The Washington Post
Finally, President Joe Biden and House Speaker Kevin McCarthy, R-Calif., have reached a deal to avert an embarrassing — and potentially disastrous — U.S. default.
It’s hard to view this as a celebratory moment given how close the nation came to being unable to pay its obligations to investors, the military, hospitals and more. But there’s relief that the worst-case scenario has been avoided and that there is still some possibility for bipartisanship in U.S. politics. That is a low bar, but Mr. Biden and Mr. McCarthy cleared it.
The nation won’t face another debt limit crisis until 2025. The basics of the deal appear sensible, and most Americans will probably approve of them.
It imposes spending caps, but they are not onerous as the cuts in the initial House Republican bill were. After several years of discretionary budget increases, this will force what is essentially a two-year pause at most federal agencies. Unspent coronavirus funds also will be clawed back — a reasonable compromise.
If any sort of political center still exists in Washington, the tentative deal is about as close as it comes to finding it. Both sides got some of what they wanted: Republicans achieved some cuts, including to Internal Revenue Service funding, and Democrats preserved spending on important domestic programs, from the environment to education, at about current levels.
What should not happen now is for Americans to breathe a sigh of relief and move on. Yes, a last-minute compromise occurred, but a dangerous precedent has been set. House Republicans have now used the debt limit twice to create a hostage-like situation that brings the nation close to an unthinkable default. Expect that a future Republican Congress would be willing to go over the cliff to extract more.
The debt limit itself needs to be scrapped. Enacted in World War I, it was created so Congress would not have to keep approving debt issuances. A century ago, the limit was set high to avoid hitting it. In recent years, as the normal budget process in Congress has broken down, the debt ceiling has functioned as one of the few moments of reckoning on the increasingly alarming fiscal outlook.
But this latest deal has shown this isn’t a substitute for coming up with an actual, forward-looking fiscal strategy. Republicans employ the debt limit to force cuts to nondefense discretionary spending, which is only about 16% of total government expenditures. But this slice is not a key driver of the nation’s debt problems. The refusal of either party to tackle rapidly rising Social Security, Medicare and health care costs — along with Republicans’ opposition to any tax increases — means the debt limit isn’t forcing the tough choices that are needed.
Almost no other nation has anything like a debt ceiling because it no longer makes any sense. Congress has already approved the spending that forced the debt to rise. There should be no question, much less the possibility of an economic cataclysm, when the bills come due.
This crisis has passed, but 2025 is coming soon.