President Obama and congressional leaders have put together a proposed budget deal that would avoid an immediate federal debt crisis and give appropriators time to fund the government before a potential shutdown in December.
The agreement, released late Monday, would suspend the debt limit until March 2017, remove some sequester spending cuts and enact changes to entitlement programs while dealing with an approaching shortfall in Social Security’s Disability Insurance program.
“Waiting until the last minute to produce legislation leads to imperfect policy choices, and this budget deal is no exception to that rule,” Robert L. Bixby, Concord’s executive director, said today. “However, this appears to be an acceptable compromise given the circumstances. While it has some budget gimmicks, it also contains some reforms to Social Security and Medicare that can potentially be built upon.”
The suspension of the debt limit would provide welcome reassurance to the financial markets that the United States will not default on any financial obligations. In a guest column in The Hill today, Bixby warned: “Playing with the nation’s creditworthiness is a dangerous game, one that elected officials should not be playing at all.”
The continuing resolution that is currently funding the government expires Dec. 11. With the top-line discretionary spending numbers resolved through the budget deal, congressional appropriators could get to work on bills to fund the government for the rest of Fiscal 2016. This process would allow for thoughtful decisions in the coming weeks on which programs deserve funding increases and which should be cut.
External links:
Bixby: Raise the Debt Limit Now (The Hill)
Federal Debt and the Statutory Limit (CBO)
