They fixed the budget the same way they always fix it: wrapping it up with a big red bow and shipping it to the taxpayers of the future. As Robert Bixby of the fiscal watchdog group The Concord Coalition puts it, the deal "requires no hard choices and solves no difficult problems." It neatly postpones that painful, necessary work till another day, when we can expect it to be postponed again.
President Barack Obama set out to cut total deficits by $2 trillion over the next decade, comparing to what they would have been under the tax and spending policies in effect last year. His main remedy was raising tax rates at the top end of the income spectrum. In the end, according to The Committee for a Responsible Federal Budget (CRFB), he got $650 billion, a piddling one-third of his goal.
Congressional Republicans wanted to focus on curbing outlays. They preferred no additional taxes at all, but if they were going to give on that point, they would demand big concessions from Obama on expenditures. In the end, though, Congress agreed to higher tax rates in exchange for ... no spending cuts. That's right: none.
Over the next decade, says CRFB, the U.S. government debt was on track to reach a staggering 81.5 percent of GDP, up from 72.8 percent today. Thanks to this noble display of statesmanship, it may hit only 78.9 percent.
It's enough to make you wish they hadn't bothered making a deal. In that case, automatic spending cuts would have kicked in, trimming projected outlays by $1.2 trillion over nine years. The sequester would have been ugly, taking the form of indiscriminate across-the-board reductions for domestic programs and defense. But it would have actually made a dent in the ever-expanding federal budget.
What we got instead was not a grand bargain. It was an exercise in evasion. That is no accident. The reason we got into the current fiscal pit is that politicians follow the path of least resistance. They prefer not to antagonize constituents by trimming back benefits that are widely cherished. But they also know better than to compel taxpayers to cover the entire cost of those programs. So spending mushrooms, tax revenues lag behind, and the debt soars.