Monday, January 10, 2011

After taking millions of dollars from Unions Jerry Brown's budget sticks it to workers.

Millionaires row: LtoR, Brown Feinstein Newsome
Union leaders spent a lot of their members’ money getting Gerry Brown in to the governor’s seat in Sacramento. Today, Brown repaid the workers of California with a proposed budget that savages workers and the poor.

Brown, like all capitalist politicians, called on “all” Americans to do our bit. He asks for personal sacrifices from every citizen to fill an estimated a budget deficit hole of $25.4 billion over the next 18 months. Brown proposes $12.5 billion in spending cuts, including welfare, social services and higher education. K-12 will only be spared if we vote to extend for 5 years, sales, vehicle and income taxes that were supposed to be temporary but we know never are. Brown threatens deeper cuts if we don’t vote to raise our own taxes, and that schools could be “hard hit.”.

Brown also intends to cut state workers pay, those not covered by Union contracts, by 8% to 10%. Cutting Medi-Cal, the state's health insurance program which is somewhat of a lifeline for the poor will cause increased misery for those that need help the most. Doctors' visits would be capped at 10 per year, a $5 office co-payment and a $50 emergency room co-payment will be also added.

I have not studied Brown’s 84.6 billion budget proposals in detail by any means but I didn’t recall a mention of taxing oil extraction. We don’t have to accept their “facts” or the choices they present to us.

The Money is There
California is the only state in the nation I think that doesn’t tax oil as it comes out of the ground. Also, taxes are much lower today for the wealthy than they were during the 50’s and 60’s. The top marginal rate back then was 90% for those with incomes over $400,000, today it is about 35%. And the interest on California’s debt is not on the table. It is written in to the California constitution that interest on debt must be paid above all else. I wonder who put that in there.

California is also home to 95 Billionaires out of 946 total worldwide, according to the Forbes 2007 Index of World Billionaires. The state is also home to many millionaires. Los Angeles County had 268,136 millionaire households as of 2006, the largest number of millionaires among the counties in the U.S. and 23 % of the total for the state. Orange County had 116,157 millionaire households and San Diego 102,138. Santa Clara County has 74,824 millionaires.We have more pieces on where the money is here.

There was all this talk today from politicians and Union leaders alike about how we are one nation and how violence must be condemned. Well, Browns budget is a heavy dose of violence. This is the man the leaders of my former Union spent millions of dollars urging me to vote for. We are in a war and, as Warren Buffet reminded us, his group, the capitalist class, are winning it. We have to begin by rejecting their facts, rejecting their view of reality. What is realistic for them is not realistic for us. Those billionaires didn’t work for that money they stole it off the backs of workers and the middle class and we need to go after it.

“My job is to find some common core here that we can agree on," Brown says. "I'm just going to lay out the facts. Whatever they decide, obviously will be the will." That’s nice. But the choices are limited; the facts are not my facts. They are the chosen facts of Brown and his masters on Wall Street and in the boardrooms of the major corporations.. The Union leaders give members the same type of choice at contract time, wage and benefit cuts or no job at all. When the members choose the former the Union leaders are off the hook, the democratic process has worked, the members have spoken and choose to lower their standard of living.

California’s State Treasurer, Bill Lockyer, another Democrat and darling of the liberals issued his statement in support of Brown’s savage attack on workers and the poor. “The Governor’s proposal is realistic and provocative,” he says adding that, “a balanced remedy of spending reductions and revenues is the best cure.” He also makes it clear who the budget is designed to please when he adds, “To prevent further damage to the State’s credit rating and start restoring California’s reputation, action by the Legislature and Governor must be timely and credible. It’s time narrow interests took a back seat to California’s interests.” Have to keep the moneylenders happy, some "balance".

California has two million workers organized in Unions and millions more who are unorganized. We must build a movement of resistance in our workplaces and our communities and schools; we can shut down the California economy that is 12% of US GDP. We have the power to drive back this assault on our living standards if we do not limit ourselves to a view of the world designed on Wall Street and if we build our own independent political force rather than relying on Democrats.

One way or another, the US capitalist class is generating a major confrontation with the workers of America in the period ahead. Better we prepare for it.

1 comment:

Jack said...

Not only did union leaders throw money and time behind Jerry Brown's campaign for governor, but now many of them are endorsing Brown's savage austerity budget.

The 340,000-member California Teachers Association (CTA) is one of the largest unions in California and, potentially, one of the most powerful forces in the state. What does CTA have to say about this budget that hits hard at all working and poor people, and especially hard at those who are worst off? CTA leadership is asking its 800-member State Council to endorse and campaign for Brown's package of vicious cuts and regressive taxes. CTA President David Sanchez says, "For the first time in seven years, we have a governor's package that includes revenues to help solve the state's $25 billion deficit." Sure. By extending Schwarzenegger's regressive taxes for another 5 years; by lopping $1.7 billion from MediCal; by cutting CalWORKS (welfare-to-work) by $1.5 billion; by decimating higher education with $1.4 billion in cuts; etc.

CTA's Sanchez isn't alone. SEIU Local 1000 President Yvonne Walker appeared on radio last week to announce her support for Brown's budget. When the stunned radio host asked her why, Walker replied, "I like its balance. It doesn't cut from just one area." (!!)

The labor bureaucrats, like the politicians in Sacramento and Washington, say that "There Is No Alternative" to making the working class pay for the huge deficits created by the $4.7-trillion bailout of Wall Street ($2 trillion of which is still unpaid) and the mega-trillion in cumulative spending on the war machine. But there are very clear alternatives:

First, increase taxes on the wealthy to increase state revenue by $14 billion. The highest-earning one percent of Californians have an average income of $1.8 million per year (sources: Institute for Taxation and Economic Policy; California Budget Project). If these high-rollers paid on average $50,000 more in income tax, the state would take in an additional $7.6 billion. The next highest-earning 4 percent of Californians earn an average of $310,000 / year. Increasing their taxes by $10,000 would bring in another $6.1 billion.

Second, amend Proposition 13 to increase taxes on corporate property but not on homeowners. This would raise more than $5 billion / year.

Third, impose a tax on oil extraction to bring in $1.5 billion / year more. (Every other oil-producing state has an oil extraction tax).

Finally, close the tax loopholes that allow more than half of California corporations to pay no tax at all.

(And of course, beyond California, labor ought to be taking the lead in organizing national protests -- including work stoppages and other job actions -- to demand that the $2 trillion in bailout money still owed by the big banks be repaid immediately and used to restore and expand essential public programs and create jobs.)

This kind of program won't win without a fight. But it's something labor ought to be fighting for. Instead, Sanchez, Walker, et al. try to convince us that not only do we need to accept the cuts, we have to enthusiastically praise Jerry Brown and the other politicians who do their best to pump up corporate profits and private wealth at our expense.