Stimulus and struggle: Congress short-changes the working class

The amended version of the Biden administration’s stimulus plan was passed by the House of Representatives on March 10 — the last step before it goes to the president’s desk to be signed into law. It took over two months to approve the bill which, by any measure, does not meet the scale of the grave economic and public health crisis opened up by the COVID-19 pandemic. This is as clear a sign as ever of the complete bankruptcy of capitalism as a system. Even in its hour of greatest need, it cannot muster the political will to do anything more than prevent the most catastrophic collapse of living standards. 

The bill lives up to its name as a “relief” bill — but just that. For many it undoubtedly will help keep the wolves away from the door for a time. But it will not make any substantive changes to the functioning of capitalism, the cause of the current state of hardship, with its fundamental features so brutally revealed during the COVID-19 pandemic. 

The easiest way to view it is as one big stimulus check, split into different pieces, from which people will get varying amounts of money. Congress assumes this money will keep them surviving until the “inevitable” economic upturn once the country is vaccinated. 

The contradiction between the relative shallowness of government action and the desperate need for major relief reflects the biggest problem of all: Working and poor people are objects, rather than subjects, in this political process. 

What is in the bill?

It is clear that the relief package does not meet the scale of the social crisis we are in. 

There are 10 million fewer jobs than this time last year. Almost a full year from the the start of the current crisis, the job losses are worse than the worst similar period during the 2008 crisis. The labor force participation rate, a better measure of how many people are working, currently stands at 61 percent. That means basically only three of every five working-age adults are even in the workforce — working or actively looking for work. That is 4 percentage points lower than December 2009 during the depth of the last crisis. It is also the lowest since 1975, but in that period there were almost 10 percent fewer women in the workforce. The current crisis is, in other words, absolutely unparalleled in the modern era.

More than one-in-three adults are having trouble paying their basic expenses week-to-week and 40 percent of children are living in a household struggling to pay rent, put food on the table, or both. 

The relief bill addresses the crisis creating a combination of direct payments of up to $1,400 per person, and tax credits and subsidies for government programs and businesses. Assessing whether or not all this is “enough” is a challenge since the existence of so many various strata among working and poor people means the bill affects people in varied ways. The bill in its own way creates new forms of stratification among the working class, choosing “winners and losers” along fairly arbitrary lines. Forcing the country into a debate over what industries, strata and regions are more deserving or undeserving is of course a time-tested political strategy of the capitalist class, to obfuscate common class interests. 

The bill provides $350 billion to assist states and localities, to help prevent the most draconian of public sector layoffs. It provides $14 billion to prevent mass layoffs in the airline industry and crucially allows those workers to remain connected to their health insurance. It also provides $7 billion more to the paycheck protection program which will also keep many workers in their jobs. 

From that perspective, for many, the relief bill keeps the rug from being pulled out from under them for the next several months, and is certainly welcome. 

For those who already had that rug pulled out, it is a decidedly more mixed picture. 

For the unemployed, the relief bill extends the $300 “boost” to unemployment benefits through September. In the first stimulus, the CARES Act, this “boost” was set at $600, an amount selected to make sure any unemployed worker would be guaranteed 100 percent replacement of income. So, by definition, even with an extension at $300, the bill leaves many in a position of hardship. 

The reality is even more perverse. The vast majority of job losses have been among low-wage workers. This is also where the biggest jobs gains are coming from as states recklessly lift public health restrictions. The $300 number is explicitly calibrated so that the boosted unemployment benefits will not equal the new poverty wage jobs on offer. As Joe Manchin stated about increasing the unemployment boost: “It doesn’t incentivize people. It’d be awful for the doors to open up and there’s no one working.”

So, in other words, the unemployment benefit proposal is designed to drive as many people as possible off unemployment and into the lowest paying, most dangerous jobs as quickly as possible. Under the terms of unemployment insurance, a worker who turns down a job is disqualified from receiving a check — and there is no health exemption built into that.

The direct payments and tax credits are the real backbone of the legislation. But they too affect people differently. If you are single, been in-and-out of work and are living in a major city, the $1,400 check might not mean that much in the face of accumulated and future rent and utility bills, on top of everything else. Some families of three could get $5,700, which could make a much larger difference. How much help this relief bill offers all depends on how bad things have been for you. All the things that have been making life so hard — health-care costs, accumulating rent and utility debts, credit card debts, and so on — have not been canceled by the bill. 

The package tries to fill these holes in various ways. One is providing money directly to states to pay out assistance to cover rent and utility payments. As it concerns utilities, the bill lays out $4.5 billion for assistance, but the need has been calculated at $40 billion. It is a drop in the bucket. Somewhere between $20 to $40 billion seems to be the cumulative back-rent bills of the country. The relief package provides $25 billion. The relief package offers expanded subsidies for everyone making up to 400 percent of the poverty line when they buy health insurance in the Affordable Care Act exchanges. 

