At almost the last minute, congress meandered into action and voted to raise the debt ceiling. As part of this deal, there will also be spending cuts. As with all compromises, most folks are not happy.
The mainstream Republicans had hoped to get more cuts. However, they are no doubt pleased that they were able to protect their beloved “job creators” from a return to the tax rate that existed before the Bush-era tax cuts. For the most part, the tax loopholes and so forth also were left intact. As such, the Republicans did seem to achieve two key goals: spending cuts and no increase in government revenue.
The Democrats were probably pleased that they got the debt ceiling raised, thus preventing (for now) America going into default. They were probably also pleased that the Republicans refrained themselves from introducing a bill calling for the harvesting of both kidneys from the Democrats in congress (which would have been heroically negotiated to one kidney by the might Democrats). The Democrats were probably less pleased by the fact that they seem to have handed Republicans what they wanted while getting little in return.
The President is probably a bit divided. On the one hand, the country did not default (yet) on his watch. On the other hand, he did not get the revenue increases he had wanted. Whether this situation will help him or hurt him (or neither) in 2012 remains to be seen. Perhaps it will help him by making the Republicans appear willing to wreck the country to score ideological points. Perhaps it will hurt him by making him appear weak. Perhaps it will have no effect. After all, the 2012 elections are a ways off and people have short memories.
The Tea Party folks seem rather upset. As some wits have noted, they would only be happy if there was no government left. Of course, this is not exactly true-Tea Party folks seem to love their entitlements as much as everyone else. The Tea Party does have a good point though: the cuts are not enough.
My take on the matter is that it is a lame compromise that merely buys us a bit more time until the next crisis. While there are cuts, they are (as the Tea Party folks correctly point out) not significant enough to properly address the real problem, namely the debt. What is needed is, as others have argued, more substantial cuts. However, these cuts need to be from our “luxury”spending (subsidies to profitable industries, for example) and our wasteful spending (such as entitlements for those who are not in need) rather than from necessary and useful spending. What is also needed is an increase in revenue by closing loopholes and removing the Bush-era tax cuts.
I also contend that America should take the approach of other over-spenders who are serious about dealing with their debt. We need a clear, coherent and viable debt reduction plan with tangible goals and accountability. I suspect that our current crop of politicians cannot do this for us. In part this is not their fault. First, the current election system (“money talks”) makes it difficult for them to take actions that would dry up special interest money. Second, the voters are (as always) a problem-they tend to not be inclined to vote for people who would, in fact, do what must be done.