News / USA

US Fiscal Deal Leaves Major Budget Challenges Unaddressed

House Speaker John Boehner of Ohio arrives on Capitol Hill, Wednesday, Oct. 16, 2013.
House Speaker John Boehner of Ohio arrives on Capitol Hill, Wednesday, Oct. 16, 2013.
Michael Bowman
The bipartisan agreement to reopen the U.S. government and avoid a debt default removes the immediate threat of financial calamity, but leaves America’s long-term fiscal challenges unaddressed. Lawmakers of both parties are acknowledging that major battles on spending, taxation, and government reforms lie ahead.

First the good news: the United States appears to have dodged a bullet to the nation’s economic heart. But the reprieve will be temporary.

Democratic Senator Mark Warner noted Wednesday’s accord restarts federal funding and extends the nation’s credit limit for just a few months.

“We have got 90 days before the government runs out of money again. We have 113 days until the debt ceiling might have to be raised again," said Warner.

Until then, a group from both houses of Congress will meet to hammer out a bipartisan budget agreement and attempt to address America’s long-term fiscal imbalances.

Even as lawmakers of both parties hailed Wednesday’s accord, they were quick to stake out partisan priorities going forward. Republican Senator Mitch McConnell pledged to fight to preserve automatic, across-the-board spending cuts that went into effect at the beginning of the year.

“Washington actually can cut spending. For the first time since the Korean War, government spending has declined for two years in a row. And we are not going back on this agreement," said McConnell.

Wednesday’s agreement locks in current austerity funding levels until January, when even deeper automatic cuts will take effect. Democrats want to replace the cuts - known as sequestration - with other cost-saving and revenue-enhancing measures. Once again, Senator Warner:

“Sequestration was set up to be so stupid that no rational group of people would ever let it happen. I understand that we have to cut back on spending. But there are smarter ways to do it," he said.

Democrats are likely to press for higher spending levels on education, the nation’s infrastructure, and other domestic priorities. Some Republicans want to spare the military from further budget cuts, but are likely to insist on deeper cuts to other areas of the budget to keep overall spending at sequester levels. Many Democrats want new additional tax revenue - something almost all Republicans oppose.
 
Compromise will be key to a larger budget agreement, according to Democratic Senator Tim Kaine.

“If there is to be a deal, make no mistake, it is going to have to be a bipartisan deal. Divided government means we have to listen to each other, we have to negotiate, we have to find common ground," said Kaine.

But bipartisanship has been a rare commodity on Capitol Hill, a fact underlined by the fiscal impasse that closed the government and sent America to the edge of default. But the resolution of that impasse offers hope going forward, according to Republican Senator Kelly Ayotte, who urged her colleagues to unite for the common good.

“Let us take on the big challenges facing this nation: the $17 trillion in debt. Let us get a budget for the nation. Let us move forward from here, learn our lessons, work together, and get it done for the American people," said Ayotte.

The question now is: will lawmakers fall back into old partisan habits, or will a new spirit of bipartisanship propel Congress to far-reaching agreements that secure America’s fiscal future?

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