No Cuts! Tax the Rich!

By MARK VORPAHL | CounterPunch | March 5, 2013

It’s no secret that most cities, counties, states and school districts in the U.S. are facing big deficits. What is less understood is the extent to which austerity cuts have become politicians’ bi-partisan response to the situation. The dramatic measures being implemented in Portland, Oregon are no exception.

By “austerity” is meant a bag of policies intent on “reforming,” that is, reducing spending by cutting jobs and public services, tearing up social contracts that workers have benefited from, and, in general, making workers and the poor do all the sacrificing to close budgetary imbalances. These austerity measures range from potential cuts to Social Security and Medicare to cuts on a local level that go after our schools, social services, parks, and infrastructure.

While this “sacrificing” is imposed on the vast majority of citizens, obscenely low tax rates for big business and the wealthy are being left in place as their profits swell and their dominance over the political system increases. To appreciate the scope of this trend, one need merely note The New York Times report that there are “nearly $1.1 trillion in annual deductions, credits and other tax breaks that flow disproportionately to the highest income Americans and that cost more, each year, than Medicare and Medicaid combined.”

The Case in Portland

Portland’s newly elected Democratic Mayor Charlie Hales has announced that there is a $25 – $40 million hole in the city’s budget. In response, he is demanding that all 27 city bureaus submit budget proposals with 10 percent cuts. This latest round follows several consecutive years of budget cuts.

The cuts already put into effect have resulted in lost jobs, underfunded services and a decline in Portland’s livability. While it is not clear yet how Hales will wield his cleaver, he is signaling that his cuts will be the deepest yet. The programs that he has already targeted — at-risk teen summer internships, job-training efforts and youth bus passes, among others — will have an immediate impact on great numbers of households, shifting the costs of these publicly funded programs onto the shoulders of families that can least take the burden.

The majority of Portland’s residents can ill afford the costs of trying to close the deficit without damaging the regional economy further. Portland’s unemployment rate is 7.9 percent. According to the Business Journal, 8.3 percent of Portland families live below the poverty level; for families with children the number is 12.9 percent, and 27.4 percent for single, divorced and separated women. If he gets his way, Mayor Hales’ austerity axe will continue to swing at the city’s most vulnerable citizens.

Portland’s top companies make hundreds of millions, if not billions, every year. In Oregon the share of total state income collected by the wealthiest 1 percent increased by 70 percent from 1979 to 2009. In contrast, during that same period, the bottom 80 percent of Oregonians saw their income decline.

In 2009 the highest effective state tax rate for corporations with profits over $10 million was less than 1 percent. For a middle income Oregon household, the average effective rate of payment was 4.1 percent.

If corporations paid the same rate of state and city income taxes that is expected of most citizens, there would be no deficit, no crisis, no need for cuts. Given the vast amount of untouched revenue tucked away in these corporate coffers, Hales’ call for public “sacrifice” to balance the city’s budget amounts to a shell game to distract people from asking, “Where is the money?”

Portland is not broke. The problem is that those with the money are being let off the hook.

Special Arrangements

In addition, Portland’s city budget is far from transparent. It is divided into a General Fund, which is where the so-called deficit is located, as well as Internal Service Funds (ISF). ISFs are unrestricted net assets of the city. They can be used for any purpose. The amount of money in this part of the budget has been steadily increasing. In 2010-2011, the ISF balance was $120.6 million.

But rather than using this money to benefit Portland’s working class communities, the City Council keeps it stashed away for pet projects to lure wealthy investors to the city. Since the ISF lacks transparency and accountability, it is difficult to determine how the money in these funds is used; we only know that it isn’t available when the tax paying public needs it.

Another way Portland’s politicians stash away huge sums to benefit big business is through the use of Urban Renewal (UR). UR requires that money be spent on development projects in a certain area. The revenue created by this development, including property taxes, remains locked up in the area for decades — from 20 to 50 years.

