The Iraq Study Group (ISG) report, released Wednesday, underscores the immensity of the crisis not only of the Bush administration, but the American political establishment as a whole. Both the content of the report and the extraordinary attention given to it by the media demonstrate that the US debacle in Iraq has produced a crisis of historic dimensions within the United States itself.

The report paints an unrelentingly dismal picture of the conditions that exist in Iraq. Its executive summary begins: “The situation in Iraq is grave and deteriorating.” The report goes on to warn that American influence is waning and that “time is running out.”

Contrary to White House claims of “progress” towards “success,” the US-installed regime in Baghdad is disintegrating. Sectarian conflicts between Sunnis and Shiites are escalating and “could trigger the collapse of Iraq’s government and a humanitarian catastrophe,” the report warns.

The US military occupation faces rapidly increasing popular opposition, with armed attacks averaging 180 a day in October 2006, up from 70 a day in January 2006. (Underscoring the escalating violence, ten US soldiers were killed Wednesday, the day the report was released, bringing the total to 2,918 since the US invaded Iraq in March 2003.)

The ISG report admits that the anti-American insurgency is overwhelmingly homegrown and Iraqi: “It benefits from the participants’ detailed knowledge of Iraq’s infrastructure, and arms and financing are supplied primarily from within Iraq. The insurgents have different goals, although nearly all oppose the presence of US forces in Iraq.” Al Qaeda terrorists account for only “a small portion of the violence in Iraq.”

The conditions of life for the Iraqi people are horrific. According to the report: “The Iraqi government is not effectively providing its people with basic services: electricity, drinking water, sewage, health care, and education. In many sectors, production is below or hovers around prewar levels.” The report attributes this failure to violence, corruption, sectarian conflict, inherited economic weakness from the period of the US blockade of Iraq, and the collapse of the courts, the financial system, and other civil institutions.

Fleeing these conditions, up to 1.8 million Iraqis have taken refuge in neighboring states, while 1.6 million are displaced within the country, the report notes, although it is silent on the Iraqi death toll, estimated last month at 655,000 in a study conducted by the Johns Hopkins University school of public health.

The cost to the United States has also been colossal: nearly 3,000 dead among the soldiers, approaching 20,000 wounded, many of them seriously maimed or psychologically traumatized, and more than $400 billion squandered in the attempt to turn Iraq into a US protectorate.

The members of the panel repeatedly expressed concern that the debacle in Iraq was destabilizing the United States politically, fueling antiwar sentiments directed against the Bush administration and increasingly against the ruling elite as a whole.

“Continued problems in Iraq could lead to greater polarization within the United States,” the report states. “Sixty-six percent of Americans disapprove of the government’s handling of the war, and more than 60 percent feel that there is no clear plan for moving forward. The November elections were largely viewed as a referendum on the progress in Iraq.”

Democratic Party members of the ISG laid particular stress on the domestic impact of the war. At a press conference after the report’s release, and in subsequent media interviews, the Democratic co-chairman, former congressman Lee Hamilton, declared that the United States was facing a challenge to its political stability comparable to the divisions over Vietnam in the 1960s and early 1970s, and even to the American Civil War.

Divisions over the war—above all the division between the political establishment in Washington and the mass of the American people—have reached the point where the country could soon become ungovernable, he warned. To forestall such an outcome, said Hamilton, echoed by the other Democrats and Republicans on the panel, it was necessary to achieve a bipartisan consensus on Iraq and abandon the go-it-alone stance of the Bush administration.

The panel members are clearly concerned that without some dramatic change—or at least the appearance of change—the deep-seated but largely latent opposition to the war within the United States could emerge explosively in a politically radicalized form, as it did during the Vietnam War.

Such a development today would have even more far-reaching consequences within the US and worldwide, because the social and economic tensions within America are far more advanced, and the position of the United States in the world economy is far more precarious than in the 1960s. There are already signs of an unraveling of the US financial system in the sharp fall in home prices, housing starts and durable goods orders, and the skyrocketing of personal bankruptcies and home foreclosures. The dramatic fall of the dollar on world currency markets is a telling indicator of US economic crisis and global financial instability.

The report’s grim assessment of the situation in Iraq and the dire implications for American imperialism both abroad and at home confirms the prognosis for the US invasion of Iraq made by the World Socialist Web Site and the Socialist Equality Party within hours of the American attack. On March 21, 2003, the WSWS published a statement by David North, chairman of the WSWS editorial board and national secretary of the SEP, which declared:

“Whatever the outcome of the initial stages of the conflict that has begun, American imperialism has a rendezvous with disaster. It cannot conquer the world. It cannot reimpose colonial shackles upon the masses of the Middle East. It will not find through the medium of war a viable solution to its internal maladies. Rather, the unforeseen difficulties and mounting resistance engendered by war will intensify all of the internal contradictions of American society.”

