The agreement that broke the impasse over the US debt ceiling came with hours to spare before the Treasury’s deadline. From today, had no agreement been reached, the US government would have had to stop meeting some of its obligations. This months-long pantomime may call to mind Winston Churchill’s remark that Amer- icans can always be counted on to do the right thing, after all other possibilities have been exhausted. That judgment would be too kind.
Avoiding default had become the overriding priority, and that has been achieved. The deal fails to put US budget policy on a sustainable path, however: despite all the tearing of hair and beating of breasts, the fiscal adjustment is modest and by no means guaranteed. The budget quarrels will go on – in a political atmosphere more poisonous than before, if that were possible.
The debt-ceiling agreement is complicated and opaque. Critics in both parties complain that, after frantic private negotiations among a handful of participants, Congress was presented with a fait accompli. Voters should feel equally aggriev- ed. This was the very opposite of the public debate that the US needs on budgetary ends and means.