The recent debate over funding the government and raising the debt ceiling represents a collective failure by our leaders in Washington and a national embarrassment on the world stage. While many members of Congress and the president were busy scoring political points and making outlandish promises, they put our economy at immediate risk, lost sight of fiscal dangers in the future and diminished America’s standing in the world. Rather than abiding by bipartisan spending limits and working to find a smarter way to implement them and heeding public sentiment on the need for further spending reforms, Congress wasted time on partisan bickering and the president repeatedly refused to negotiate on any of it.
Now, in the midst of a government shutdown and on the edge of default, Washington has cobbled together another short-term band-aid coupled with the promise of possible spending cuts and reforms down the road. It’s well-worn strategy in Washington that alleviates short-term pressure while building more for the next inevitable crisis. Despite a stated desire from both parties to halt governing crisis-to-crisis, these debates and this legislation only fuels that approach.
Though I’m hopeful this brush with disaster is enough to spur real action to implement needed reforms and smarter cuts, I remain skeptical until Washington takes concrete steps in that direction. Politics, inflammatory rhetoric and partisan pressure must take a backseat to responsible governing and budgeting.
ADDITIONAL RESEARCH
Political Bickering Overshadows Fiscal Outlook, Economic Reality:
Fitch Ratings Put U.S. Credit Rating On Negative Watch, Citing “Political Brinksmanship” Among Other Reasons. “The U.S.’s AAA credit grade was placed on rating watch negative by Fitch Ratings, which cited the government’s failure to raise its borrowing limit as the Treasury’s deadline nears. ‘The political brinkmanship and reduced financing flexibility could increase the risk of a U.S. default,’ Fitch, which is a jointly owned subsidiary of Paris-based Fimalac SA and New York-based Hearst Corp., said today in a statement. Fitch reiterated that it expects the debt ceiling to be raised.” (John Detrixhe, “U.S. AAA Rating Put on Negative Watch by Fitch on Delayed Budget,” Bloomberg, 10/15/13)
Congressional Budget Office Projects “Much Gloomier Long Term Outlook For Federal Budget Deficits Than Its Year-Ago Forecast.” “The nonpartisan Congressional Budget Office on Tuesday projected a much gloomier long-term outlook for federal budget deficits than its year-ago forecast. The CBO now predicts that federal debt held by the public will rise to 100 percent of gross domestic product by 2038 under its ‘extended baseline scenario.’ (It’s around 73 percent now.) Last year it predicted the ratio would fall to 52 percent over the quarter-century in the baseline scenario. This is, as the CBO notes, a ‘very large’ forecast revision.” (Peter Coy, “Why the CBO Dramatically Darkened Its Budget Outlook,” Businessweek, 9/17/13)
Majority Of Americans Support Spending Cuts With Debt Limit Increase:
Bloomberg Poll: 61 Percent Support Spending Cuts With Debt Limit Increase. “Americans by a 2-to-1 ratio disagree with President Barack Obama’s contention that Congress should raise the U.S. debt limit without conditions. Instead, 61 percent say that it’s “right to require spending cuts when the debt ceiling is raised even if it risks default,” because Congress lacks spending discipline, according to a Bloomberg National Poll conducted Sept. 20-23.” (Julie Hirschfeld Davis, “Americans Reject by 61% Obama Demand for Clean Debt Vote,” Bloomberg, 9/26/13)
Public Notice Poll: 58 Percent Support Spending Cuts With Debt Limit Increase. “A new poll found that a majority of Americans support spending cuts in exchange for lifting the debt ceiling ahead of negotiations over the federal government’s funding and debt ceiling. The poll, sponsored by Public Notice and conducted by the Tarrance Group, also found significant pessimism about the economy’s prospects and a distrust of government debt and spending. … Fifty-eight percent of those polled said any increase in the debt ceiling should be at least matched with an equal decrease in government spending.” (Andrew Evans, “Poll: Americans Want Spending Cuts in Exchange for Debt Ceiling Increase,” Washington Free Beacon, 9/4/13)
Fiscal Fights Draws International Scorn, Mocking:
From Mexico: Washington Looks Like “Spoiled Little Rich Kids.” “The word many Mexicans now use to describe Washington reflects a familiar mix of outrage and exasperation: berrinche. Technically defined as a tantrum, berrinches are also spoiled little rich kids, blind to their privilege and the effects of their misbehavior.” (Damien Cave, “Viewing U.S. in Fear and Dismay,” The New York Times, 10/15/13)
From Greece: “Our American Friends Are Getting A Taste Of The Same Medicine.” “’It just goes to show that it’s not only Greece that has irresponsible and shortsighted politicians,’ said Ioanna Kalavryti, 34, a teacher in Athens. ‘We’ve been held hostage by our reckless politicians, and the interests they serve, for more than three years now. I guess our American friends are getting a taste of the same medicine.’” (Damien Cave, “Viewing U.S. in Fear and Dismay,” The New York Times, 10/15/13)
The New York Times Headline: “Seeing Its Own Money At Risk, China Rails At U.S.” “China has become shrill in its criticism of the fiscal train wreck in the United States, arguing that the answer to a potential government default is to begin creating a “de-Americanized world.” (Mark Landler, “Seeing Its Own Money At Risk, China Rails At U.S.,” The New York Times, 10/15/13)
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