After the government shutdown, more than 800,000 federal workers are immediately furloughed and over a million more will work without pay. Offices that provide important social services and National Parks and museums will be closed. Depending on its duration, the shutdown could cost billions to the US economy. Goldman Sachs estimates that this shutdown would reduce growth in the fourth quarter of the year by 0.1 per cent at an annualised rate if it lasts only 2 days, and by 0.3 percentage points in case it lasts a week. (The last shutdown in 1995/96 lasted 20 days and represented losses of 1.4 billion dollars to just the federal government)
Pushed by Senator Ted Cruz and the Tea Party agenda, Republicans are carrying out a harsh campaign to defund Obamacare, using the threat of a shutdown as a bargaining chip. Since Republicans have won the Majority in the House of Representatives in 2010, they have used this power to put pressure on the White House and force changes in the implementation of the healthcare law. Although the strategy is not new, this time the measure has reached disproportionate consequences. The reason for this intransigency should be searched at the Republicans infighting. The tough dispute between factions of the Republican Party has given the Tea Party, its ultra-conservative wing, an unusual power over the bargaining on Congress. This faction, which constitutes less than 20% of the House Representative caucus but holds the margin of victory over the Democrats, has deliberately led the negotiation to a stalemate. GOP senators have also been attacked by a campaign funded by the ‘Conservative Senate Fund’, for not being hard enough in the fight against Obamacare. The use of shutdown as a leverage to defund the healthcare overhaul is aggravating the internal crisis in the Republican Party between those who acknowledge the cost of holding such an extreme position and those who believe they are lacking combativeness to attract votes.
The latest plan proposed by the GOP on Sunday before the shutdown included the funding of the government through Dec. 15, and delayed for one year the individual coverage mandate and the insurance exchanges (see below) which were set to launch on Tuesday and eliminated a 2.3 percent tax on medical devices. The Democratic-led senate rejected the bill Monday and sent it back to the House without the ACA postponement and the tax repeal.
The Phantom of Default
The ‘sequester’ is a package of spending cuts designed in 2011, when Obama and senate Democrats were first forced into trading spending reductions for an increase in the debt ceiling. It was the price they paid to avert the Fiscal Cliff. The Budget Control Act demands $1.15 trillion in savings over the next 10 years, beginning March 1st 2013. These cutbacks affect spending on “discretionary” programs and result in: cuts in unemployment insurance, defunding of education, furloughs of federal workers, and the loss of millions of jobs.
The historical debt growth under Obama administration has its origins in the government bail-out to banks and companies to prevent bankruptcies. The Corporate Class, in turn, discharged the crisis on the workers and the state, as it is the case of the Detroit default. On the other hand, a strong determinant of the rise in the federal debt is the increasing expenditures in Defense. In this point, Democrats and Republicans agreed and voted unanimously to ensure the payments for the military forces in case of a shutdown.
The ObamaCare dispute
If any worker in the US was convinced that the Democrats were fighting to give health benefits to the people, the facts show otherwise. The real struggle behind the scenes is between two sides of the same capitalist class. Although the ACA was allegedly enacted to give health care to a large portion of the population, from the beginning it never jeopardized the profits of the health industry. From then on, every modification has made it more moderate and adjusted it to the will of the corporations. (see table)
So on the one side, there´s Big Pharma, the HMOs (health insurance companies), private health providers and other health-related corporations who are eager to take a big bite at the estimated 25 million people thrown into the health insurance market, now that they are compelled to buy insurance by the law’s individual coverage mandate. On the other side, employers outside health industry will face the additional costs of offering health insurance benefits –paying part of the fee- to their employees. However, it’s a fact that the start-up of the ACA provisions could enable the access to Medicaid for many poor people in the country. The Republicans attack on Obamacare is reactionary and overlooks the urgent need of extended health care for the poor. However, Obamacare fails to bring a real solution to needs of the people. Although it would ease access to health care for many people through Medicaid expansion and government subsidies, the law was dictated by the corporations of the health industry and written for their profit. Besides that, there is the question of how to guarantee a decent health care when Medicaid is already in meltdown.
National universal health care
Two-thirds of the population in the U.S. today wants a publicly-run health service. Health care is a human right, and as such, should be guaranteed by the federal and state governments. The only way to achieve complete access to health care is by building a universal public health care system, run by the state, funded by taxes to the major corporations, and administered by a committee of workers and users. Private clinics and drug companies must be expropriated to give health care to the almost 50 million people that today still fail to have access and prevent the 100,000 annual deaths due to lack of health coverage or partial coverage and unaffordable costs. It’s inconceivable that companies continue to profit from people’s illnesses. But Democrats as well as Republicans are up to their ears in ensuring profits to capitalists. We should expect nothing good from the “best Congress money can buy”.
The government shutdown is the result of the culmination of the ongoing dispute between Republicans and Democrats, neither of whom represents the needs of the working class. As usual, Republicans are pushing to reduce government spending, while Democrats profit from their opponents’ fanaticism and fiercely defend the ACA (Affordable Care Act) at the same time that they have endorsed every cut to it since its enactment in 2010. Despite their differences, Democrats and Republicans share a common objective: defending the interests of the capitalist class. The working class must build its own political tool to achieve class independence.