Obama’s victory: the hypocrisy machine begins to pay off (for the rich)

After election, Obama moves to slash social spending
By Andre Damon, wsws.org

In the wake of Barack Obama’s victory in the 2012 US presidential election, Democratic-party officials have proclaimed their intent to collaborate with Republicans to slash billions of dollars in social spending.

In his victory speech, Obama made clear his priorities in the aftermath of the election, saying that “in the coming weeks and months, I am looking forward to reaching out and working with leaders of both parties to meet the challenges we can only solve together. Reducing our deficit. Reforming our tax code. Fixing our immigration system…”

In the midst of the worst economic crisis since the Great Depression, the president said nothing about poverty, mass unemployment or any of the other social ills afflicting tens of millions of Americans.

Obama’s rush to slash spending comes despite the sentiments expressed in the election itself, where Obama, the candidate generally portrayed in the media as favoring social spending, won over the Republican Romney, who was viewed by millions of working people as a proponent of deeper spending cuts and an enemy of social programs.

The drive to cut spending likewise conflicted with the desires of voters themselves: according to exit polls, only ten percent said that the deficit was the most important issue facing the country.

In the coming weeks, the White House will seek to cut a deal on spending cuts and tax cuts intended to avert the so-called fiscal cliff, which involves the simultaneous expiration of all Bush-era tax cuts, the temporary payroll-tax cut agreed to by the Obama administration and congressional Republicans two years ago, and across-the-board cuts to military and social spending of nearly ten percent.

In the place of these measures, triggered January 1 or soon afterwards, Obama and the Republicans are seeking to work out a deal that would make even sharper cuts in social entitlements like Medicare, Medicaid, and Social Security while raising taxes on working people and cutting them for corporations and the rich.

Obama has proposed to cut nearly $4 trillion from the deficit over ten years. This would include $320 billion from the long-standing entitlement programs, Medicare and Medicaid, which provide health care to seniors and the poor respectively. But the deal that is likely to be worked out between Congress and the White House will likely entail even sharper cuts to key social programs.

Wall Street sent its own message to the re-elected president with a post-election selloff that sent the S&P 500 down by 2.3 percent Tuesday. The banks and major corporate CEOs have been clamoring for the US to announce cuts to social programs, and ratings agencies have threatened to downgrade the country’s debt rating unless a deal is worked out.

In a press conference Wednesday, the Democratic Senate Majority Leader Harry Reid repeatedly stressed his intention to collaborate with the Republicans, saying, “It is better to work together… Everything doesn’t have to be a fight—that’s the way it’s been the last couple of years.”

The day after the Democrats expanded their majority in the Senate, Reid said, “I’m willing to negotiate any time on any issue,” and added, “I’m going to do everything in my power to be conciliatory.”

Reid made it clear he intends to cut social spending as soon as possible, saying, “I am not for kicking the can down the road. Waiting for a month, six weeks, six months, that is not going to solve the problem.”

The Democrats’ determination to slash social spending is exemplified by ongoing speculation in the press that Erskine Bowles, the co-chair of the National Commission of Fiscal Responsibility and Reform—better known as the Simpson-Bowles Commission, which proposed trillions of dollars in spending cuts—will be nominated for the position of Treasury Secretary, being vacated by Timothy Geithner.

Even before Election Day, Obama made clear his determination to slash billions of dollars in social spending. “There’s no doubt that our first order of business is going to be to get our deficits and debt under control,” he told MSNBC. “We’ve already made a trillion dollars worth of cuts. We can do some more cuts. We can look at how we deal with the health care costs in particular under Medicaid and Medicare in a serious way, but we are also going to need some revenue.”

Obama’s statement came after 80 CEOs of major US companies, including Steve Ballmer of Microsoft, Lloyd Blankfein of Goldman Sachs, Jeffrey Immelt of General Electric and Jamie Dimon of JPMorgan Chase, sent a letter to the president and his Republican challenger urging them to proceed with budget slashing and tax “reform,” i.e., lowering taxes for the rich and raising them for everyone else.

The program of the corporate executives is essentially identical to that proposed by Obama and conforms to the proposals for over $4 trillion in austerity and tax “reform” advanced by the bipartisan Simpson-Bowles commission.
On Tuesday evening, House Speaker John Boehner (R-Ohio) declared, “the American people have also made clear that there is no mandate for raising tax rates.”

