A shutdown averted -- for now

Our view: If Washington wants to get serious about the debt, a more rational, balanced approach is required

April 11, 2011

There's always a great temptation after a political tussle like last week's federal budget showdown to immediately declare a winner and a loser. House Republicans can claim victory by setting the budget-trimming agenda in Washington, while Senate Democrats can claim they successfully defended against an ideological assault on women's health, Head Start, public broadcasting and other popular programs.

The reality is that both won, but only in the sense that they were saved from themselves. Had the standoff over a relatively minor amount — $38.5 billion, or about 1 percent of the federal budget — resulted in a shutdown of government, all involved stood only to lose.

No amount of finger-pointing was going to cause Americans to feel good about a government so dysfunctional that it came within hours of a shutdown to pull off what could generously be described as a minor budget agreement. (Tea Party members excepted, of course).

A shutdown would have been more than a minor inconvenience — and not just to federal employees, contractors and the U.S. economy. It would have demonstrated that Congress was hopelessly at war with itself over matters of taxes and spending.

Yet the 21st century's Fort Sumter moment (an apt metaphor, perhaps, for this week's 150th anniversary of the start of the Civil War) may only have been delayed, not avoided. Congress has little more than a month to raise the debt ceiling by mid-May, and tea party disciples are promising an even more furious assault.

The result could be far worse than closing federal agencies for a few days. If the U.S. fails to meet its debt obligations, the impact on the nation's economy could be, as Treasury Secretary Timothy Geithner has warned Congress, worse than the recent recession.

Consider the likely consequences: higher interest rates; nothing to back checks for Social Security, military pay or jobless benefits; a further drop in home values. For those and other reasons, a U.S. default would be "unthinkable," Mr. Geithner wrote last week. Yet that's exactly the path Republicans are openly inviting — a budgetary hostage-taking that makes last week's stakes seem penny ante by comparison.

Democrats can't keep rewarding House Republicans for courting fiscal disaster. As much as President Barack Obama seems to enjoy his position as most responsible person in the room, conceding over and over again to an unreasonable faction of a political party that controls one-half of one branch of the federal government is a strategy akin to negotiating with a bunch of highjackers. It just invites more hostages and even greater demands.

All of this simply raises the stakes for Mr. Obama, who, in an answer to the long-term budget plan released by House Budget Chairman Paul Ryan last week, is scheduled to announce tomorrow his plan to reduce the long-term deficit. Washington needs a more rational approach to managing federal spending then these clashes of budget-cutting brinksmanship.

House Speaker John Boehner has already warned that he expects any increase in the debt ceiling to include something "really, really big" attached to it. He means spending cuts, but the reality is that the really, really big thing Mr. Boehner is inviting is a double-dip recession.

Americans understand that hard times require some degree of shared sacrifice. They may even be ready to see programs previously considered untouchable, such as Medicare and Social Security, actually face some belt-tightening.

But so far, it's the middle class and the poor who seem to be the only ones doing the sacrificing. Fairness demands that the wealthy pony up in the form of higher taxes as well. A serious effort to reduce the debt requires not only a more rational approach to decision making; it necessitates a more balanced approach to paying the bill.

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