Editorial: Debt crisis averted, but real work ahead

Minnesota's state government shutdown battle between no-new-taxes Republican lawmakers and tax-the-rich DFL Gov. Mark Dayton foreshadowed the bitter debt-ceiling brinkmanship in Washington, D.C.

Now it looks like Minnesota's exit strategy -- a bad deal that beat no deal while kicking tough issues down the road -- is how the nation's political leadership will extricate themselves from a self-inflicted crisis brought on by Republican use of the debt ceiling as a weapon for the first time in history.

Late Sunday, President Obama and congressional leaders announced a deal expected to clear the U.S. Senate and House in time to avert a default today. The lopsided deal favoring Republicans ignores the nation's historically low income-tax rates in favor of an all-cuts approach that could further hamper a fragile economic recovery.

The agreement calls for about $900 billion in domestic discretionary spending cuts over 10 years, with another round of $1.2 trillion to $1.5 trillion in cuts depending on the recommendations of a bipartisan congressional panel whose 12 members are yet to be determined. In return, the debt ceiling is extended through 2012, one of the few positives for Democrats in this deal.

While those numbers sound impressive, the reality is that federal spending tops $3.4 trillion a year, so the cuts will be painful but won't even come close to balancing the budget.

Worse, the initial cuts will disproportionately come from a category of spending that includes scientific research, public health, national parks and other programs that invest in the nation's well-being and its future.

The deal hands off responsibility on three key drivers of soaring federal spending -- Medicare, Social Security, Medicaid -- to the bipartisan commission. Spending on these programs is not sustainable.

Letting the Bush tax cuts expire in 2012, for example, would generate an extra $4 trillion over the next decade, helping mitigate painful changes to programs so many Americans depend on.

If Congress doesn't act on the panel's recommendations, its inaction triggers meat cleaver cuts to two programs whose budgets need to be reined in with care: defense and Medicare.

Across-the-board spending cuts fail to account for national-security needs that change almost by the hour. Medicare cuts would target providers, meaning that more-efficient doctors like those in Minnesota would be hurt disproportionately.

The nation should heave a sigh of relief that a potential catastrophe has been averted. While Minnesota Congresswoman Michele Bachmann and former Gov. Tim Pawlenty recklessly dismissed the threat, the reality is that a default carried substantial risks: financial panic, a U.S. credit downgrade and chaos as the Treasury sorted through which bills to pay with 40 percent less revenue.

No one knew for sure what would happen, but there was no good reason to find out.

The debt ceiling will have to be raised again, and if it was a political football once, it will be a political football again.

Americans likely spent more time learning about and thinking about the country's fiscal situation in the last five days than most had in the last five years.

That's a good thing, provided they learned that our debt problem is substantial but solvable, and that it will be most easily remedied with a balanced mix of adjustments to both taxing and spending.

Former Minnesota Gov. Elmer Andersen used to say that a strength of American democracy was that if people got the facts, they generally would choose to do the right thing.

The next election should put that to the test.