US: Minnesota “State Shutdown” Ends in Rotten Compromise

Toward a new, winning strategy

The longest state shutdown in US history appears set to end in a rotten compromise. Democratic Governor Mark Dayton, elected on a promise to raise taxes on the richest Minnesotans, completely caved to the Republican “no new taxes” position, and appears set to sign-off on massive budget cuts impacting workers, youth, and the poor.

Final negotiations are still in progress, and further conflicts can’t be ruled out, but the deal announced Thursday night clearly indicates the outline of how this political crisis will end.

Was this defeat inevitable, given Republican majorities in the legislature and their apparent intransigence? From the beginning of the budget debate, Socialist Alternative argued that if the unions initiated a bold campaign of mass grassroots resistance around a “No Cuts, No Concessions” program, cuts were not inevitable. But we also predicted that without mass struggle, the Democrats would inevitably cave into corporate austerity demands.

“Hitting kids where the bruises don’t show”

From the beginning, Democratic Party tops accepted that massive budget cuts were “inevitable” to close the $5 billion deficit. Dayton’s proposal to raise $1.4 billion through tax increases on the rich would still have meant $3.6 billion in cuts.

It took over two weeks of workers suffering under a state shutdown for the Democrats to agree to the same ultimatum Republicans were offering on June 30, before the shutdown. Now the $1.4 billion will instead be raised by “deferring” $700 million in payments to K-12 schools and borrowing $700 million from the states tobacco settlement fund. The only serious concession Dayton appears to have secured from Republicans is the removal of a wish-list of unrelated right-wing add-ons to the budget bill.

Combined with similar “deferments” of funds to public education in the last two budgets, this accounting trick means schools will receive only 60 percent of their promised state funds, forcing them to raid reserves and borrow to stay afloat. "It’s like hitting kids in places where the bruises don’t show," said Charlie Kyte, executive director of the Minnesota Association of School Administrators (Startribune.com, 7/9/11).

Forcing school districts to borrow millions only adds to already colossal local government debt to the big bond holders and banks. Minnesota tax-payers already give these billionaire speculators tens of millions in interest payments each year while the speculators turn around and lobby for more tax breaks and budget cuts!

This new borrowing will just be added onto the budget deficit next year which could be even larger given growing signs of another global economic downturn. "The law says it has to be paid back, but the question is when?" asked Rep. Mindy Greiling, Democratic lead on the House Education Finance Committee, referring to the deferments to education funding. "In the next century?" (Startribune.com, 7/9/11).

This same concern about the incapacity of the state government to ever repay their debts to schools, local government, and the big bondholders is why Fitch Ratings, one of the top three rating agencies, downgraded Minnesota’s credit rating last week. “A lower credit rating will make it more expensive for the state to borrow money, and could also increase borrowing costs for cities, counties and school districts” (Startribune.com, 7/7/11).

Dayton and the Democratic Party leaders are making the case that they did all within their power to stop the Republican assault. Their “solution” will be to urge us to patiently wait until the 2012 election and then vote to give them back a majority. Of course, the next time the Democrats do come to power, does anybody seriously expect them to reverse the terrible cuts now being agreed?

To counter the Democratic Party’s argument, which has in various ways been made since the beginning of the budget debate, it is worth reprinting below substantial portions of the brochure Socialist Alternative distributed widely at various anti-cuts rallies and protests in Minnesota since May.

Excerpt from Socialist Alternative’s anti-cuts brochure, May 2011:

Is it strategic to accept “some cuts”?

Unfortunately, the leaders of most unions and community groups accept the inevitability of cuts, urging support for Dayton’s proposal [for some cuts, some new taxes] as the best we can hope for. This supposedly “strategic approach” has meant each “interest group” holding its own tiny protests and lobbies. Accepting “some cuts” reduces us to competing over dwindling crumbs and plays into the classic divide-and-rule strategy of big business.

