Searching online for the word “compromise” returns many results that seem to despise the very idea of it. It appears as if “afflicted by compromise” or “ignoble truce” are the kinds of slogans that Congress, too, has been living by for far too long.
However, finally, financial sanity seems to have prevailed with the latest action, namely the 332-94 vote on an amendment to “House Joint Resolution 59” (http://goo.gl/OTaEk9).
The budget resolution provides for continued government spending through 2015 while reversing some of the debilitating unintended consequences of the automatic across the board cuts known as sequestration.
This modest step in the right direction was made possible by skirting some of the most difficult budget issues, such as the projected long-term cost explosions of major entitlement programs and revenue shortfalls.
However, it may provide Congress with the breathing room needed to step back from partisan warfare and get down to the complex task of governing the nation’s financial future.
The non-partisan Congressional Budget Office just published an analysis of the amendment (http://goo.gl/wQhoIK). According to the CBO estimates, the legislation would increase “discretionary outlays by roughly $62 billion” over the period from 2014 to 2023.
Most of the additional spending ($48 billion) would occur in the next two years.
Notably, the bill does not address the looming deadline for extended unemployment compensation benefits, which are to expire at the end of this month.
It is likely that separate legislation will be introduced to address this in order to prevent more than a million unemployed Americans from having their benefits cut off during the holidays. However, the prospects of such legislation are uncertain.
Also, the current resolution increases “the contribution rate that federal employees ... pay toward their future retirement benefit” for those that are hired after 2013. Moreover, it reduces “the annual cost-of-living adjustment (COLA) for military retirees under the age of 62.”
Another revenue generating item in the resolution is the increase in “security-related fees charged to air passengers.”
As much as one can find fault with any of the provisions that are included in these resolutions or the ones that one would have liked to see included, the biggest value of the “compromise” is its very existence.
It takes off the table for the foreseeable future the kind of government shut-down scenarios that needlessly hurt the economy by making planning difficult for firms and households alike.
Of course, there may still be yet another silly debt-ceiling fight in the cards (perhaps in late February or early March according to current spending estimates).
However, the current budget resolution creates hope that Congress has learned from the experiences of this year. Specifically, the people’s representatives may have realized that playing havoc with the country’s economy by moving from one financial crisis to another only serves to diminish the standing of Congress in the eye of the public.
So, no matter what you might find about the pitfalls of “compromise” online: As far as governing the nation’s finances is concerned, this compromise is simply a return to sanity that may provide room for the needed and more serious debates about entitlement and taxes.
Or, as one proverb puts it: “Compromise, if not the spice of life, is its solidity. It is what makes nations great and marriages happy.”
Well said.
Dr. Michael Reksulak has taught economics and public finance in Georgia Southern University’s College of Business Administration. He can be contacted at MReksulak.SMN@gmail.com.