But by Wednesday afternoon, the top congressional Republican made it clear that the Republicans would be willing to consider raising revenues by closing “tax loopholes”, provided that this does not mean “higher tax rates on small businesses,” a code phrase for opposing taxes on the rich and corporations.

“For purposes of forging a bipartisan agreement that begins to solve the problem, we’re willing to accept new revenue, under the right conditions,” Boehner said.

These “conditions” would be an increase in effective tax rates paid by the working class through the elimination of tax credits and deductions that generally benefit middle and low-income families. At the same time, the Republicans have adamantly opposed the slightest tax increase on the rich.

The Democrats have publicly supported a marginal increase in taxes for those making over $250,000 as a political fig leaf for an historic attack on entitlement spending. The expiration of the Bush-era tax cuts for the rich—which would be more than offset by a tax “reform” agreement to lower taxes on corporations and wealthy individuals—would be presented as “equal sacrifice” as the administration slashed trillions from programs that have extended life expectancy in the US.

For his part, the Republican House leader said, “If there is a mandate in yesterday’s results, it is a mandate for us to find a way to work together on solutions to the challenges we face together as a nation.”

But even as Boehner stated, “We’re closer than many think to the critical mass needed legislatively to get tax reform done,” he added that “a grand bargain” may have to wait until the new year. In his speech Wednesday afternoon, Boehner stated that, “What we can do … is avert the cliff in a manner that serves as a down payment on—and a catalyst for—major solutions, enacted in 2013, that begin to solve the problem.”

Among the main goals of Obama and the Republicans is to close a deal that would prevent any cuts to military spending from the scheduled sequestration, which under the terms of legislation passed in August 2011 would slash the military budget by nearly ten percent.

The effort to prevent any cuts to military spending came as US allies in the conflict with Syria moved to escalate the drive towards war “within hours” of Obama’s reelection, according to a report by the Associated Press. Anticipating “a new, bolder approach from the American president,” the AP reported, Britain announced it will begin discussions directly with anti-Assad forces, while Turkey announced that NATO members were discussing the deployment of US-supplied Patriot missiles to enforce a “safe zone” inside Syria.

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Obama wins reelection

Many who voted for Obama did so to keep Romney and the Republicans out, not because they were enthusiastic about a second Obama term.

By Patrick Martin
7 November 2012

With polls closed throughout the continental United States, President Barack Obama won reelection by a comfortable margin in the Electoral College, while pulling ahead in the popular vote after midnight, as returns began coming in from the West Coast.

Republican Mitt Romney called Obama to concede just before 1 a.m., then made a televised concession statement to an audience of supporters at his Boston headquarters. He declared the election over and called for bipartisan collaboration with the new administration.

This was aimed at reassuring Wall Street and global financial markets that there would be no political vacuum as after the disputed 2000 election, and that both big business parties would move quickly to slash the federal deficit.

Obama’s victory speech, delivered just before 2 a.m., sounded the same themes. He downplayed any mandate from his election victory, speaking instead of “difficult compromises” that lay ahead.

He pledged to “sit down with Governor Romney to talk about where we can work together.”

“I am looking forward to reaching out and working with the leaders of both parties to reduce the deficit and reform the tax system,” Obama declared, adding, “You voted for action, not politics as usual.” This should be understood as a pledge that the reelected president will move rapidly to reach a budget deal with congressional Republicans, in line with the demands of Wall Street.

Obama will repay those who turned out to vote for him by carrying out measures that will devastate their jobs, living standards and social conditions. The “grand bargain” that he has pledged to negotiate with the Republicans will come at the expense of the working class, through trillions in cuts to Social Security, Medicare, Medicaid and other social programs.

Obama also hailed the US military, mentioning specifically the special forces troops who killed Osama bin Laden, while claiming that his administration was “bringing war to an end.” This was a reference to Afghanistan, but US troops will remain there in force for years to come, while those who are moved out will be redeployed for intervention in Syria, Iran or other targets of imperialist military attack.

All of the major television networks projected Obama victories in key battleground states between 11 p.m. and midnight, including New Hampshire, Ohio, Wisconsin, Iowa, Colorado and Nevada. Obama also had clear but narrow leads in Florida and Virginia, and both states were projected Wednesday morning as likely victories for the Democratic candidate. Romney won only one of the most closely contested states, North Carolina.

