Proposal to raise debt ceiling aims to avert dire economic consequences

Tuesday, Aug. 2, 2011 | 2 a.m.

It has been said that a good compromise makes no one happy, and if that’s true, then the deal to raise the nation’s debt ceiling qualifies. Republican and Democratic lawmakers, not to mention a number of critics outside Congress, were grumbling over the plan.

Conservatives complained that the deal doesn’t do enough to cut the deficit, and liberals have criticized the size of the cuts and the lack of any revenue increases.

Congressional leaders raced to discuss the plan with their caucuses Monday and schedule a vote because they had little time. The nation will default on some of its debts if it doesn’t raise the debt ceiling by Tuesday night. That would be catastrophic, and the compromise avoids that.

The proposal will cut the nation’s deficit by nearly $1 trillion over the next decade, and it will raise the debt ceiling to allow the government to operate through the 2012 election. The plan also requires a bipartisan committee of lawmakers to come up with more ideas to cut the debt and submit those to Congress this year. If Congress fails to vote on those ideas, a series of cuts would be made to programs held dear to both Republicans and Democrats.

This plan is far from perfect, but given the toxic environment in Washington, it is probably the best that can be expected. The problem has been that Republicans in Congress, pushed by the Tea Party, have held the debt ceiling hostage and have acted irrationally.

Republicans have demanded draconian cuts in spending and appeared willing to run the nation into default if they didn’t get their way. Some Republicans have even denied the reality of the crisis, dismissing the fact that the country would default if it doesn’t raise the debt ceiling.

Republicans have been petulant and seemed to lack any understanding of the seriousness of the situation. They walked away from negotiations several times, and then tried to blame President Barack Obama for the difficulty with the talks — even though Obama offered to make substantial concessions. They refused to consider increasing revenue by ending loopholes that give the rich and big corporations lucrative tax breaks. They also only focused on cutting programs they didn’t like while trying to preserve their own sacred cows.

That type of obstinacy is dangerous. A default would hurt Americans and the economy, both here and around the world. It would drive up interest rates, make it more difficult for businesses to operate and send shudders through the stock markets.

The nation needs a balanced approach. There certainly have to be spending cuts, but Congress should be strategic in the way it makes them. And the nation needs to raise more money to protect essential services and invest in education, infrastructure and other important services.

Congress has the opportunity to do the right thing with the creation of the bipartisan panel to study ways to cut the deficit. There is the potential that the panel will be hijacked by politics — such panels have succumbed to political wrangling before. Lawmakers should put their partisan politics behind them and work together to put the nation on a course to a sound future.