A compromise deal on debt and spending

What happened

Congress finally passed a bipartisan bill this week to raise the nation’s debt ceiling, staving off a disastrous government default and cutting $2.4 trillion of government spending. President Obama signed the Budget Control Act of 2011 after weeks of drawn-out negotiations with House Speaker John Boehner, whose Republican caucus refused to sanction further borrowing without significant spending cuts. The bill identified around $900 billion of cuts to government programs over 10 years, and called for the creation of a bipartisan “supercommittee” to trim $1.5 trillion more from the deficit over the same period. This 12-person panel, half Republicans and half Democrats, will make its recommendation by Thanksgiving. If Congress fails to endorse that plan before Dec. 23, the bill will trigger $1.2 trillion in cuts designed to be painful to both sides—including $500 billion from defense and a 2 percent cut to Medicare providers. The president hailed the deal as an “important first step” toward fiscal responsibility, but said that the “manufactured crisis” had damaged the U.S. economy.

Although the bill easily passed both chambers of Congress, it left lawmakers on both sides of the aisle deeply unhappy. Tea Party–endorsed Republicans complained that the bill does not slash spending deeply enough, while neoconservatives bristled over the projected cuts to defense spending. Democrats were angry that the deal contains no new taxes on the wealthy and exposes social programs to future cuts. “People on the right are upset. People on the left are upset. People in the middle are upset,” said Senate Majority Leader Harry Reid. “It was a compromise.”

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What the editorials said

Is this really the best we could do? said the Los Angeles Times. This deal doesn’t come close to solving the government’s fiscal woes, leaving both our costly benefits programs and our wasteful tax code untouched. Instead, it punts the crisis forward to a supercommittee that will no doubt indulge in yet more of the “dysfunctional squabbling” that got us into this mess in the first place. What a “shameful abdication of congressional responsibility.”

It’s not the deal anyone wanted, said The Boston Globe, but after weeks of deadlock, simply avoiding default seems like an achievement. And there are “some positive aspects” to the bill. The most serious cuts won’t kick in until after 2012, when the economy may be healthier, and they’re spread across federal programs to ensure no area suffers unduly. If the supercommittee can successfully craft a broader agreement, this could be “a step forward for the United States.”

What the columnists said

This battle is far from over, said Steve Benen in Washington Monthly. The Republicans have already made it clear that their supercommittee members will refuse any tax increases, a stance that is bound to embolden their Democratic counterparts to reject any cuts to Medicare or Social Security. “I hope folks are ready to live with those triggers included in the deal,” because the odds of a consensus are virtually nil.

Democrats might actually prefer it if the triggers were activated, said Nate Silver in The New York Times. The penalties set for non-agreement are “very heavily loaded with defense cuts,” and won’t materially affect entitlements. Democrats may consider that better than any deal they’re likely to negotiate. But slashing the Pentagon’s budget indiscriminately would be extremely dangerous, said Gary Schmitt and Thomas Donnelly in The Weekly Standard. The U.S. military faces damaging cuts already; ripping out $500 billion in one go could push it “over the cliff.”

Even if the supercommittee does agree on a deal, said Michael Tanner in National Review, the entitlement programs that are “driving this country toward insolvency” aren’t on the table. The debt will continue to grow faster than the U.S. economy unless we fix Medicare. Or unless we raise taxes, said Ezra Klein in The Washington Post. And Democrats have the power to do just that in 2012, when George W. Bush’s 2001 tax cuts expire. All they have to do is refuse to extend them unless the GOP agrees to reform the tax code. Then Democrats will “hold the hostage,” and it will be Republicans that are forced to compromise.