As a whole, clearly the relief package is not trying to resolve all the above problems but instead create a framework whereby enough people can cobble together a standard of living approximating their pre-pandemic “normal” however good or bad that may be. The bill makes no serious intrusion into the rules of the capitalist market, where all human needs are made into commodities to be bought and sold. It pumps money into that market.

Of Manchin and minimum wages

The stripping of the $15 an hour minimum wage from the relief package typifies the basic red line for the relief package: It must not make any structural changes to the pre-COVID status quo. The wage provisions certainly would have done that. With an average yearly benefit of just over $3,000, 32 million people would have received a raise. Further, eliminating the tipped-minimum wage would strike a serious blow to the exploitative practices of restaurants nationwide, especially the massive chains that specialize in low wages. 

The fact that there is a solid congressional majority in favor of poverty wages reflects that much more is happening than Joe Manchin’s intransigence. In recent polling 62 percent of people in “battleground districts,” including 59 percent in the districts won by Republicans, support raising the minimum wage to $15 an hour. So clearly no one was going to take a big hit with voters. The mobilization against the wage hike was carried out exclusively by business lobbies. The Chamber of Commerce, Business Roundtable, National Restaurant Association and other business lobbies openly spoke out against it. 

The Business Roundtable said that it would “undermine small business recovery.” The National Restaurant Association told Bloomberg it was the “opposite of relief” for their members since it cut into their profit margins. The Chamber told the press, “No, we don’t support a $15 minimum wage,” and peddled all sorts of bogus numbers about millions of job losses. 

The three most controversial issues then were: Whether a dent would be made to poverty wages, whether unemployment benefits would challenge the bosses paying poverty wages, and whether the amount of money people got through direct payments would be further limited. And on all three of those, poor and working people lost out. 

How the sausage is made 

The process reflects the ultimate issue with political representation. For instance, there is a strong case to be made that the $15 an hour minimum wage was included purely to be axed, a smokescreen or bargaining chip to cover the real negotiations. 

Despite including it in his legislation, Biden told CBS on Feb. 5 that he did not believe it actually would be ruled in-bounds by the parliamentarian. If he was that sure, weeks before she ruled, why would he ever have included it? Despite calling for the parliamentarian to be overridden, Rep. Alexandria Ocasio-Cortez told CNN before the ruling that she would still vote for an overall package as long as it was the parliamentarian who removed the wage provision, not Democratic leaders. 

Rep. Pramila Jayapal, Chair of the Congressional Progressive Caucus, released a statement on Feb. 25 saying the parliamentarian should be overruled. Then the next day she conceded to Politico it would not be in the package, and told the Wall Street Journal just a day after the Senate vote that the changes to the relief bill were ultimately “minor concessions.”

Senator Bernie Sanders immediately pivoted to a guaranteed-to-lose stand-alone amendment, and quietly dropped his proposal to tax billion dollar companies who did not raise the minimum wage. On March 1, it was reported that Senator Manchin had “received no pressure or lobbying” from the White House to support the minimum-wage provision. 

We do not know exactly what happened, but there is a strong smell of backroom cigar smoke. 

The furor over the minimum wage masked what was a pre-surrender by Congressional “progressives.” Rather than a straightforward presentation of the relationship of forces, our “progressives” expressed their rhetorical solidarity with popular movements but seem to have already decided to not use their leverage in the House to bring it about. 

From protest to power

Many working and poor people put up a valiant fight for $15 an hour, larger unemployment payments and more adequate direct payments. But they never really had a voice in the debate. Even the working class’ best “friends” in Congress were tied up in the deal making. 

The entire framing of the debate leaves the working class at the mercy of a framework pre-determined by the politicians: Bills and amendments written by them, and compromises negotiated based on their view of what is possible. Even the flow of information, the context and background of these “representatives’” decisions and deals, is largely hidden from view. So for the last two months most people have been left guessing and hoping. 

Working and poor people are manipulated for votes, but given no direct influence over the actual policies and strategies pursued by those they give them too. Even if millions of people wanted to, how would they exactly “force” the Congressional Progressive Caucus to leverage $15 an hour as a deal breaker for passage of the relief bill? By whom and how would such an effort be organized? 

It would require a new participatory framework for the political system as a whole and strong enough movements and working-class parties, which hold the “progressive” politicians directly accountable to their program. 

The relief bill clearly shows there is a class war going on. Even in the midst of the worst crisis since the Great Depression, the one issue on which the Senate cannot compromise at any cost is preventing a $15 an hour minimum wage. That is the nature of the spectacle of a Senate “working hard” to finalize a deal. It is a body of multi-millionaires, none of whom know what it is like to go hungry, working through the night to ensure the poverty wage economy is preserved.

A living wage, universal health care, a job and housing as a right, reparations, an end to police terror, and so much more — these demands require that working class and oppressed peoples seriously reorient away from those now in the halls of power, as we organize the fightback against the current social crisis. 

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