UR taxes in 2010-2011 amounted to $35 million for the city of Portland alone. These funds can only be spent in the UR areas from which they were collected. Consequently, while the posh UR area of Portland’s Pearl District enjoys more public funds than it needs, elsewhere in Portland school closures are looming, streets remain unpaved and infrastructure and park maintenance is done on the cheap, if at all.

Put simply, UR is a means of enriching developers and other corporate interests — like big contributors to politicians’ campaign funds — to the detriment of Portland’s working class communities. The fact that this model, which results in widening inequality, continues to be pursued by those advocating cuts to public programs could not make more clear where these politicians’ allegiances lie.

While Mayor Hales is blaming the city’s deficit on several factors, the math does not add up. When low corporate tax rates, the millions kept in shady city funds, and the revenue drain of development programs such as UR are taken into account, it becomes clear that Portland’s deficit hawks are manufacturing a crisis in order to continue arrangements where workers are left to pay for big business’ greed.

Our Priorities, Our Budget

In addition to the “I feel your pain” displays by Mayor Hales towards those affected by his cuts, he will also employ the tactic of divide and conquer. Those threatened by these cuts will be told the lie that raising revenue by taxing big business and the wealthy is off the table. “The pie is only so big,” promoters of the cuts moan, “you must decide your own priorities.” And in this way they hope to set different communities and unions against one another.

It should be clear, for reasons already discussed, how false this storyline is. While there is likely more than a little padding in upper management that can be cut, and plenty of taxes that remain uncollected, the truth is that a real solution to Portland’s deficit won’t emerge until these priorities are confronted and turned around.

What would a budget that prioritizes peoples’ needs look like? Rather than job cutting, it would fund job creation. Instead of slashing social programs, it would build a thriving and accountable public sector. And corporate interests would take second place behind the health of working class communities. A people’s budget could easily be funded if the 1 percent paid their fair share in taxes and were not given the driver’s seat in determining Portland’s development and political policies.

To change business as usual in Portland will require mobilizing an independent grassroots social force to oppose Hales’ cuts and the corporate interests behind them. It will take a unified Labor and community movement capable of expanding its goals towards winning a people’s budget.

The demands to unite such a movement must be those that the greatest numbers are willing to mobilize behind. “No Cuts! Tax the Rich!” would be a good place to start. While each union and community group has its own priorities, highlighting those which build the broadest unity in mass campaigns and rallies is the best way to bring these organizations’ specific concerns and struggles to the greatest number.

With his austerity cuts, Mayor Hales has issued a challenge to the grassroots. A unified fightback is necessary to meet it. With such a movement it will be possible to shift the political dialogue towards measures that serve the vast majority of citizens. Without it, Portland will be left with Hales’ cuts and worse.

At the same time, a big fight is gearing up as Oregon’s democratic governor has threatened cuts to public workers’ jobs and retirement benefits, on the tail of passing emergency legislation to lock in Nike’s absurdly low tax rate for 30 years. In building a citywide response, Labor and community groups will be strengthening their capacity to take on austerity at a statewide level as well.

Every city, county and statewide struggle against the corporate austerity attacks can set an example for and strengthen our ability to resist cuts to Medicare, Social Security and other socially needed federal programs. From this resistance a movement can develop with the ability not only to resist attacks — but to fight for and implement policies that benefit all working people.

Mark Vorpahl is a union steward, social justice activist and a writer for Workers Action and Occupy.com. He can be reached at Portland@workerscompass.org

Greek metro workers defy court order to return to work

Press TV – January 22, 2013

Greek metro workers have defied a court order to return to work and have staged the sixth day of strikes over the government’s spending cuts.

Athens was without a metro service on Tuesday for four to five hours, which comes in continuation to the protest started on Thursday over the planned cuts to metro workers’ salaries.

A Greek court ruled against Athens Metro Workers’ Union’s planned strikes and permitted the government to use force to make personnel return to work.

Union officials call on the government to abolish the planned changes to the public sector’s pay scales, which comes as Athens implements measures to satisfy its eurozone creditors.

Reductions in public sector workers’ incomes have made it harder for Greeks to make ends meet.

