The Concord Coalition said today that the budget and debt limit agreement reached by President Biden and Speaker McCarthy is a sound compromise that can be enacted in time to prevent any default on the federal government’s legal obligations.
Concord Coalition executive director Robert L. Bixby stated:
“As with any agreement reached on a bipartisan basis in a divided government, neither side gets all of what it wants. Moreover, there is still a lot of heavy lifting needed to put the budget on a sustainable path. But with just days remaining before the government runs short of the resources it needs to pay all of its bills in full and on time, President Biden and Speaker McCarthy have wisely concluded that compromise is necessary to avoid the damaging effects of default on the economy, the budget, and American families.”
Bixby continued, “Assuming that a crisis is avoided this time, policymakers should look for ways in which the debt limit might be reformed to make it a more effective tool for fiscal discipline and less of a risk to the nation’s creditworthiness. The threat of default as a negotiating tool remains and will return when the debt limit needs to be raised again. If we truly want to move beyond episodic crisis management and back to rational budgeting we should recognize that the debt limit itself has become part of the problem. As the Government Accountability Office (GAO) observed, ‘an alternative approach to the debt limit is needed.’ In any event, the best solution to unsustainable debt is not to risk default over raising the debt limit but to enact policies that don’t produce so much debt in the first place.”