Obama had 303 electoral votes to Romney’s 206 electoral votes, more than the 270 required for victory. He was likely to win the 29 electoral votes in Florida, but these would not affect the outcome of the contest for the presidency.

While Republican campaign aides and right-wing media pundits had suggested that Romney might make a late breakthrough in Pennsylvania, Michigan or Minnesota, or all three, Obama won these states by sizeable margins. In the end, Romney was able to win only two more states than the 2008 Republican candidate, John McCain—Indiana and North Carolina.

Obama swept the heavily populated Northeast states, from Maine to Maryland, and all of the states of the industrial Midwest except Indiana, as well as the West Coast, including California, the most populous state. Romney carried most of the South and the thinly populated plains states, while splitting the Rocky Mountain states.

The vote is an expression of deep popular hostility to both the social layer personified by ex-Bain Capital CEO Romney, i.e., the financial parasites responsible for the 2008 crash and the subsequent economic slump, and to the ultra-right politics of the Republican Party. It also shows there are remaining illusions within the working class that Obama, despite his record over the past four years, represents an alternative to Romney and the financial elite, although popular support for Obama has diminished significantly since 2008.

Many who voted for Obama did so to keep Romney and the Republicans out, not because they were enthusiastic about a second Obama term.

An NBC exit poll gave a glimpse of these popular sentiments, showing that a sizeable majority of those interviewed, 54 percent, believe the US economic system favors the wealthy rather than being fair to all. Fifty-two percent said Romney would favor the wealthy, while 35 percent said that he would favor the middle class and 2 percent said he would favor the poor. The same question about Obama elicited a much different response: only 10 percent said Obama would favor the rich, 43 percent said he would favor the middle class, and 31 percent said he would favor the poor.

The results of the November 6 vote underscored the chasm between the portrayal of the American political landscape by the media and the political establishment—including the Democratic Party—and the actual sentiments of the population. The vastly inflated presentation of the popularity and strength of the Republican right was punctured by the defeat of Tea Party-backed candidates in major races. In the so-called battleground states, Romney underperformed.

The Republicans suffered a debacle in the US Senate, where they had expected to make significant gains, given that the Democrats had to defend 23 of the 33 seats at stake. Instead, the Democrats actually increased their margin.

Democratic candidates (in the case of Maine, an independent candidate allied with the Democrats) won nearly all of the close contests, capturing Republican-held seats in Massachusetts, Maine, and Indiana, while defending Democratic-held seats in Connecticut, Virginia, Florida, Pennsylvania, Ohio, Missouri, Wisconsin, North Dakota, Montana and New Mexico.

The results in Missouri and Indiana were particularly striking, as Republicans backed by the Tea Party won bitterly contested primaries, then lost general election campaigns the Republicans were heavily favored to win.

It is more clear than ever that the Tea Party was created by sections of the media and corporate elite in the aftermath of the Republican collapse in 2008 as an instrument to push through far-right policies and shift the official political spectrum further to the right. Despite the enormous publicity given this right-wing grouping, it has negligible popular support.

The actual views of the Tea Party—anti-immigrant chauvinism, militarism, the elimination of government social programs, the removal of all regulations on business interests—are repugnant to the vast majority of the population.

Exit polls showed, for example, that 65 percent of those voting in 2012 favored granting legal status to undocumented immigrant workers, while only 28 percent favored mass deportations.

The Democrats will, as always, interpret their own victory in the most restrained and conservative terms. The last thing they want is a mandate to oppose the plutocracy, since they serve the same corporate interests. They will extend the olive branch to the Republicans, allowing the Republican-controlled House of Representatives to set the agenda in Washington, as it has for the past two years.

The result of the contests for the 435 seats in the House showed virtually no change, with Democrats winning back some seats they had lost in 2010, particularly in the northeast, Illinois, Florida and California, but losing seats elsewhere in the South and scattered across the Midwest, for a net gain of a handful of seats, far short of the 25 required to win control.

The Obama White House made virtually no effort to elect a Democratic-controlled House, with the president providing a recorded phone call offering his personal support to only one Democratic congressional candidate.

The reaction of spokesmen for the two parties demonstrated the continued aggressiveness of the Republican right, despite the presidential defeat, and the undiminished desire of the Democrats to accommodate the Republicans. House Speaker John Boehner, the top Republican in Washington, declared that the election was “no mandate for raising taxes.” Julian Castro, chosen by Obama as the keynote speaker at the Democratic convention, said the election was “a mandate for compromise.”

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