“With these latest cuts, someone like me who earned 1,300 euros per month will end up clearing something like 700 euros,” Metro Workers’ Union Head Antonis Stamatopoulos said.

“We cannot live on what we earn,” he added.

Stamatopoulos said that apart from stopping the changes to the pay cuts, the only way the government could make them return to work would be through force.

“Civil mobilization? They can enforce it if they want. Maybe they should come here with tanks to force us back to work,” Stamatopoulos said.

Parliament introduced new austerity measures in December 2012, which eurozone finance ministers approved for bailout packages of 9.2 billion euros on Monday and 34.3 billion euros last month.

Europe plunged into financial crisis in early 2008. The worsening debt crisis has forced the EU governments to adopt harsh austerity measures and tough economic reforms, which have triggered massive protests in many European countries.

Police attack Portuguese people protesting austerity measures

A policeman strikes a photojournalist of AFP during the Portuguese general strike in Lisbon March 22, 2012.

Press TV – March 22, 2012

Portuguese police have attacked demonstrators protesting nationwide against the government’s austerity measures.

Demonstrations were held on Thursday in 38 cities and towns across Portugal, including the capital city of Lisbon, Oporto – the second largest city after Lisbon — and Coimbra, AFP reported.

In Lisbon, police resorted to baton charge and arrests to disperse the protesters.

At least one demonstrator was arrested in Oporto as protesters expressed outrage at Prime Minister Pedro Passos Coelho during a visit to the northern city’s university.

The nationwide protests were part of a 24-hour strike against austerity measures adopted by the government in return for an international bailout. During the Thursday strike which was led by Portugal’s biggest union — the General Confederation of Portuguese Workers (CGTP) – public services across the country ground to a halt.

The trains and subways in Lisbon and Oporto, and the majority of ports, including the port of Lisbon and Viana do Castelo in the north, were shut down.

The strike is aimed at opposing changes to labor laws that make it easier to fire workers, reduce holidays and cut layoff compensation. The government argues that these changes will revive the economy.

Some European economies have introduced strict austerity plans to tackle their debt crises. The spending cuts have caused deep discontent among people in those countries.

Angel Gurria, secretary general of the Organization for Economic Cooperation and Development, said in a Thursday interview that the eurozone needs a bailout fund of at least 1 trillion euros ($1.3 trillion) to prevent its debt crisis from expanding to other European states.

Greece’s unions to hold two-day strike over cuts

Press TV – February 9, 2012

Greece’s two largest unions have announced a 48-hour strike over the new austerity measures endorsed by the government in return for bailout loans.

The unions, General confederation of Workers of Greece (GSEE) and Civil Servants Supreme Administrative Council (ADEDY), announced on Thursday that their members will go on a two-day strike from Friday in protest at the controversial decision.

“We will hold a general strike on Friday and Saturday along with the civil servants’ union,” said a spokeswoman with GSEE which represents the private sector.

ADEDY’s Secretary General Ilias Iliopoulos described the measures as “painful” which will “create misery for youths, unemployed and pensioners do not leave us much room.”

“We are moving to a social uprising,” said Iliopoulos.

Greece has been the scene of repeated strikes since the country first resorted to bailouts from international lenders in 2010.

Leaders of the three parties backing Greece’s coalition government approved new austerity measures on Wednesday but failed to agree to creditors’ demands to make 300 million euros ($398 million) in pension cuts.

The country’s Prime Minister Lucas Papademos still hopes that the coalition leaders will strike a comprehensive deal by Thursday evening, his office said on Wednesday.

To secure a bailout package of 130 billion euros, Athens must first persuade the troika — the European Union (EU), International Monetary Fund (IMF), and the European Central Bank (ECB) — that it will implement long-delayed reforms and make further spending cuts.

Greece’s current debt stands at 340 billion euros ($440 billion) — a sum that equals around 31,000 euros debt per person in the country of 11 million people.

The country has, accordingly, the biggest debt burden in proportion to the size of its economy in the entire 17-nation eurozone.