Editorial: Crisis averted; debate remains

Congress apparently averted a reckless leap into the economic unknown Sunday by finally reaching a deal to cut federal deficits, raise the debt ceiling and avoid defaulting on the nation's obligations. The House approved the deal last night.

Federal spending has to be cut, and the $2.5 trillion Congress agreed to trim over the next decade is a start. The first step in its two-step approach would cut spending by nearly $1 trillion and increase the debt ceiling by $900 billion. The second would raise the debt ceiling another $1.2 trillion and create a bipartisan committee to recommend about $1.5 trillion in additional spending cuts to be presented to Congress for an up-or-down vote just before Christmas. The deal spares the nation another flirtation with default six months from now. That's reason enough for Congress to approve the legislation. However flawed it may be, the alternative -- a cash-strapped federal government that couldn't pay all its bills -- would be worse.

This prolonged dance with default has been damaging to the nation's reputation as the world's top economic power and a distraction from our intractable economic woes. And torn as ever by clashing ideologies, Washington still hasn't confronted the tough choices involved with reforming Medicare, Social Security and the federal tax code.

The deal cobbled together over the weekend left those contentious issues for later, in step two or, more likely, after the 2012 national elections. They won't get any easier and the politics could be even more polarized. But the penalty baked into the deal for failing to pass step two of the plan -- automatic, across-the-board spending cuts of $1.6 trillion over 10 years in military and other discretionary programs -- would be less destructive than default. And the timing ensures that taxes, entitlements, and the overarching battle over the size and role of government will be front and center in the campaigns for president and Congress.

That's a fundamental debate the nation badly needs to work through. But we can't allow it to remain the single-minded preoccupation it's been for the last few months. The economic challenges facing the nation go far beyond the federal government's fiscal problems.

Jobs are still missing in action. The housing market remains depressed. Wages have been stagnant for too long. The nation's infrastructure -- bridges, roads, power grids and the like -- is old and crumbling. Our students are lagging behind the global competition. The nation's oil addiction continues unchecked.

While Washington fought over spending cuts, the jobless recovery showed troubling signs of slowing even more than was previously apparent. The prospect of sliding into a double-dip recession is ominous -- and growing.

The debate the nation needs to have is what should be done to resolve our structural economic problems and then position the nation to prosper in the years and decades ahead. Indiscriminately throwing taxpayer money at the problems won't work. Neither will merely shrinking the federal government. Washington needs to end its debt ceiling crisis and move on to more serious business.hN