The Senate is scheduled to vote today on a debt-limit deal that would prevent a government default but falls far short of what the country needs to meet its long-term fiscal and demographic challenges.
“The main flaw in the agreement is that it reflects the continued refusal of our political leaders to confront fiscal reality,” Robert L. Bixby, executive director of The Concord Coalition, writes in a new blog posting. “Once again, they are leading with discretionary spending cuts while leaving the biggest problems -- entitlement and tax reform -- for another day.”
After many weeks of frustrating negotiations and bitter partisan debate, President Obama and congressional leaders said late Sunday that they had reached a deal to raise the debt limit while cutting back on projected spending over the next decade. The House approved the deal Monday night on a 269-161 vote.
The deal includes no tax increases, calls for the House and Senate to vote on a balanced budget amendment, starts with $917 billion in reduced discretionary spending over 10 years, and envisions further action based either on later recommendations from a special congressional committee or a back-up "trigger" mechanism with automatic spending cuts. The deal would also avoid a similar debt-limit battle during the 2012 election campaign.
The Congressional Budget Office said Monday that the plan would reduce projected deficits over the next 10 years by a total of at least $2.1 trillion – a far cry from the $4 trillion that the administration and congressional leaders were at one point contemplating.
Bixby said the proposed congressional committee “is the only aspect of the agreement that has the potential to be a game-changer.” Ideally, it could recommend a more comprehensive reform plan along the lines recommended by the president’s bipartisan fiscal commission and the Bipartisan Policy Center’s Debt Reduction Task Force.
Bixby also noted serious flaws in the back-up trigger mechanism that is supposed to ensure that certain levels of deficit reduction are actually achieved.