Pataki and Giuliani Bleed New York
Budgets, Bankers & Bloodsuckers
Riding the wave of reaction from Washington, Governor George Pataki and Mayor Rudolph Giuliani have proposed state and city budgets aimed point blank at the poor and working people of New York. As is usually the case when American capitalist politicians point their fiscal guns, blacks and minorities are most directly in the line of fire. But these cuts are by no means limited to minorities and the poor. If enacted, they will gut everything from transportation to public parks, hospitals to housing, day care centers to AIDS hospices. Many thousands of New Yorkers now living on the margins will be plunged into an abyss of homelessness, hunger and disease. Only those who inhabit an insulated world of private wealth and privilegeof plush-carpeted corporate boardrooms, luxury high-rises, stretch limousines, expensive boutiques, tony health clubs and private security guardswill escape the effects of the scorched-earth measures now being proclaimed from Albany and Gracie Mansion.
An Injury to All
At the top of the Pataki/Giuliani hit list are welfare and Medicaid. In proposals reminiscent of the horrors of the nineteenth-century British workhouse, welfare recipients in New York State will be fingerprinted to prevent "cheating;" men deemed to be "able-bodied" will be cut off welfare after ninety days, during which time they will be forced onto public works projects. Many mothers receiving Aid to Families with Dependent Children will likewise be compelled to work for the pittance they get, even though the cuts will result in fewer day care centers for their children. Twenty-one thousand people will immediately lose their rent subsidies and many of them will end up on the street.
Billions of dollars are to be slashed from Medicaid, which pays health costs for welfare recipients and the disabled. The Medicaid cuts will, in turn, create grave financial difficulties for the citys already underfunded public hospitals. Hundreds of hospital beds will be eliminated, and Harlem Hospital, the sole provider of medical care for tens of thousands of the poorest people in the city, will probably be forced to close. In addition, Giuliani plans to privatize five or six public hospitals. Over 80,000 hospital workers are expected to lose their jobs. Yet these Medicaid "savings" in the state budget did not go far enough for New York Citys ax-wielding mayor; he urged Pataki to cut even deeper.
The budgets also target the disabled, the blind, the mentally ill, children and the aged: allocations for foster care are greatly reduced; school children will no longer get free subway rides to school; funding for child abuse prevention will be halved; aged and handicapped people on disability will be denied their cost-of-living adjustment and their home care will be severely restricted.
Education is another major target. Pataki proposes to freeze state aid to public schools at a time when the student population in New York City is growing by 20,000 a year. Summer school and extra-curricular enrichment programs will cease. The state and city university systems (SUNY and CUNY) are expected to lose a total of over 1,200 full-time faculty and more than 12,500 class sections, mostly in the arts and humanities. The SEEK program, which provides counseling and tutoring for disadvantaged university students, will be eliminated. Tuition at the senior colleges will jump from the current $2,450 to $3,450, an increase of 40 percent. Working-class, black and Hispanic students unable to come up with an extra $1,000 will be forced to drop out.
New Yorks already dilapidated public transportation system is also slated for the chop: many express bus lines will be discontinued; all-night service will be suspended on some subway lines; cleaning and repairs will be scaled back; token booths will be reduced and at least one station will be closed. And, of course, fares will be hiked.
Giuliani is demanding $600 million in wage concessions and "productivity" from the citys unions. In addition to the 12,000 jobs eliminated through last years severance package, he wants another 11,000 (supposedly through attrition). These job cuts and the anticipated layoffs in education and health care (the citys largest employer), will massively increase demands on the very social services that are being gutted.
The only part of city government that escaped Giulianis budget ax is the New York Police Department, which is getting an increase of $2.4 million. Pataki, who pushed through the death penalty bill, plans to save money by cramming two prisoners into state penitentiary cells built for one. Batons, bullets, prison cells and lethal injectionsthese are the answers of Pataki and Giuliani to the upsurge of "anti-social behavior" that will be the inevitable by-product of their regime of "fiscal responsibility."
Only by the Grace of Wall Street Shall Ye Live!
This ferocious assault on every vestige of civic decency in an already blighted city is conducted in the name of the almighty Budget Deficitthat rapacious deity who rages about the mists that envelop the top of the World Trade Towers, and must be placated from time to time with ever-greater sacrifices of human flesh. Politicians (when they are not invoking the Deity) often like to rationalize their attacks on poor and working people as necessary obedience to the automatic and insuperable laws of the marketplace. The general economic upturn in the rest of the country, we are told, has bypassed New York City, thereby creating a huge shortfall in expected tax receipts. Hence, the need to starve infants and grandmothers.
