Bipartisan talks between the Obama administration and congressional leaders of both the Democratic and Republican parties would have a deal, "beyond $1 trillion" in budget cuts, before the Fourth of July recess, Vice President Joseph Biden said recently, after the first of three scheduled meetings.
This will involve massive cuts in Medicare and Medicaid. Health care programs for the elderly and the poor are the main targets of the deficit reduction talks. The poor are likely to bear the brunt of the nearly $1.4 trillion gap between what has already been accepted by the group chaired by Biden, and the figure set by Boehner. Possible cuts for the Pentagon, one of the largest federal expenditures, have been largely taken off the table.
Press reports said the Wednesday session included discussion of a one-year payroll tax holiday for employers, another boondoggle for corporate interests -- to be sold to the public as a "job creation" measure. However, since Corporate America is already sitting on a cash hoard of $2.6 trillion, which it refuses to invest in hiring new workers (since workers no longer have enough money to buy what they have to sell), another $100 billion or so in "incentives" is unlikely to make any difference.
A one-year partial payroll tax holiday for workers was incorporated into the bipartisan legislation passed last December, combined with extending the Bush tax cuts for the wealthy, which the Republicans insisted be included. While touted by the White House as more "economic stimulus," the small addition to workers' paychecks has been more than gobbled up by the rising cost of gasoline at the pump! Meanwhile, these same workers will have to pay the taxes that the wealthy have once again succeeded in dodging.
What is taking place here is a bipartisan conspiracy to rob the working class rather than raise taxes on the rich back up to where they were before Reagan took the White House in 1980. This robbery will mean slashing trillions from Medicare, Medicaid, food stamps and other social programs, under economic conditions where these social benefits are more needed than ever. Consequently, no leading Democrat or Republican wants to alert working people about the immensity of the robbery that is being prepared for them.
Toady Obama played his part in downplaying the impact of the cuts, telling NBC News Monday, "There is a way of solving this problem that doesn't require any big radical changes. What it does require is everybody makes some sacrifices. And that we make these changes in a balanced way."
The major division between the two right-wing, big business parties (the Dems and the Repugs) is over taxes. The Democrats advocate at least a modest increase in taxes on the wealthy so that they can present the gutting of social benefits for working people as "equal sacrifice."
Are working people still, really, gullible and stupid enough to accept this without protest? We shall see.
The Republicans want to dispense with any pretense of "fairness," and make even bigger slashes in spending to finance additional tax cuts for the rich. So far, as in all previous such fake "showdowns" under Obama, the Republicans have prevailed, insisting that tax increases for the rich are not on the table.
This week's action focused on the $17 billion appropriations bill for the Department of Agriculture, which includes major cuts in nutrition programs like food stamps and WIC, a program that provides food commodities for pregnant and nursing women and their children. The bill also calls for a cut in the number of federal food safety inspectors.
According to an analysis by the Obama administration itself, the cuts would mean that 1.1 million recipients of emergency food aid will go hungry! Not satisfied with the depth of these cuts, a group of ultra-right Republicans then tried and failed to impose even deeper cuts, including an additional 10% chopped from WIC.
(This report is based on one that can be found here.)