US budget: A messy deal in a messy political setting

GIVE it a B-minus. The US budget deal reached by congressional leaders has much for it to be commended. Its biggest virtue, assuming it's passed by Congress and signed into law by President Barack Obama, is that it will end the threat of a national default. The federal debt ceiling - limiting the Treasury's ability to borrow - will be waived until March 2017. Similarly, the possibility of a government shutdown, while not eliminated, should be vastly reduced, because Congress will have an agreement on total spending. This makes it easier to pass individual spending Bills.

There are also other plausible advantages. Spending caps regarded by many as too tight on both defence and non-defence outlays have been relaxed. The spending caps will increase US$50 billion in fiscal 2016 and US$30 billion in 2017. To minimise the impact on budget deficits, the deal makes modest cuts in other programmes and raises government fees and taxes. Unfortunately, these virtues come with some glaring vices that lower the deal's overall grade.

The largest is the absence of any serious public debate. What the country desperately needs - and has avoided for decades - is a genuine debate over the role of government. In the 1950s and 1960s, this seemed less important, because rapid economic growth promised steady increases in tax revenues to pay for new programmes. But now, slower economic growth and an exploding elderly population, raising the costs of Social Security and Medicare, have created a yawning gap between what people expect from government and what they're willing to pay in higher taxes. Hence, endless budget deficits.