The deal struck in Congress last week to raise the debt ceiling meant the nation did not default on its debts. But few of the players and observers seem to believe the measure could be characterized as a success.
And if the palpable ambivalence about the compromise were not enough, the downgrading of U.S. credit by the rating firm Standard & Poor’s from AAA to AA+ has fueled a new round of remonstration.
So if the doomsday scenario of default was avoided, what else — if anything — was accomplished? How should success on managing the nation’s long-term national debt be measured? Join us at The Maine Debate from 10 a.m. to noon on Tuesday to discuss the debt ceiling resolution.
Though the deal to raise the debt ceiling includes mechanisms to cut federal spending, it did not include any roll-backs in the tax breaks enacted during the Bush years. A more balanced compromise would have eliminated some subsidies and tax breaks, and perhaps even raised rates on the wealthiest of Americans. This deal to raise the debt ceiling did not add to the revenue side.
Tea party Republicans, moderate Democrats and Republicans and progressive Democrats all are criticizing the deal. Hard-core fiscal conservatives don’t like the amount of debt that will be retired; progressives worry the belt-tightening could weaken the recovery. And most in Congress also are wringing their hands over the lack of bipartisanship and the angst through which the nation suffered as the deadline approached. Could it have been done differently?
One approach might have been for seven or eight senior members from each party to gather behind closed doors and craft a basic framework. It could have included spending cuts, ratcheting down Social Security, Medicare and Medicaid benefits and tax increases for the wealthy. Tea party Republicans and progressive Democrats could have held their press conferences denouncing the deal and then voted for it, citing the good of the country. Why was such an approach not used?
Rep. Betty McCollum of Minnesota, a member of the House Appropriations and Budget committees, notes that since 1960, Congress passed debt ceiling legislation 78 times: 49 times under Republican presidents and 29 times under Democratic presidents. She argues, in an O p-Ed column, the plan will “slash trillions of dollars of investments at exactly the moment when more investment is needed to prevent the U.S. economy from sliding back into recession.”
Is this an accurate assessment? Or do you agree with many Republicans who argued that mounting debt was more of a threat to a sustained recovery?
Then there is the downgrading of the nation’s credit rating. S&P wrote: “The downgrade reflects our opinion that the … plan that Congress and the Administration recently agreed to falls short of what, in our view, would be necessary to stabilize the government’s medium-term debt dynamics.” Does this suggest more revenue is needed? More definitive cuts? Both?
Join us Tuesday to deconstruct the debt ceiling deal.