FT-CI

Crisis in the center of world imperialism

The government of the United States, brought to a standstill

08/10/2013

The government of the United States, brought to a standstill

On October 1, the US federal government had to close a large part of its offices, for lack of funds to operate, after the House of Representatives of the Congress, where the Republican Party has a majority, rejected the budget for the current fiscal year and refused to approve even temporary resolutions, that would allow continuing with line items of the budget. Nothing similar has happened since 1996, when then Republican leader Newt Gingrich was heading the so-called "conservative revolution" against Bill Clinton’s Democratic administration.

Under the influence of the Tea Party, a minority faction of the extreme right, that supports a staunchly neoliberal program based on lowering taxes and no government intervention in the economy, the Republican Party was demanding, in order to pass the budget, that the government back down on implementing the reform of the health care system, that is presented as one of the main achievements of the Democratic administration. Despite the fact that this reform, known as Obamacare, favors private insurance companies, since it forces every person to take out health coverage and in no way involves establishment of a universal system of public health, the Republican Party, and, in particular, the Tea Party, describes it as "socialist" and has as one of its main causes, the struggle against this health care system. The attempt of the Republicans to demolish the new legislation on providing health care, by way of pressure and parliamentary blackmail, after having lost around 40 votes in Congress and the 2012 presidential elections, shows the decline of this imperialist democracy, based on a bipartisan system, in the service of the different business lobbies.

With the failure of the emergency meeting between President Obama and the leaders of the Republican and Democratic legislators, to unblock the situation, there is no end in sight for this crisis of governability that the main imperialist power of the world is going through.

Both the government and the big banks and corporations, that view with concern the extreme positions to which the Republican Party is being led, to the detriment of its more moderate wing, are already thinking about the next congressional battle: raising the debt ceiling that Congress must approve in the middle of October to prevent the federal government from going into default, with unpredictable consequences, not only for the weak US recovery, but for the financial system and the world economy.

Leadership questioned

This crisis highlights the particularly weak time of Obama’s presidency and the political polarization in Congress, which is eroding the credibility and increasing the perception of a loss of power of the United States in the world.

The situation created by the government shut-down and the next battle in Congress for raising the debt ceiling made Obama cancel two parts of his trip to Asia, which represents a blow to the strategic turn in foreign policy that the US government is seeking, to strengthen its presence in the region and contain China’s advance.

In the case of Syria, the almost certain humiliating defeat in Congress, that was going to vote against the use of military force, in the context of opposition by a majority of the population to a new war, has already made Obama back down on his policy of launching a limited attack against the Syrian regime of Bashar al Assad, that ended up accepting a diplomatic solution proposed by Russia.

These disputes between the Executive Branch and the Lower House of Congress could also make the policy of dialogue, that the US government adopted to move forward in resolving the conflict over Iran’s nuclear program, fail. If the new Iranian President Hassan Rouhani were ready to make significant concessions, in exchange for which the economic sanctions against Iran, that are stifling that country’s economy, would be lifted, Obama would see his space for maneuver to be very limited, since, unlike other Presidents that had the authority to take this sort of measures, he is depending on a favorable vote in Congress.

Republicans and Democrats against the workers and the groups of the poor

The administrative shut-down affects areas considered "non-essential" for keeping minimum functioning of the capitalist state, among them, those that provide services to groups of the poor (like food assistance programs for groups with few resources), labor relations offices and committees regulating corporate and financial interests, while the financing of the military, the agencies of domestic and foreign espionage, like the CIA, the FBI and the National Security Agency, and the repressive apparatus in general, is being kept.

Federal government workers are the ones who are paying for the battles over the budget between Democrats and Republicans in Congress. Around 800,000 of the two million federal employees have been suspended without pay, while the shut-down lasts, while many more will find themselves forced to work without being paid, not to mention the thousands of workers hired by the government for cleaning jobs and other services, that will lose their jobs and that just this year led three strikes in protest because of their low wages. This new attack on public sector workers, in the context of the fact that the effects of the 2008 Great Recession on employment are still being felt, is in addition to the wage freeze established three years ago by President Obama and the loss of around 20% in wages, because of the automatic cuts (confiscation) in effect since March of this year, to reduce the fiscal budget deficit. Despite the fact that the Democratic Party is trying to capitalize on the crisis with "populist" rhetoric, it has always given in to Republican pressure – and that from the Tea Party – to adopt an increasingly right-wing agenda, and present the cuts in public spending and the budget, and lowering taxes on the rich, as a "lesser evil," in front of the Republican offensive.

Beyond political polarization, a basic consensus exists between Republicans and Democrats on making the workers and groups of the poor pay the cost of rescuing US capitalism from the crisis.

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