Yet New York has the greatest concentration of multi-billion-dollar corporations, banks and finance companies in the world. An analysis of census results conducted by the New York Times (25 December 1994) showed that in 1980 the median annual income of those in the richest fifth of the Manhattan population was a little more than 21 times that of the poorest fifth. By 1990, the gap had widened to 33 times. The Times concluded that the gap between rich and poor in the wealthiest city in the wealthiest country in the world is larger than in Guatemala. Within the U.S., the only county that has a wider gap is the site of a former leper colony in Hawaii, whose population consists of former colony members and rich people attracted by the scenery.
For Pataki and Giuliani, and the rest of the ruling class politicians, taking more money from corporations or the rich is as inconceivable as defying the law of gravity. In fact, they are doing just the opposite. One billion of the projected $5 billion state budget gap Pataki is trying to fill by slashing social services is the result of the regressive tax "reform" he is also pushing. Pataki wants to maintain the existing tax rate for those in the bottom bracket, while lowering taxes on the top bracket by 25 percent!
With one hand, Giuliani snatches subway tokens from grade-school children, while with the other he delivers fistfuls of lucre to downtown landlords in the form of a $234 million abatement on commercial rent and real estate taxesto help "revitalize" the Wall Street business district (New York Times, 16 December 1994). He plans to eliminate the 5 percent tax on hotel owners, and recently doled out $50 million in tax breaks to a single financial company, CS First Boston Corporation, to persuade them not to leave town (New York Times, 25 January). As Leona Helmsley, the billionaire real estate queen convicted of tax fraud, remarked several years ago, "only little people pay taxes." But on what eternal tablet is it written that budgets can only be balanced on the backs of students and union members, children in foster care and mothers on welfare?
Yet these starvation budgets, if not ordained by heaven, are not simply the result of corruption, malice or stupidity. The bare-knuckled tactics of the mayor and governor express the same logic that drives the International Monetary Fund and World Bank to demand sacrifices of the masses from Moscow to Mexico City. Simply stated, this logic decrees that individuals, communities and nations have a right to exist only in so far as their activity contributes to the profits of the tiny handful of capitalists that owns and controls the resources, corporations and financial assets of the global economy.
This logic operated in a somewhat more disguised fashion during the cold-war competition with "Communism." Then, the existence of a global non-capitalist rival compelled the Western regimes to provide some support for housing, health-care, the arts, education and the poor, in order to ensure social stability at home. Now, intensified inter-imperialist rivalries compel corporations to cut production costs through shrinking payrolls and investing in more advanced technology. Those firms that fail to keep pace go under.
To raise profit margins, the capitalists have intensified the pressure on workers lucky enough to have kept a job. Another method is to cut taxes and channel government expenditures on social services into direct and indirect corporate subsidies. Today the "welfare state" is a luxury that the ruling classes feel they neither need nor can afford (meager as its American version was). Profitability is fast becoming not merely the major criterion for public policy decisions, but the sole criterion. This could change if massive popular discontent threatens the security and legitimacy of the existing system of social privilege. FDRs celebrated "New Deal" in the 1930s was a conscious attempt by the more sophisticated wing of the capitalists to defuse the potential for mass radicalization created by the Great Depression.
These days, when city or state governments need to find funding for social services, they must borrow from Wall Street, which evaluates them according to their ability to make the payments. If public debt is high, the banks and bond holders demand higher rates of interest, thus compounding the growth of government indebtedness. In extreme cases they may refuse to lend at all. The big money men are interested in the balance sheet of expenditures vs. revenues and typically seek assurances that governments will not spend too much on "non-remunerative" items, especially poor people, whose human needs cannot easily be turned into cash.
Historically one major way for governments to fund social programs is through taxes on businesses and individuals that businesses employ. But the increased mobility of capital inclines companies to "vote with their feet" if wages or taxes in a given locality are too high. This generates pressure to ensure that the local economy remains "competitive," i.e., that taxes and wages are kept as low as possible. A "favorable investment climate" requires cutting all public expenditures that do not directly contribute to profit-making activity. Such "wasteful" allocations include not only those aimed at alleviating poverty, but also spending on parks, playgrounds, libraries, museums, education and the artseverything, in short, that tends to make urban life tolerable for most of the population.
In the months before the city budget was announced, Standard & Poors, the credit rating agency which grades city governments on their "fiscal health" for the benefit of prospective lenders, threatened to lower New Yorks credit rating. In addition, holders of long-term city bonds were talking about charging higher interest rates. Immediately after Giuliani unveiled his plans, however, the "financial community" gave him an approving pat on the head.