Illustrating the problem, Patti Cullen, President of Care Providers of Minnesota, responded to Dayton’s proposed cuts to elderly care programs by lamenting: “There are more seniors that are going to be served than school-aged kids… Aren’t we a valuable investment? Aren’t seniors just as important as kids?"

Accepting “some cuts” means pitting seniors against kids, bus riders against bus drivers, students against university workers and rural against urban. Unless working people across Minnesota can unite to organize mutual solidarity against all cuts, while demanding that the rich, big business, and bankers pay for the crisis they created, we will remain the playthings of corporate politicians from both parties.

Are the Democrats our ally?

While Dayton and Democratic Party leaders give lip-service to our interests, in practice they (alongside the Republicans) put the interests of their corporate sponsors before working people. To secure our votes the DFL positions itself as the “lesser evil,” especially when they are a minority. But when the Democratic Party is in power they pursue an essentially big business policy.

In Massachusetts, where Democrats control all branches of government, they just passed a bill that would make Scott Walker proud, banning unions from negotiating health care benefits. In Illinois, Democrats passed a bill stripping teachers of seniority and tenure, while all but banning strikes in Chicago. In Washington State the Democrats proposed an all-cuts budget. In Oregon the Democratic governor favors 20% across-the-board cuts. In California and New York, Democrats are also proposing historic budget cuts.

From the federal to local level, virtually everywhere the Democrats are in power they are pursuing vicious budget cuts, attacking unions, and giving more tax breaks than tax increases to the rich and corporations.

Toward a new, winning strategy

Most union and social movement leaders cling to the Democrats, echoing their policies and handing over ever larger campaign contributions, desperate to compete with corporate campaign coffers. The logic of this lesser evil strategy means accepting that cuts are inevitable, which in turn leads to competition over crumbs.

No sustainable mass united movement against the cuts is possible on this basis. To achieve that, the movement must take seriously the classic slogan – “An injury to one is an injury to all!” And that means organizing solidarity against all budget cuts – no matter which party is doing the cutting!

A debate over the failed lesser-evil strategy is opening up. The International Association of Fire Fighters announced it was suspending all contributions to Democrats in federal races. “We’re tired that our friends have not been willing to stand up and fight back on our behalf with the same ferocity, the same commitment that our enemies have in trying to destroy our members’ rights,” explained Harold A. Schaitberger, the firefighters president.

This is a step in the right direction, but must be combined with coordinated mass protests and direct action, uniting the broadest possible numbers. This is the lesson from the experience of Wisconsin, where continuous mass protests and the occupation of the Capitol derailed – at least temporarily – Governor Walker’s union-busting bill.

We need to create broad anti-cuts coalitions to involve all individuals and organizations ready to join the struggle on a simple “no cuts” program. The unions need to take a lead role due to their power and the numbers they can mobilize.

Political independence

Finally, we cannot leave politics to the two corporate parties. Mass protests can have an impact, but unless workers are organized to contest the two corporate parties’ control of government, big business domination will continue. Anti-cuts coalitions should discuss running independent anti-cuts candidates in 2011 and 2012, challenging both corporate parties.

We need to run independent candidates from our movement who will not water down our demands, not bow down to corporate interests and not get sucked into the Democratic Party machine. Ultimately, we need to build a new independent political party that refuses donations from corporations and bases itself on the mass mobilization of workers, women, people of color, and youth. Capitalism faces a deep structural crisis, and across the globe virtually all political parties that support capitalism are carrying out a program of severe austerity, budget cuts, and union-busting. We need to build a powerful political alternative to big business, armed with socialist policies that can defend our living standards and public services in the coming years.

• Stop all budget cuts and layoffs! Organize mass protests, occupations, direct actions, and coordinated strike action to end business as usual.

• Tax big corporations and the super-rich! Workers and youth shouldn’t have to pay for an economic crisis that the banks created.

• End the wars in Iraq, Afghanistan, Libya and beyond! Money for jobs and education, not war!

• Organize broad anti-cuts coalitions and run independent anti-cuts candidates to challenge the two corporate parties.

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