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Finally, President Joe Biden and House Speaker Kevin McCarthy (R-Calif.) have reached a deal to avert an embarrassing -- and potentially disastrous -- U.S. default. It's hard to view this as a celebratory moment given how close the nation came to being unable to pay its obligations to investors, the military, hospitals and more. But there's relief that the worst-case scenario has been avoided and that there is still some possibility for bipartisanship in U.S. politics. That is a low bar, but Mr. Biden and Mr. McCarthy cleared it.
The agreement 'in principle' still has to pass Congress, which is not a given, especially in the House, where far-right members are already bashing it. The June 5 deadline for default leaves little room for antics.
If this passes, the nation won't face another debt limit crisis until 2025. The basics of the deal appear sensible, and most Americans will probably approve of them.
It imposes spending caps, but they are not onerous, as the cuts in the initial House Republican bill were. After several years of discretionary budget increases, this will force what is essentially a two-year pause at most federal agencies. Unspent coronavirus funds will also be clawed back -- a reasonable compromise that this Editorial Board had advocated in recent weeks. The deal avoids the mistake the Obama-Biden White House made in 2011 when it agreed to caps for a decade that slowed the recovery and hampered its ability to do much in its second term.
If any sort of political center still exists in Washington, the tentative deal is about as close as it comes to finding it. Both sides got some of what they wanted: Republicans achieved some cuts, including to Internal Revenue Service funding, and Democrats preserved spending on important domestic programs, from the environment to education, at about current levels. Even on contentious issues such as tying work requirements to government assistance, Mr. Biden and Mr. McCarthy appear to have taken the least controversial route, which is increasing them for older food stamp recipients with no children.
What should not happen now is for Americans to breathe a sigh of relief and move on.
The debt limit itself needs to be scrapped. Enacted in World War I, it was created so Congress would not have to keep approving debt issuances. A century ago, the limit was set high to avoid hitting it. Over time, the debt ceiling took on a different role as a useful check on bipartisan spending largesse. It played a role in the 1990s in pushing lawmakers to reduce the national deficit and enact a balanced budget at the turn of the century. In recent years, as the normal budget process in Congress has broken down, the debt ceiling has functioned as one of the few moments of reckoning on the increasingly alarming fiscal outlook.
Almost no other nation has anything like a debt ceiling because it no longer makes any sense. Congress has already approved the spending that forced the debt to rise; there should be no question, much less the possibility of an economic cataclysm, when the bills come due.
This crisis may pass, but 2025 is coming soon.
* Guest editorial excerpt by The Washington Post.