Debt-ceiling deal doesn’t end battles

Opinion: August 5, 2011 at 12:00a.m.

In the end, President Barack Obama got his longer debt-ceiling extension, and tea party Republicans succeeded in forcing more future spending cuts as the price.

But assessment of the ultimate fallout from the agreement that ended the disheartening display of dysfunctional politics that preoccupied the capital and threatened government default is more complex. It depends on how its procedures affect future spending and the ultimate impact on the economy and the 2012 election.

The bad news is that, despite Obama’s plea Tuesday for action on trade deals and other measures that could help the economy, Congress is likely to remain fixated on cutting spending, an essential long-term goal but one that might hamper efforts to create jobs and provide the economic boost voters demanded last fall.

Although provisions setting future spending caps may prevent a major battle over funding the government in the fiscal year starting Oct. 1, the issue will remain front and center until at least December, when lawmakers consider the new bipartisan committee’s plan — assuming it agrees on one — to cut the deficit by an additional $1.5 trillion.

Spending cuts

Failure to agree would trigger cuts in spending, including more reductions in Medicare than the Democrats want and more in defense than the Republicans want.

Still, that bad news may be outweighed over the long run by the good. Besides preventing further such battles anytime soon, the measure includes mostly back-loaded spending cuts designed to reduce damage to the fragile economic recovery. And it could force acceptance of the more balanced deficit control that voters say they want and lawmakers have repeatedly resisted.

That’s because the new panel can consider all aspects of deficit control, including revenue increases Republicans have resisted and entitlements cuts that Democrats have resisted.

That doesn’t mean a big tax increase or a major revamping of Medicare. Any proposal will require support from at least seven members among a group of six Democrats and six Republicans. And congressional leaders probably will appoint members who reflect traditional party stances.

An early clue could come from whether Senate leaders name members of the so-called “Gang of Six” that crafted one of the broader plans rejected during the debt-ceiling debate. Its Republicans showed receptivity to more revenues and its Democrats to cuts in entitlements.

In the end, some consideration of those subjects seems inevitable, simply because there are limits on how much can be cut from discretionary domestic and defense spending without inflicting real damage on Americans who depend on federal programs and national defense. But if the panel agrees — and the threats of more drastic cuts are designed to ensure that — its proposals will be protected from usual partisan crossfire by a requirement for an up or down vote on the entire package.

Ironically, lawmakers of both parties talked about doing something similar before Obama created the non-binding Simpson-Bowles debt commission that came up with nearly $4 trillion in spending cuts and revenue increases last fall.

Congressional proposals

Initial bipartisan congressional proposals also would have created a panel with a requirement for an up-or-down vote on its recommendations. But some Republican sponsors abruptly withdrew support from that concept, and critics from both parties kept it from getting the required 60 votes.

Obama then named his own 18-member bipartisan panel, but it fell three votes short of the required 14 votes to endorse specific proposals, in part because House Republican members opposed including tax increases.

Obama never endorsed that or any other plan, opening himself to months of Republican criticism. White House officials feared anything he backed would be dead on arrival because of opposition from interest groups of both the left and right.

In any case, there’s no certainty the new bipartisan panel will propose additional revenues. But the issue isn’t going away, and Democrats will retain some leverage as long as they control the Senate and the White House since extension of the 2001 and 2003 Bush tax cuts beyond 2012 will require the support of both houses — and the president.

Carl P. Leubsdorf is the former Washington bureau chief of the Dallas Morning News. Distributed by McClatchy-Tribune Information Services.