Leaders Agree on Debt Deal
@ the Wall Street Journal
The deal would raise the debt ceiling by $2.4 trillion in two stages, and provide initially for $917 billion in spending cuts over 10 years. A special committee of lawmakers would be charged with finding another $1.5 trillion in deficit reduction, which could come through a tax overhaul and changes to safety-net programs.
If the committee doesn’t find at least $1.2 trillion in savings, or Congress doesn’t adopt its proposals, a pre-set array of spending cuts would kick in, including cuts in military spending and Medicare payments to health-care providers.
For all the down-to-the wire drama, the deal leaves the hardest questions unanswered and sets in motion years of fiscal pain. It imposes spending caps for the next 10 years, but leaves the details of what programs would be cut to congressional committees.
And it launches a ferocious, months-long argument over how to rewrite the tax code and what changes to make in popular programs like Social Security and Medicare—issues that were ultimately shelved in this debate.
So while one uncertainty would be lifted from the economy with the increase in the debt ceiling, others would be prolonged.
In other words, the fight’s not over yet.