Alongside this city of seven million plus inhabitants, who breath air, drink water and eat food, there is another city, comprised not of flesh-and-blood human beings, but of stocks and bonds, T-bills and long-term securities, futures and derivatives, which breath profits, drink liquid assets, and eat interest premiums. The health and welfare of this second city is, moreover, in inverse proportion to that of the first. And it is this second citythe city of capitalthat forms the real constituency of the mayor, the governor, and all other elected officials in this country, Republican and Democratic, from the municipal level to Congress and the president.
Republicans and Democrats: Twin Parties of Capital
The direct domination of finance capital is nothing new to New York. In 1975, when investment houses refused to buy city bonds because they were considered too risky, the city was on the verge of declaring bankruptcy. After the federal government refused to bail the city out, this crisis led to the formation of the Municipal Assistance Corporation (MAC) under the aegis of the State of New York. This agency was replaced a few years later by an even more powerful outfit called the Emergency Financial Control Board (EFCB), an unelected corporate governing body, which kept a tight grip on municipal purse strings. Under this regime the portion of the city budget allocated to debt service increased dramatically as 60,000 city workers lost their jobs, while the wages of remaining city workers were frozen apart from an inadequate cost-of-living adjustment. The CUNY system, which had always prided itself on free higher education for those who could not afford private colleges, began to charge tuition. Giulianis budget is only a somewhat more radical application of the policies imposed upon this city by bankers, investment fund managers and bond holders for the past two decades, and pursued more or less continuously by the administrations of Beame, Koch and Dinkinsall Democrats.
The Republicans, it is true, are the more consistent and aggressive partisans of the mounting capitalist offensive. They seek to peddle the austerity measures of the ruling class by appealing to every prejudice and mean-spirited instinct of those who are relatively better off. With the aid of Rush Limbaugh and a host of lesser demagogues of the airwaves, they attempt to mobilize white males for the Republican Party by convincing them that their distress comes from having lost status in the 1960s and 70s to women and minorities. In a time of shrinking unions and falling wages, they offer what appears to many as the only realistic way to maintain present income levels: lowering taxes. This is why the Republicans outrageous tax give-aways to the rich must always be padded with some reductions for middle-income earners as well. But, most important, the Republicans, with the aid of a few well-understood code words ("crime," "welfare," "affirmative action," etc.), exploit white racismnow as ever in this country the trump card of rulers seeking to divert public attention from their own acts of piracy.
The Democrats, on the other hand, are less open about selling austerity to the masses, since they rely more heavily on the votes of the urban constituencies (blacks, Hispanics, unionized workers, etc.) who are the targets of such measures. They tend to be more squeamish and temporizing about administering the prescribed poison in the doses required. But they end up doing essentially the same things as the Republicans because, like the Republicans, they represent the bankers and corporate shareholders, to whom they must go cup in hand for campaign contributions. Their job is to convince the victims of capitalism that it is necessary to accept the logic of the bankers ledger. The deficit, and the need to balance it, have in their eyes the status of laws of nature. Their opposition to the Republican steamroller seldom goes beyond a few polite whimpers or snivelling appeals to "spread the pain" more evenly. The Democrats cannot and will not fight the Republicans because they worship at the same altar and feed at the same trough. This is why socialists have always bracketed them as the "twin parties" of big capital.
Union Misleaders: Labor Lieutenants of Capital
Those who think that "market forces" are simply too powerful to resist should take a closer look at what happened in France only last year. First, Air France workers struck and successfully beat back a government job-slashing scheme. This, in turn, inspired the students, hundreds of thousands of whom demonstrated against a government proposal to lower the minimum wage for youth. With the trade unions poised to enter the fray, the rightist government of Eduard Balladur was forced to back down. The lesson is clear: mass struggle can defeat capitalist austerity attacks. It happened in Paris, and it can happen here.
Yet the union bureaucrats have no appetite for launching any such struggle. These "labor statesmen" with their fat salaries, padded expense accounts and Democratic Party connectionsview the capitalists budget-cutting imperatives with religious reverence. They are jealous of their control and shun mass struggle while preaching reliance on the Democrats. They are, in the immortal phrase of the pioneer American socialist, Daniel DeLeon, the "labor lieutenants of capitalism."
Nearly thirty years ago, in a notable departure from the labor bureaucracys usual spinelessness, Michael Quill, head of the Transit Workers Union, told a judge who had just ordered New Yorks striking bus and subway workers back to their jobs to "drop dead in his black robes." Quill was jailed for contempt of courtbut the injunction was defeated and the strike was won.
Quills courageous stand contrasted sharply with the cowardly capitulation of the citys labor bureaucrats to the MAC in 1975. Victor Gotbaum, then head of AFSCME, the largest union of municipal workers, amicably negotiated away 60,000 jobs while $3 billion of the unions pension funds were invested in the MAC. Gotbaum became a personal friend of MAC chairman Felix Rohatyn, and Gotbaums son subsequently got a job at Rohatyns investment firm.
