Insights and Lessons of the Federal Spending Bill

src.adapt.480.low

President Obama signed the massive $1.1 trillion, 1600 page annual budget bill on Tuesday. It should have been designated a national day of morning for what it contained.

It’s difficult to decide what was more sickening – it’s insane and inhumane spending provisions or “riders” attached to the bill completely unrelated to spending, which would have had a much more difficult time passing if they had to be debated on their own merits by Congress with the public’s fully awareness.

Special criticism is warranted for several spending measures of the bill. These include cuts to pensions for retirees, Environmental Protection Agency reductions of $60 million, a $93 million cut to the Women, Infants and Children (WIC) program (although allocated funds can now be spent for potatoes thanks to efforts of the potato lobby), and $133 million less for education. Funds for mass transit, which reduce ozone-destroying pollution and save tens of billions in road repairs, saw no budget increases.

What didn’t stay the same was Pentagon spending. Roughly 55% of the entire $1.1 trillion will be devoted to the military – for ships, planes, tanks, bombs, bullets, drones, bases, installations, wars and occupations to keep the US Empire at full strength. The donut effect of our society will be the further consequence – fortifying the periphery while the center collapses.

The spending side of the budget bill is militarily counterproductive, economically inefficient, and morally repugnant.

Ah, but those are only the spending related measures. Two non-spending riders were also included – passed by Congress and signed by the President.

The one rider shifts Wall Street losses from risky derivatives to guess We the Taxpayers. Derivatives aren’t investments in real things – products, services or companies, but rather casino like bets, for example, on the rising or falling interest rates or prices of commodities. The largest 4 US banks (JP Morgan Chase, Citibank, Bank of America and Goldman Sachs) are on the hook for at least $250,000,000,000,000 (250 trillion dollars) of these derivatives. Following passage of the 2010 Dodd-Frank financial reform measure, many derivatives were unshielded by taxpayers. But Wall Street lobbyists worked tirelessly to influence Congress to shift all of these previously unshielded casino financial bets to the protective umbrella of you and me via the public Federal Deposit Insurance (FDIC) program if and when these derivatives implode – which is a good bet since many derivatives are based on the rising price of oil.

US Senator Dick Durbin in 2009 during the depths of the financial crisis said on an Illinois radio station, “And the banks — hard to believe in a time when we’re facing a banking crisis that many of the banks created — are still the most powerful lobby on Capitol Hill. And they frankly own the place.”

It might be easy to discount such words, refreshingly honest as they were by any federal public official, since Durbin is a Democrat – despite the fact he was a high-ranking member of the Senate Banking Committee,

It’s harder to ignore the words of Stanley Fischer, the current Vice Chair of the Federal Reserve — which is more beholden to banks than to the public. In unscheduled remarks last week at the Peterson Institute for International Economics, Fischer said, “I thought that when Dodd-Frank started, that the banks would not succeed in influencing it, having lost all the prestige they lost…Boy, was I wrong.” Yes Stan, you were wrong.

Even the editors at Bloomberg news, about as pro-business as any publication in this country, called the Wall Street bailout rider “A New Threat to Financial Reform.”

And that takes us to the second rider of the budget bill. It concerns a topic that is never far removed from the consciousness of Washington politicians – money in politics and elections

The spending bill included a meteoric rise in allowable political investments (mistakenly called “contributions”) from individuals to political parties. The degree of the increase wasn’t to keep up with inflation (at, say, 2-3%). Nor was the final increase 10%, 25%, 50%, or even doubling the previous limit. Way too low. The new “limits” are now 8 times the old ones – from $194,400 to $1.5 million over a two year election cycle. Eight times the previous limits.

This makes the Democratic and Republican parties and by extension their candidates even more beholden to the voices and interests of the super rich and less inclined to listen and respond to the interests of low- and moderate-income people. Those would just happen to be coincidentally the majority of actual voters who are seeing wages stagnant, income decline, prices rise, debts soar, and good jobs replaced by lousy ones. These realities are even more acute, of course, for youth and people of color. Since the Supreme Court has concluded that money is speech, those with money will be booming their views, wants and needs even louder and more forcefully that ever before.

It’s easy to get lost among the mind-boggling large numbers and plethora of programs of this spending bill. However, there are 2 important lessons that must either be learned or reinforced by what culminated on December 16 when President Obama signed the spending bill.

The first is that this bill is a crystal clear example in both its spending and non spending provisions, may be more so than any in modern times, of the disproportionate power and rights between the superrich and corporations on and the vast majority of the public. It provides fresh evidence of what Princeton and Northwestern professors concluded in the first ever comprehensive scientific study, published earlier this year, on who governs in our society. Their conclusion was that “When the preferences of economic elites and the stands of organized interest groups are controlled for, the preferences of the average American appear to have only a minuscule, near-zero, statistically non-significant impact upon public policy.” In other words, the United States is not a democracy, but rather an oligarchy or corptocracy.

The second lesson, innately related to the first, is that the old ways of working for change must be rethought. Focusing on changing or retaining a single candidate, or addressing single issues or trying to change single laws, or single regulations that seek to address a single problem, help a single community or a single constituency is singularly ineffective.

We must work to form coalitions that unify people, places and problems around solutions that address underlying roots – solutions that if implemented will make it easier for all of us working on whatever election, issue campaign, or regulatory reform to be effective. That what Move to Amend seeks to address – root causes and structural injustices and inequities. Abolishing corporate “personhood” and money defined as “free speech” can liberate all of us as we seek peace and justice in all its forms.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s