The best that can be said about the flawed compromise to raise the debt ceiling is that it averts immediate financial disaster and restores modest credibility for the nation in the eyes of the rest of the world. The last-minute agreement tilts too far toward spending cuts, delays tough choices and offers no prospect of investment to create jobs and stimulate the stalled economy. Yet there was little hope of something better from this divided Congress, and at least now there is a framework for a more rational discussion about reducing the federal deficit and setting spending priorities.
The depressing scenes from Washington as today's deadline to raise the debt ceiling drew near underscore how the tea party extremists have hijacked the Republican Party. They undermined House Speaker John Boehner, leaving him the weakest leader in the capital, and they refused to negotiate in good faith. Too many of the most conservative House Republicans have been willing to let the nation default on its obligations to score political points and starve the government. When so many are determined to drive the country off the cliff, it's difficult to steer the debate back toward the middle ground.
In fact, the compromise approved by the House on Monday falls well to the right. It includes no guarantees of new revenues — no changes to the Bush-era tax cuts, no end to tax breaks for wealthy investment bankers, no end to subsidies for oil companies or agriculture. It forces more than $900 billion in cuts to discretionary spending, with at least another $1.2 trillion in additional cuts in a clumsy second step. It requires a vote on a balanced budget amendment, although thankfully not a guarantee that it pass. Still, Republican conservatives such as Sen. Marco Rubio and Reps. Connie Mack of Fort Myers, Dennis Ross of Lakeland and Steve Southerland of Panama City say it is not enough.
With some justification, liberal Democrats are just as unhappy with President Barack Obama, who should sign the legislation into law today after it passes the Senate. This is not the president's finest hour, and he should have been more engaged and pushed for action on the debt ceiling months ago. But the agreement does start reducing the deficit, and it ensures that the nation will not endure another fight over raising the debt ceiling before 2013. Most intriguing is the creation of a bipartisan congressional committee that would draw up a $1.5 trillion deficit reduction plan by Thanksgiving that Congress would vote up or down by Christmas.
With Congress paralyzed, a bipartisan committee — with the right mix of thoughtful members — may be the best hope for a more balanced approach to deficit reduction. The triggers in automatic spending cuts if that approach fails are designed to be too deep for Democrats (domestic spending) and Republicans (defense spending) to stomach. Social Security, Medicaid and Medicare benefits are protected from the automatic cuts, but the committee could stake out some policy positions in more thoughtful ways than the full Congress has been able to manage. Off to the side are the Bush-era tax cuts, which are scheduled to expire at the end of next year. That could give Obama leverage in influencing the bipartisan committee to include new revenue in their proposal.
Over the decades, Congress routinely raised the debt ceiling regardless of which political party was in the majority. Republican conservatives succeeded this time in turning a perfunctory vote into a divisive debate over reducing the deficit, triggering a manufactured economic crisis. The result is a compromise that leaves no one satisfied — but at least avoids a meltdown that would do serious harm to the nation.