The ISG report proposes a series of tactical initiatives to be taken up by the White House and Congress in an effort to salvage something for American imperialism from the failure of its military adventure in Iraq. These measures are largely of a political and diplomatic character: opening talks with Syria and Iran, the two neighboring countries with the greatest influence in Iraq; renewed diplomacy in the Palestinian-Israeli conflict; and pressure on the various ethnic and sectarian-based political groups in Iraq to achieve “national reconciliation.”

The Bush administration’s emphasis on a purely military solution, the axis of its efforts over the past four years, is explicitly rejected. “There is no action the American military can take that, by itself, can bring about success in Iraq,” the report declares, opposing any substantial increase in the US military presence.

On the contrary, the Iraq Study Group calls for a reduction in the US military role, with the removal of most combat troops by 2008. At the same time it calls for an increase in the number of US troops involved in training Iraqi forces and the maintenance indefinitely of tens of thousands of American soldiers in the country.

The panel concluded that most front-line combat forces should be gradually removed from Iraq because “a continuing Iraqi commitment of American ground forces at present levels will leave no reserve available to meet other contingencies.”

The United States should, the report states, “provide additional political, economic and military support for Afghanistan, including resources that might become available as combat forces are moved from Iraq.” In addition to Afghanistan, US troops could be required “for other security contingencies, including those related to Iran and North Korea.”

The report makes no assessment of the causes or responsibility for this catastrophe. The ten members of the Iraq Study Group, five Democrats and five Republicans, all veterans of decades of service to the American state, big business and the two-party system, deliberately refrained from any such analysis, which would point to the chief decision-makers in the Bush administration.

Instead, the panel whitewashes the war-makers, declaring, “We agree with the goal of US policy in Iraq, as stated by the president,” adding that “Iraq is vital to regional and even global stability, and is critical to US interests.”

It is noteworthy, however, that the ISG makes no reference to any of the reasons actually given by the Bush administration in the run-up to the war. There is no mention in the report of weapons of mass destruction, no mention of the “war on terror,” and only one reference to democracy (in contrast to dozens of invocations of “stability” as a goal of US policy).

The report does, however, acknowledge that one of the central US interests is Iraq’s oil industry, to which it devotes an entire section, including recommendations that “the US government should provide technical assistance to the Iraqi government to prepare a draft oil law that ... creates a fiscal and legal framework for investment.”

A further recommendation is: “The United States should encourage investment in Iraq’s oil sector by the international community and by international energy companies. The United States should assist Iraqi leaders to reorganize the national oil industry as a commercial enterprise” —i.e., the privatization and the sell-off of Iraq’s vast oil reserves, the second largest in the world, for the benefit of the multinational companies.

There is a final recommendation to include the cost of the Iraq war in the annual budget, beginning with the upcoming fiscal year, for which Bush must submit a proposal by early February. “Costs for the war in Iraq should be included in the President’s annual budget request, starting in FY2008: the war is in its fourth year, and the normal budget process should not be circumvented,” the report declares.

Despite language urging Congress to carry out “its constitutional responsibility” to oversee expenditures, this recommendation has nothing to do with restraining unchecked executive power. The Bush administration has used the emergency appropriation process for spending on the wars in Iraq and Afghanistan to avoid having to demand cuts in domestic spending that would be directly linked to the cost of the war. The proposal from the ISG would lead to immediate and drastic cuts in spending on social needs.

The release of the ISG report produced a noncommittal response from the White House, with Bush promising to review the recommendations and reply in a matter of weeks. There were bitter denunciations from the most ardent proponents of military escalation in Iraq, such as Republican Senator John McCain and Democratic Senator Joseph Lieberman.

The congressional Democratic leadership generally hailed the report, and its release was followed within hours by a 95-2 vote on the floor of the Senate to approve the nomination of former CIA Director Robert Gates as secretary of defense, replacing Donald Rumsfeld. The vote came only a day after Gates publicly rejected any significant withdrawal of US forces in Iraq in testimony before the Senate Armed Service Committee. (The two “no” votes came from right-wing Republicans who opposed Gates because he has in the past supported direct talks between the US and Iran).

The Democratic embrace of a report calling for the indefinite continuation of the US military occupation of Iraq demonstrates the party’s contempt for the millions who expressed their opposition to the war with their votes on November 7. It underscores once again that the Democratic Party is a party of the US ruling elite, committed to the defense of the interests of American imperialism.

Protest and pressure on the Democratic Party cannot transform this instrument of big business into a vehicle of opposition to the war in Iraq. The struggle against imperialist war requires the building of an independent political movement of the working people that is opposed to the American financial aristocracy and both of its parties.

The Socialist Equality Party is the only party which fights to build a mass movement of the working class against the existing political and social system. We demand the immediate withdrawal of all American and other foreign military forces from Iraq and Afghanistan, and the repudiation of the entire premise of US foreign policy: defending the global profit interests of US corporations.

We further demand measures to hold criminally accountable all those responsible for the historic crimes committed against the Iraqi people in the illegal US invasion and occupation, including Bush, Cheney, Rumsfeld, Rice and the rest of the administration war cabal, as well their accomplices within the leadership of the Democratic Party and the media conglomerates that functioned as outlets for the government’s propaganda and lies.