Richard Lachmann
SUNY- Albany
American politics, at least since the Republicans took control of the House in 2010, has been gridlocked. It appears likely that even if the Republicans suffer a massive defeat this year under a ticket headed by Trump or Cruz, they will continue to control the House. Who then is able to get policies and benefits out of the Federal government, and who appears likely to benefit under the next Administration?
As usual, it makes sense to follow the money, specifically the compromise reached in October 2015 on Federal budgets for the next two years. The deal mainly continues the status quo: slight increases in military and civilian spending, offset with cuts to Medicare and Social Security disability payments. This compromise continues the recent practice of balancing spending increases for the military with equal amounts for the entire civilian side of the government. If this tendency continues we can expect lush times for the military and continued austerity for every other governmental program.
The debt ceiling was raised enough to carry the government through the first half of 2017. The Export-Import Bank was reauthorized, although because Senate Republicans have refused to confirm new appointees to the Bank’s Board, that authorization is almost meaningless since the Board lacks a quorum to approve loans larger than $10 million.
Amidst the stasis, Congress did make a major spending decision in the budget compromise: a decision to make an array of temporary corporate tax breaks permanent at a ten year cost of $830 billion ($680 billion for the cuts themselves and $150 billion additional in Federal interest payments on the increased debt due to lost revenue). This amount is equal to all the savings from the sequester over those years. In other words, cuts to scientific research, education, infrastructure spending and other domestic programs have all been used to extend corporate tax cuts.
There was one other big winner in budget negotiations last year: In April 2015, Congress passed a law that permanently ended the annual cuts (temporarily waived in large part each year by Congress) to Medicare payments to doctors. Like the tax cuts, this bonus to doctors of $140 billion over ten years, is ‘off-budget,’ i.e. not counted against spending limits.
In a lesser but still significant sign of Congressional priorities, the budget compromise included a deal to end the ban on the export of US crude oil exports. This provision, the highest priority of energy firms, was won by Republicans at the cost of abandoning their efforts to defund Planned Parenthood and limit immigration, causes dear to the hearts of their social conservative base.
Thus, the big winners in budget negotiations were (surprise, surprise) large corporations, especially oil producers, doctors, and the military contractors who will garner the lion’s share of increased defense spending. The losers were everyone else, especially those who depend on civilian programs. Despite the partisan gridlock, the most powerful interests still are able to get Congress and the president to break budget discipline and pass out tax cuts and new spending.
Should we expect a change under a Clinton Administration, even if Democrats retake the Senate? We need to remember that this compromise was negotiated and endorsed by Obama and the Democratic leadership in Congress. While not reflecting their policy preferences, the tradeoffs Obama and Pelosi made, under admittedly dismal political conditions, reflect the power corporate and military elites derive from their superior ability to monitor Congressional negotiations and directly and indirectly offer contributions (and threaten punishment) to Congressional candidates. Unless this election spurs heightened mass mobilization that is sustained after Inauguration Day, we can expect more of the same in 2017 and after.
