WaPo: A Flawed Deal is Better Than No Deal
So far, reactions to the budget agreement have been mixed. As we said in our report yesterday, Understanding the Bipartisan Budget Act, the deal replaces short-term savings in sequestration with smarter, permanent savings from mandatory savings and user fees, a positive development. But it largely pushes the big decisions down the road.
Today, the Washington Post weighed in on the deal, remarking that "a flawed deal is better than no deal." Perhaps the greatest achievement of the budget committee was showing that bipartisan compromise is possible.
Yet the deal has one overriding virtue: It exists. Republican and Democratic leaders have produced a bipartisan spending plan — and one that doesn’t increase the deficit through fiscal year 2015 at that. Now House and Senate appropriations committees can proceed to allocate funds within the overall caps set by the Murray-Ryan agreement: roughly $520 billion for defense and $490 billion for non-defense discretionary spending over the next two years. This eases the “sequester,” restores needed funds to defense and all but banishes the threat of a government shutdown like the GOP-engineered fiasco that so badly damaged this country’s reputation in October.
In short, the agreement’s importance is not fiscal but political: It amounts to a truce in the destructive budgetary wars that have plagued Washington since the advent of a Republican-majority House in 2011. During the interlude, U.S. businesses can invest in job-creating (and deficit-reducing) growth without worrying too much about disruptions from Washington. And lawmakers can address long-term questions such as tax and entitlement reform — assuming they want to.
The bill resolves some short-term concerns on sequestration, but does not make the kind of progress we were hoping for on the long-term problem. The Post notes that on this front, they still have a long way to go.
They should. Yes, President Obama and Congress have already achieved some long-term fiscal adjustment, to the tune of $2.7 trillion over 10 years, according to the Committee for a Responsible Federal Budget. Yet deficits are hardly the stuff of “a stale debate from two years ago or three years ago,” as President Obama suggested in a speech last week. What little deficit reduction the Murray-Ryan agreement claims to produce comes from a classic budgetary “magic asterisk”: $28 billion in promised restraint in mandatory spending (mostly Medicare) in 2022 and 2023.
The Washington Post notes that in order to reverse our upward fiscal course, we will have to turn to serious entitlement reform and closing tax loopholes. This deal did not do that in a meaningful way. But lawmakers can build off it and achieve a larger deal that would resolve sequestration in the remaining years if they choose and put debt on a sustainable downward path. There are few low hanging fruit in the budget left, now we only have the tough choices.