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Working In These Times

Thursday, Jan 31, 2013, 4:40 pm

Labor Takes Hard Line Against Social Security and Medicare Cuts

BY Kari Lydersen

Chicago Federation of Labor president Jorge Ramirez was joined by community and political leaders on a National Day of Action to fight budget cuts. (Photo by Orlando Velez, CFL)  

CHICAGOWorkers and labor leaders around the country rallied on Wednesday to demand that Congress “Protect Our Future” in negotiations around the national debt and deficit. With deep cuts to Medicaid, Medicare and Social Security still on the table, the AFL-CIO is continuing a series of National Days of Action to argue that such cuts will hurt vulnerable Americans in the short term and the national economy in the long run.

At a press conference at the Chicago Federation of Labor headquarters, a number of Illinois politicians and labor leaders took a firm stance against any defunding whatsoever of Medicaid, Medicare or Social Security.

U.S. Rep. Jan Schakowsky (D-Ill.) stressed that Social Security in particular should not be targeted, since it is a separate fund and doesn’t contribute to the deficit. Schakowsky noted that in Illinois, the average yearly Social Security payout is $14,000, and one-third of recipients rely on Social Security for 90 percent of their annual income. In contrast, she noted, the majority of CEOs who have signed on to the high-profile “Fix the Debt” campaigna purportedly non-partisan but primarily conservative coalition advocating cutshave accumulated an average $9 million in retirement funds.

Schakowsky also cited findings that 39 of the companies behind “Fix the Debt” do not have sufficient assets to cover their pension obligations to employees. In other words, they have gotten themselves into the same situation as the Social Security system they decry.

On the issue of Medicare, Schakowsky called for saving money by letting the program negotiate with drug companies for cheaper rates; currently, that is not allowed.  

Several speakers brought up alternate ways of addressing the deficit, such as the longtime progressive demand that offshore business profits for U.S. companies be taxed at the same rate as in-country profits. AFL-CIO National Policy Director Damon Silvers noted that simply closing the loophole that rewards companies for offshoring, forcing them to pay the same tax rates as domestic operationswould generate $583 billion. That would be almost half the amount need to close the $1.2 trillion deficit.

U.S. Rep. Bill Foster (D-Ill.) noted that President Obama’s administration is being made to deal with the results of Bush-era spending on two wars and policy changes that meant big profits for drug companies at the expense of Medicare.

AFL-CIO Illinois president Michael Carrigan said that the push for draconian spending cuts is driven by “Teabaggers who continue their stonewalling and reckless crusade to hold the economy hostage.”

William McNary, director of Citizen Action Illinois, called for more investments in railroads, highways and other infrastructure that can create jobs, helping reduce the national debt in the longer term. He stressed that “budgets are moral documents” and that seemingly abstract negotiations “are about real people who will suffer real pain.”

“This is about the single mom who has two jobs, or the kids starting their first jobs, the unemployed who have no job, senior citizens who paid into Social Security and Medicare their whole lives,” McNary said.

Katie Jordan is treasurer of the Alliance for Retired Americans, which represents 200,000 seniors in Illinois. She said seniors rely on Social Security for “groceries, housing, gas, basic needs,” and that the alliance will “insist Congress keep their hands off America’s retirement.”

Silvers said that organized labor’s position on the negotiations boils down to two demands. The first is no cuts to Social Security, Medicaid or Medicare, including de facto cuts made through a chained CPI. The second is that to the extent spending cuts are part of deficit reduction, they be balanced appropriately with generating new revenue from corporations and the wealthy.

“How ridiculous is it that we’re having to sit here and protect Medicaid and Medicare and Social Security,” Ramirez told Working In These Times after the press conference. “Our greatest generation is getting ready to retire, and we’re preparing to strip it all away.”

“I would be amazed if anyone could make a creditable argument that Medicare and Medicaid don’t work,” he continued, adding that “the parts that don’t work” can be attributed to changes during the Bush administration. He said that cutting these programs would mean greater costs to taxpayers overall, as people without adequate healthcare coverage would forgo preventive care and end up in emergency rooms.

“People aren’t going to be able to go out and get a new job because they have a prescription to fill,” he said. “They’re just not going to fill it."

Another National Day of Action is scheduled for February  8.

Kari Lydersen, an In These Times contributing editor, is a Chicago-based journalist and instructor who currently works at Northwestern University. Her work has appeared in the New York Times, the Washington Post, the Chicago Reader and The Progressive, among other publications. Her most recent book is Mayor 1%: Rahm Emanuel and the Rise of Chicago's 99 Percent. She is also the co-author of Shoot an Iraqi: Art, Life and Resistance Under the Gun and the author of Revolt on Goose Island: The Chicago Factory Takeover, and What it Says About the Economic Crisis. Look for an updated reissue of Revolt on Goose Island in 2014. In 2011, she was awarded a Studs Terkel Community Media Award for her work. She can be reached at kari.lydersen@gmail.com.

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