The present head of AFSCME, Stanley Hill, following the example of his predecessor, is trudging dutifully to Gracie Mansion to negotiate more givebacks. Hills reward was Giulianis endorsement of Democrat Mario Cuomos failed bid to be reelected governor. One close observer of city politics, Robert Fitch, reports:
"According to Queens Republican leader Fran Werner, it was no coincidence that the day after Giuliani announced for Cuomo, municipal labor announced they were giving Giuliani $200 million in the givebacks hed been demanding."
Then there are other champions of labor, like the former Teamster chief, Barry Feinstein, who, before stepping down last year amid accusations that he had misused $500,000 of his members money, commented that, "The New York City labor movement will never endorse a campaign to tax the rich." Sandra Feldman, head of the American Federation of Teachers, and an associate of the CIA-linked Social Democrats USA, remarked: "I dont see Mayor Giulianis effort to wrestle down bureaucracy and bloated government as an attack on the labor movement" (ibid).
The more "left-wing" union bureaucrats are little better. Jan Pierce, head of the northeast region of the Communications Workers of America, a former supporter of Jesse Jacksons Rainbow Coalition, "publicly urged unions to join with Giuliani in a campaign to identify waste and redundancy." Dennis Rivera, leader of hospital workers Local 1199, used his authority as a "militant" to get CUNY students to call off their 1991 sit-ins against Mario Cuomos tuition hikes. Rivera is chairman of the state Democratic Party, and, despite occasional posturing, has one basic answer to the Pataki/Giuliani offensive: vote Democrat. This is no answer, working people need a party of their own.
For a City-Wide General Strike!
In February the thousands of students who rallied on the Capitol steps in Albany to protest the CUNY cuts upset the pro-Democratic leaders of the march by sitting down and blocking traffic. On March 1, 30,000 hospital workers from Local 1199 demonstrated against the cuts in front of the Empire State Building. CUNY students are calling for a city-wide rally on March 23, under the slogan, "Shut the City Down!" We support this call, but students on their own cannot shut the city down, no matter how militant their protests. It is the organized labor movement, and particularly hospital, transit and other municipal workers, who have the power to bring the city to a halt.
Despite the flight of manufacturing jobs from the city over the past quarter century, 35 percent of the workforce in New York is unionized, the highest percentage in any city in the U.S. The membership of the city unions is heavily black and Hispanic, and would form a natural bridge to the communities that will be hurt the most by the proposed attacks.
Never in recent history have the interests of students, minorities and workers so clearly converged. A general strike could rally all the victims of the budget cuts, from Harlem, to Bedford Stuyvesant, to the South Bronx. It could unite welfare workers and welfare recipients, hospital workers and patients, subway workers and riders, teachers and students. United in action behind the organized labor movement, they could hand Giuliani, Pataki, and Wall Street a stinging defeat.
Union militants around the city should put forward motions in their locals calling for a united strike against the cuts. But the planning cannot be left to the bureaucrats who have already declared their intention to do nothing. Strike committees should be elected in every local union with a mandate to organize for an effective, city-wide strike. In building toward a general strike militant unionists would naturally seek to coordinate their efforts with organizations representing students, welfare recipients, black and Hispanic communities and all the other potential victims of the bankers budget.
Capital and Labor: Nothing In Common
Pataki/Giuliani budgets represent more than the benighted ideas of a few Republican Neanderthals. They embody, in the most concentrated form, the logic of the capitalist system. This is a logic that works to the detriment of the majority of people who live under capitalism, and which the majority therefore have no interest in obeying. If bank debt is draining public coffers, why not impose a moratorium on interest payments, or cancel the debt altogether? If banks and corporations register their disapproval by going on strike against the majority of societythe only answer is expropriation.
Such measures would never be contemplated by the governments of the rich and privileged. They could only be undertaken by a government responsible to those who work as opposed to those who live off interest and profit. Such a government must be prepared to expropriate the capitalists and ensure that the productive capacity of society is employed to benefit the whole of the population. This would signify a social revolution; it would require the dismantling of the capitalists armed guardians and the formation of a new social power, one committed to defending the interests of the exploited.
In todays political climate, when the forces of reaction seem to be so firmly in the saddle, this perspective may seem impractical or utopian. But the alternative is more of the same lethal substances now being prescribed by Pataki, Giuliani, Gingrich and their counterparts the world over. One must choose between the logic of capitalproduction for profitand the logic of socialismproduction for human need. In the epoch of capitalist decline there is no middle way.
Posted: 19 December 2004