October 16, 2013

Short-term debt deal won’t mask big barriers ahead

House-Senate talks are barely touching the underlying causes of debt-and-spending stalemates that pushed the country close to economic crises.

By Charles Babington
Associated Press

WASHINGTON – Hold the champagne.

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House Speaker John Boehner of Ohio arrives on Capitol Hill, Wednesday, Oct. 16, 2013, in Washington. Chaos among Republicans in the House of Representatives has left it to bipartisan leaders in the Senate to craft a last-minute deal to fend off a looming U.S. default and to reopen the federal government as a partial shutdown entered its 16th day.

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Even if Congress reaches a last-minute or deadline-busting deal to avert a federal default and fully reopen the government, elected officials are likely to return to their grinding brand of brinkmanship – perhaps repeatedly.

House-Senate talks are barely touching the underlying causes of debt-and-spending stalemates that pushed the country close to economic crises in 2011, last December and again this month.

Late Tuesday, the GOP-controlled House dropped efforts to craft a bill to raise the debt limit and fully open the government. House members will wait for the Democratic-controlled Senate to act, which could push a final resolution past Thursday. That’s when administration officials say federal borrowing powers will be tapped out.

Still, many in Congress expect a resolution, even if it’s a few days late. At best, however, lawmakers and the White House will agree to fund the government and raise the debt limit for only a few months. They also will call for yet another bipartisan effort to address the federal debt’s major causes, including restricted revenue growth and entitlement benefits that rise automatically.

And yet, top advocates say they’ve seen virtually no change in the political dynamics that stymied past efforts for a compromise to end the cycle of brinksmanship and threats to harm the economy.

Republicans still adamantly oppose tax increases. Powerful interest groups and many Democrats still fiercely oppose cuts in Social Security and Medicare benefits. And congressional rules still tempt lawmakers to threaten economic havoc – by sending the nation into default – if the opposing party doesn’t yield to their demands.

“We’re probably going to have to go through this a few more times,” said Bob Bixby of the bipartisan Concord Coalition, which advocates budget reforms. Even if a compromise plan this month wins House, Senate and White House approval, Bixby said, it will leave fundamental problems that “they haven’t done anything to address.”

Henry J. Aaron, a Brookings Institution scholar who supports unprecedented legal action to avert future debt showdowns, agreed that three or four months of breathing room is a small victory. “If all we achieve is a repetition of this charade,” Aaron said, “we will not have achieved much.”

The political landscape is littered with once-hopeful bipartisan efforts to reach a “grand bargain” – or even a modest bargain – to slow the growth of the nation’s $16.7 trillion debt and to make spending and revenue trends more sustainable.

There was the Simpson-Bowles plan, first issued in 2010, and revised early this year. The revised version called for about $1.3 trillion in new revenues over 10 years, from various sources (about half the original plan’s target). It would slow the growth rate of Social Security benefits and raise the eligibility age. It would limit popular tax deductions such as those for charitable gifts and mortgage interest.

The Simpson-Bowles plan remains widely praised nationwide, and largely ignored in Congress.

Then there were the 2011 secret talks between President Barack Obama and House Speaker John Boehner, R-Ohio. Boehner suggested $800 billion in new revenues over 10 years – less than Obama wanted – in exchange for widespread spending cuts, including curbs on Medicare and Social Security.

It was never clear whether Obama could have pushed the plan through the Democratic-controlled Senate. It didn’t matter, because Boehner’s GOP colleagues vehemently objected when details leaked, and the talks collapsed. Efforts last year to revive negotiations also failed.

A bipartisan congressional “supercommittee” fared no better. Both parties had agreed to supposedly unbearable “sequester” spending cuts to goad each other into big compromises to find a better way. But negotiations faltered and the clumsy-by-design sequester cuts – automatic and across the board – became law this year.

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