For years, fiscal hawks have been urging elected officials to “go big” on debt reduction. But as yesterday’s House vote on the Murray-Ryan budget showed, budget minimalism is the art of the possible in today’s Washington.
It’s an exceedingly modest agreement that temporarily repairs some of the damage done by the Budget Control Act of 2011. Nonetheless, the Senate ought to pass the two-year budget too, because it would accomplish three important things:
First, it would prevent another government shutdown in January. With the recovery finally gaining steam, it’s essential that Washington refrain from the kind of fiscal brinksmanship that has repeatedly torpedoed economic confidence. Yet the GOP could yet force a fiscal crisis over raising the debt ceiling, which has to be done again early next year.
Second, the agreement blunts the impact of the sequester, at least for the next two years. The deal would replace about half of the sequester’s cuts to domestic and defense spending in 2014 with savings elsewhere in the budget. And because those offsets take effect in future years, the deal also would reduce fiscal drag on the economy. Still, it’s just a temporary fix, and in any fiscal reform worthy of the name, the sequester must go.
Third, the deal could signal a “return to normalcy” in budget politics. In a rare moment of bipartisan accord, it passed the House with roughly equal numbers of GOP and Democratic votes. And for once, House Speaker John Boehner forthrightly criticized the Tea Party bitter enders and right-wing pressure groups who oppose on principle even tiny compromises with Democrats on fiscal matters.
The Murray-Ryan agreement has one really egregious flaw: It failed to extend unemployment benefits for 1.3 workers stuck in long spells of unemployment. Senate Democrats say they will try to rectify that Grinch-like omission next year.
All in all, however, the deal strikes a small blow for fiscal sanity and against the extremists who have held sway over Republicans since the 2010 election.