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Updated: 10:40 p.m. Sunday, July 31, 2011 | Posted: 10:39 p.m. Sunday, July 31, 2011

Unsatisfying, but not a disaster


By The Palm Beach Post

Some irresponsible Republican members of Congress put a gun to the economy's head. The responsible lawmakers decided not to risk getting the hostage shot.

The debt deal that emerged Sunday is on terms largely dictated by Republicans. The major policy point on which President Obama and congressional Democrats appear to have prevailed is the near guarantee that there will not be another nail-biting fight over raising the debt limit before the 2012 elections. Even there, Senate Minority Leader Mitch McConnell, R-Ky, dictated the mechanism. After an initial increase of about $1 trillion, Mr. Obama would be able to raise the debt limit on his own unless two-thirds of the members of both houses of Congress stop him.

Republicans prevailed on other major points. They insisted that budget cuts match or exceed the amount by which the $14.3 trillion debt limit can be raised. News reports said Sunday those cuts would be $2.5 trillion over the next decade. Democrats and economists are right that such a de-stimulus will hurt the economy and should have been balanced by significant revenue increases.

A bipartisan group of lawmakers will be appointed to identify future budget-reduction measures. If they can't agree, a "trigger" mechanism automatically will impose more cuts. Republicans also likely will be guaranteed a vote in both houses on a constitutional amendment requiring a balanced federal budget. That's a step down from the GOP's preferred position - actual passage by Congress of a balanced budget subsequently submitted to the states.

Assuming the deal doesn't blow up in the House over defense cuts, it remains to be seen whether voters remember how Republicans pandered to their tea party extremists and brought the nation to the brink of default. And if the economy remains stalled, who knows whether voters will blame Democrats or lash out at Republicans?

Much could depend on how the budget-cutting panel plays out, the impact on Social Security and Medicare, and on the fall's coming fights over budgets and spending. Those could involve new threats to shut down the government, but not threats of default.

Sen. McConnell is emerging as the "reasonable" Republican who finally negotiated a deal to raise the debt limit. But this deal and the way it was "negotiated" are reasonable only in comparison to the consequences of default.

How was it reasonable to fling this uncertainty into an economy that remains dangerously weak? How was it reasonable to put America's credit rating at risk of a downgrade that would - and still could - increase the deficit and force every consumer who uses a credit card or needs a mortgage, car loan or student loan to pay higher interest?

If this deal goes through, irresponsible Republicans will have "won" only by threatening to make everybody lose.

- Jac Wilder VerSteeg,

for The Palm Beach Post Editorial Board

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