House Budget Committee, ventured that the Madisonian protests are mimicking “the riots” in Cairo. Not only were there no riots in Cairo – what violence there was, revealingly, was instigated by the Egyptian government – there has been nothing that could closely resemble rioting in the Wisconsin sit-ins. Ryan’s remarks reveal a profound lack of understanding of democracy, of the power of the relatively powerless, of pluralism and of quintessentially American forms of political life. Madison, like Cairo, is a popular democratic social movement.
Republicans, then, have arrived in force, no doubt sincere in their core convictions and dogmatically forceful in their imposition (Walker refuses to negotiate with, or even listen to, his Democratic interlocutors). Implementing his ideas, nevertheless, has been nothing short of profoundly disturbing. The pushback by Madisonians (in the political sense, too) in Wisconsin, and now, elsewhere across the Midwest, suggests that Americans are just waking up to the betrayals and dangers of the latest chapter in the Republi-scam. Whether, over the next two years, Republi-scammers or Madisonians will win out depends on the national and local resolve, organizational savvy and rhetorical effectiveness of the latter, for right is surely on their side.