The tentative debt limit agreement President Barack Obama and leaders in Congress negotiated over the weekend is awful. It involves extensive spending cuts at a time when economic growth and job creation are practically non-existent, all without actually providing enough deficit reduction to secure our long-term prosperity. It offers no assurance (and considerable doubt) that the wealthy and large corporations, who now pay as low a percentage of their incomes in taxes as at any time in decades, will contribute anything whatsoever to the ultimate solution, and it represents less an example of a well-functioning democracy than a case of panicky deal-making. Also, it might not actually pass Congress before the nation starts running out of money to pay its bills tomorrow.
But it is better, at this point, than any of the alternatives. Assuming it is able to garner sufficient support from both parties in Congress (particularly in the hyper-polarized House of Representatives) it will stave off a first-ever default on the national debt and may even be enough to prevent an immediate downgrade in our AAA bond rating, which would result in higher interest payments for the federal government, and quite likely higher rates on consumer mortgages, car loans and credit cards. The spending cuts — $1 trillion of which have been agreed to, with about $1.5 trillion yet to be determined — would to some degree spare programs that help those most desperately in need. And a relatively small amount would kick in right away. Finally, the agreement avoids a second vote on the debt limit before the 2012 election, which would have amounted to a repeat of the manufactured crisis we've been enduring for the last few weeks.
It's difficult to muster a lot of enthusiasm for the 12-member congressional deficit reduction committee that would be charged as part of this deal with coming up with the remaining $1.6 trillion in deficit reductions. The idea is more or less modeled on the base realignment and closure process, or BRAC, which amounts to a congressional recognition that it is too self-interested and petty to make difficult decisions. The committee's job would be to develop a deficit reduction package by Thanksgiving that would be subject to an up-or-down vote by the end of the year. If it doesn't, or if the package is rejected by Congress, the alternative would be steep spending cuts, half in domestic programs and half to the defense department.
Whether increased tax revenue could be a part of that final agreement is somewhat unclear. The White House and congressional Democrats seem to think so; House Speaker John Boehner seems to think the opposite. That very lack of clarity may be crucial to the deal's chances of passage. But it doesn't bode well for the prospect of a simplification of the tax code that lowers rates but, through the elimination of deductions and loopholes, actually raises more revenue, along the lines of the proposals by the Bowles/Simpson fiscal commission last year or the Gang of Six deal negotiated by a bipartisan group of senators.
The eminent sensibility of that idea is, in today's Washington, the very reason for its unlikelihood. Thanks to gerrymandered congressional districts that mean many representatives face competition only in their party primaries, there are few centrists left, and members of both parties' fringes not only have an incentive to embrace extremism but reason to fear for their re-election prospects if they don't. The tea party freshmen in the House are likely more concerned with being outflanked to the right than they are by the prospect that they'll be beaten by a moderate of either party. It's worth noting that the Gang of Six proposal was born in the Senate, where members must win state-wide, and no similar attempt at consensus emerged in the House.
There is good reason to fear that the deficit committee enforcement mechanisms the president and congressional leaders negotiated won't work. The mix of cuts to domestic programs and defense is designed to be sufficiently unpalatable to both sides that it will heighten the incentive to compromise, but it's not clear that Republicans will seek to avoid defense cuts at all costs. In a world in which virtually the entire GOP caucus has signed a pledge to never allow an increase in taxes under any circumstances, the normal rules don't apply. Whatever the committee comes up with is likely either to fail or to be a compromise in name only.
Much of the commentary today on the agreement focuses on whether President Obama caved in to the Republicans and abandoned his party's principles. Some argue that he should have been just as recalcitrant as the tea party Republicans in hopes of repeating President Clinton's political success in staring down then-House Speaker Newt Gingrich during the government shutdown of 2005. But the stakes this time were a bit higher than closing the national parks for a few days. Mr. Obama was faced with the prospect of real economic chaos, a blow to national prosperity that might well have been worse and longer lasting than the financial crisis of 2007-2008. He did what he had to do. That is neither to his credit nor discredit. It is simply part of the job.
Congress should do its job, too, and approve this deal because it is the only one we have and the only one that's now possible. It is far from a moment of triumph but, instead, proof that the ingenious design of our political system does not make it foolproof. It does still require the election of responsible, reasonable people. We have come too close to the edge this time to believe otherwise.
The important question now is whether American voters will do our job and send to Washington leaders who put the national interest over narrow political ideology. If ever we needed an election, we do now. November 2012 can't come soon enough.