Congress and the president have agreed to buy themselves more time before being forced to come to grips with the budget deficit, but they would be wise not to squander it on partisan bickering and petty one-upmanship.
The nation is frustrated by their inability to take care of the country's business in a timely and efficient manner — and, according to a new poll, so are global investors.
Last week, House Republicans backed away from a demand not to increase the nation's borrowing cap unless there is an equivalent amount of spending cuts. They passed a bill, which the Senate has agreed to pass and the president has indicated he will sign, postponing a default for at least three months.
It also stipulates that members of neither the Senate nor the House will be paid beyond April 15 if they fail to pass budgets.
If nothing else, the bill averts yet another crisis in Washington.
The last time Congress and President Barack Obama played chicken on extending the debt ceiling, Standard & Poor's lowered the nation's credit rating, and the stock market plunged. In the end, the debt ceiling was raised, but only after the nation was forced to endure the blundering of its political representatives.
Most recently, the fiscal cliff crisis came down to the wire before a last-minute settlement was reached.
Happily, that won't happen this time — or at least not yet.
Our politicians may not have bought themselves an extra three months to hammer out a budget deal — but only about five weeks. That is because another date — March 1 — is looming in the budget saga.
That is the date when $1.2 trillion in automatic spending cuts — formally known as sequestration — begin to take effect. Neither party wants to see the across-the-board cuts that sequestration would entail, but their track record on working together has been abysmal.
In the bigger picture, lurching from one deadline and crisis to the next isn't doing the country any good. Besides an erosion of
trust in Washington on the part of the American public, this soap opera is trying the patience of global investors.
A Bloomberg News global poll taken Jan. 17 of investors, analysts and traders found that 36% of the respondents cited the United States' fiscal problems as the biggest threat to the world economy, compared with 29% who chose Europe's sovereign-debt crisis and 15% who pointed to a slowing Chinese economy. Despite a rising stock market, 47% said that the fiscal squabbling is discouraging them from investing in U.S. financial markets.
Despite their agreement on this most recent bill to suspend the debt ceiling deadline temporarily, there is little to suggest that either Democrats or Republicans truly are committed to compromising on the budget.
BOTH PARTIES TO BLAME
Democrats are still trying to protect most spending programs and prefer additional taxes to whittle down the deficit, while Republicans want deep spending cuts and no new taxes.
The GOP took a positive step by introducing last week's bill in the House and backtracking on its earlier position, but most observers interpreted it as one more calculated move in a chess match. They said that the Republicans had to revise their position or risk being blamed for allowing the country to default on its obligations.
Democrats are no better.
Mr. Obama spent most of his inaugural speech talking about his social agenda and little time on fiscal policy.
In repeated polls and interviews, most voters have indicated that they want their elected officials to act responsibly and to produce results. The only clear path to achieve those ends is a willingness to compromise. Not everybody gets everything they want, and most Americans understand that.
Congress and the president should act like they understand it, too.
