Upon further review, we’ve determined that the deal isn’t really much of a deal

Well, everything turned out just swell after all the drama over the debt ceiling debate, didn’t it?  I mean, so long as you don’t mind that:

–the sorry spectacle of the political fight led one rating agency to drop America’s debt rating a notch below AAA anyway: it doesn’t doubt that the U.S. can pay its debts, but feels the political stalemate raised questions about the government’s willingness to pay its debts, and so lowered the rating as a warning to investors;

–the deal doesn’t actually reduce the nation’s debt, it just lowers the rate at which it is rising; and

–taking the nation’s financial health hostage in a political negotiation was shown to be an effective tactic, so we can expect to see it used again in the future.

Among the lessons learned:

–the deal assumes the elimination of the so-called Bush tax cuts at the end of 2012, meaning Republicans gave up the very thing they fought so hard for a year ago.

Plucking flaccid compromise from obstinacy should not be mistaken for victory, just as the smell emanating from Washington after this deal shouldn’t be mistaken for success.

82% of Americans are unhappy (disgusted?) with the performance of Congress on the debt issue, nearly half are unhappy with the president’s handling of the situation, and 40% view the Tea Party unfavorably.

More than four out of five people surveyed said that the recent debt-ceiling debate was more about gaining political advantage than about doing what is best for the country. Nearly three-quarters said that the debate had harmed the image of the United States in the world.

–the political system in Washington, D.C. is becoming more and more unproductive, and may not be able to help us with anything.

The president has tried reasonableness and he has failed. It has been astonishing to watch Obama’s sheer unwillingness to give up on his opponents after their refusal to work with him on the stimulus package, health care reform, or the extension of the Bush tax cuts last fall. A Congress dominated by mindless cannibals is now feasting on a supine president. But surely even he now realizes there’s no middle ground with antagonists whose only interest is in seeing him humiliated.

More real fun is going to come later in the year when a new federal fiscal commission tries to come up with a plan to solve the federal government’s money problems.  If it’s anything like the most recent such commissions, it will find that cutting the budget just can’t produce enough savings to right the ship and it will also look for equitable ways to increase revenue.  It could start by checking this week’s local paper: Ezra Klein outlines a plan for Democrats to boost revenue by negotiating like Republicans, and Charles Krauthammer offers a very rational outline for reforming and simplifying taxes so our representatives in Washington could have a fresh starting point on the coming negotiations on tax rates and entitlement reforms…and they are coming.

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Pas de trois, denouement, house lights up

With fewer than 12 hours to spare (a lifetime, apparently, in the ways of Washington) the president has signed into law the combination debt ceiling increase/spending-and-deficit reduction compromise approved by both houses of Congress.  There, now don’t you feel much better about everything?  I mean, it only took a few months of bluster and pontificating, and a little threat to keep the nation from paying its bills on time, to get our government to pass a simple debt ceiling increase and take a small step in the direction of fiscal responsibility.

The last act of this tired drama was predictable: the loudest of the antagonists made a great flowery show of establishing their innate human goodness while talking past one another directly to those in the wings who were already persuaded of the rightness of their case…they executed the thrust and parry of choreographed stage fights which held no real threat of damage since the outcomes were predetermined…when time wound down minor characters took center stage to deliver the resolution then ceded the spotlight once again to the stars, who declaimed the lessons of the play and bid us all a good night.

Now the treasury has cash to pay the bills, and Congress is faced with continuing negotiations to find ways to cut spending and/or increase revenue (I’m hoping for the “and”) to get the government closer to living within its means.  They got there by compromising, which means no one is happy with the product:

Some in both houses are unhappy that there were no tax increases to spread the pain; some are unhappy there weren’t even more cuts to get closer to a final solution in one fell swoop; Democrats are unhappy that GOP priorities suffered few hits (but pleased that the cuts are not as severe as in earlier proposal by Rep. Paul Ryan); Republicans are unhappy about potential cuts to the Pentagon budget if future negotiations are not successful; and Tea Partiers are unhappy because there are no significant spending cuts right now and promised future cuts are contingent on the approval of future Congresses.

The proponents of restraint in government spending should see this as a great victory for their cause: it’s not everything they wanted all at once, but they got the president and Congressional Democrats to give more than would have been considered realistic just a few months ago.  That many of them do not—that they feel any compromise was an unforgiveable moral failure—is cause for concern, and the proponents of responsible behavior by grown adults in elected positions of responsibility should see this as a nightmarish premonition of things to come, if not in the budget talks later this year than the next time a debt ceiling needs to be increased.

Now, for those who have the stomach for it, we face the prospect of watching a new select committee of members from both houses and both parties work to find ways to reduce the deficit, and watching both houses debate and vote on a balanced budget amendment—all by end of the year!

How will cuts in federal government spending impact an economy still struggling to recover from recession and build new jobs?  Can we do something about overhauling tax code and/or entitlements, the real answers to a healthier federal budget?  I’m much less concerned right now with who won or lost the latest political fight than I am with a more pertinent matter: how does this deal help the country?