Amy Goodman on the link between debt and war

War, Debt and the President

August 3, 2011

President Barack Obama touted his debt ceiling deal Tuesday, saying, “We can’t balance the budget on the backs of the very people who have borne the biggest brunt of this recession.” Yet that is what he and his coterie of Wall Street advisers have done.

In the affairs of nations, Alexander Hamilton wrote in January 1790, “loans in times of public danger, especially from foreign war, are found an indispensable resource.” It was his first report as secretary of the treasury to the new Congress of the United States. The country had borrowed to fight the Revolutionary War, and Hamilton proposed a system of public debt to pay those loans.“President Obama’s debt ceiling deal is widely considered a historic defeat for progressives, a successful attack on the New Deal and Great Society achievements of the past century.” (photo: U.S. Army / Staff Sgt. Brendan Stephens)

The history of the U.S. national debt is inexorably tied to its many wars. The resolution this week of the so-called debt ceiling crisis is no different. Not only did a compliant Congress agree to fund President George W. Bush’s wars in Iraq and Afghanistan with emergency appropriations; it did so with borrowed money, raising the debt ceiling 10 times since 2001 without quibbling.

So how did the Pentagon fare in the current budget battle? It looks like it did fine. Not to be confused with the soldiers and veterans who have fought these wars.

“This year is the 50th anniversary of [Dwight] Eisenhower’s military-industrial complex speech,” William Hartung of the Center for International Policy told me while the Senate assembled to vote on the debt ceiling bill. Speaking of the late general turned Republican U.S. president, Hartung said: “He talked about the need for a balanced economy, for a healthy population. Essentially, he’s to the left of Barack Obama on these issues.”

Michael Hudson, president of the Institute for the Study of Long-Term Economic Trends, explained the history of the debt ceiling’s connection to war:

“It was put in in 1917 during World War I, and the idea was to prevent President Wilson from committing even more American troops and money to war. In every country of Europe—England, France—the parliamentary control over the budget was introduced to stop ambitious kings or rulers from waging wars. So the whole purpose was to limit a government’s ability to run into debt for war, because that was the only reason that governments ran into debt.”

The Budget Control Act of 2011 assures drastic cuts to the U.S. social safety net. Congress will appoint a committee of 12, dubbed the “Super Congress,” evenly split between Republicans and Democrats, to identify $1.2 trillion in cuts by Thanksgiving. If the committee fails to meet that goal, sweeping, mandatory, across-the-board cuts are mandated. Social services would get cut, but so would the Pentagon.

Or would it? The Congressional Black Caucus and the Congressional Progressive Caucus opposed the bill. Congressional Black Caucus Chair Emanuel Cleaver called it “a sugarcoated Satan sandwich.” For fiscal years 2012 and 2013, the discretionary funding approved is split between “security” and “nonsecurity” categories. “Nonsecurity” categories like food programs, housing, Medicare and Medicaid (the basis of any genuine national security) will most likely be cut. But the “security” budget will get hit equally hard, which Democrats suggest would be an incentive for Republicans to cooperate with the process.

The security category includes “Department of Defense, the Department of Homeland Security, the Department of Veterans Affairs, the National Nuclear Security Administration, the intelligence community [and] international affairs.” This sets up a dynamic where hawks will be trying to cut as much as possible from the State Department’s diplomatic corps, and foreign aid, in order to favor their patrons at the Pentagon and in the weapons industry.

Hartung explained that the contractors, in addition to having the support of Speaker of the House John Boehner, “had Buck McKeon, the head of the House Armed Services Committee, whose biggest contributor is Lockheed Martin, who’s got big military facilities in his district, [and] Randy Forbes, whose district is near the Newport News Shipbuilding complex, which builds attack submarines and aircraft carriers. They used their influence to get people on the inside, their allies in the House, to push their agenda.”

President Obama’s debt ceiling deal is widely considered a historic defeat for progressives, a successful attack on the New Deal and Great Society achievements of the past century. Congresswoman Donna Edwards, D-Md., summed up the disappointment, in which half the Democrats in the House voted against their president, tweeting: “Nada from million/billionaires; corp tax loopholes aplenty; only sacrifice from the poor/middle class? Shared sacrifice, balance? Really?”

The Project on Government Oversight says of the “Super Congress” that “the creation of the committee doesn’t come with many requirements for transparency.” Who will be the watchdog? With the 2012 election coming up, promising to be the most expensive ever, expect the committee’s deficit-reduction proposal, due by Thanksgiving and subject to an up-or-down vote, to have very little to give thanks for.

Denis Moynihan contributed research to this column.