If crises create opportunities, then the crisis over the federal government shutdown and the debt ceiling may have left Americans with a very promising opportunity. It lies in a key part of the Senate compromise devised to end the 16-day political showdown in Washington.
The deal calls on the Democratic-led Senate and the GOP-led House to agree on a budget resolution by December. Under the plan, a joint committee will be tasked with making the difficult compromises needed to set the United States “on a long-term path to fiscal sustainability,” according to Senate majority leader Harry Reid (D) of Nevada.
Given the damage already done to the US’s reputation from this standoff, the congressional panel cannot fail. Otherwise, the deal will lead to another debt-ceiling showdown.
The political crisis began over “Obamacare,” but that was only part of a broader concern about the government’s unsustainable spending, its $17 trillion national debt, and the uncertainty they both pose to the middle class and future generations. Despite their hardball tactics in the House and unwise threats to the basic functions of government, the tea party's followers nationwide represent a general fear among Americans about the trajectory of the country’s finances.
Alleviating that fear of a debt tsunami must be the main goal as Congress moves toward authorizing the chairs of each chamber’s budget panels, Sen. Patty Murray (D) of Washington and Rep. Paul Ryan (R) of Wisconsin, to craft compromises on big issues such as Medicare, tax reform, Social Security, and defense spending.
The Senate deal sets a helpful precedent for how lawmakers can listen more than lecture in devising a balanced approach to the budget. “It took two parties to create the $17 trillion debt; it will take two parties to solve it,” said Sen. Kelly Ayotte (R) of New Hampshire, one of the Republican women in the Senate who forged the deal.
The US is hardly alone among nations in being forced to avoid financial calamity. Portugal just announced salary cuts of up to 12 percent for civil servants and an increase in the retirement age. Such steps may help it avoid exiting the eurozone. Greece has arrested hundreds of tax scofflaws to help fill its government coffers. It is trying to end nearly six years of a shrinking economy.
One example not to follow is Argentina’s. The country defaulted on almost $100 billion of sovereign default in 2001. Ever since, the government has been tied up in litigation with foreign creditors. The inflation rate is so high that officials try to suppress economists who report accurate figures.
As Washington steps back from the brink, it must calmly address the underlying worries about a government living beyond its means. Calm has prevailed in the Senate. If the House and President Obama join the search for a fiscal agreement, and actually find one, Americans may finally get the budget sustainability they want.