Howard Gleckman parses the bill that the House will vote on today. He notes that it “effectively would do nothing to reduce the deficit—the stated goal of many Republicans—or stimulate economic growth—the wish of many Democrats including President Obama”:
However, it would break—temporarily at least– the cycle of fiscal brinksmanship that has largely paralyzed Washington. The constant threat of government shutdowns—and the reality of one last fall—created uncertainty in the business community, made it impossible for the Federal Reserve to begin slowing its bond buying program, and completely disrupted other policymaking. If this deal is accepted, there will be no more shutdowns until at least October, 2015.
Cassidy zooms out:
[P]erhaps the most stark reminder of how things have changed in Washington over the past few years is to look at the revised spending figure for discretionary spending in fiscal 2014—the one agreed upon by Ryan and Murray, which includes the give-backs from the sequester. It’s $1.012 trillion. (This number doesn’t include mandatory spending on Medicare, Social Security, or interest payments on the national debt.) That’s slightly more than the Republican negotiators wanted. But as Stein and Linden point out in a chart accompanying their analysis, it’s twenty-seven billion dollars less than Ryan proposed in his 2011 budget, which, at the time, was widely agreed to be so draconian it was unrealistic.
Neil Irwin’s analysis:
What matters is that under the deal, fiscal policy still be a drag. It just will be less of a drag than it would be otherwise.
Economists at Barclays, for example, now think that tighter federal spending will reduce the overall growth rate in 2014 by 0.25 percent, not the 0.5 percent they estimated previously. In other words, at a time of high unemployment, falling deficits and low interest rates, budget-cutting is still making the economy worse than it otherwise would be. But with this deal, Washington policy will be less counterproductive than it otherwise would be.
Philip Klein has reservations:
The actual numbers of the deal are less significant than the fact that the deal is undermining sequestration, which had been touted as Republicans’ biggest success in limiting government spending since gaining control of the House in 2010. If, in response to pressure from defense industry lobbyists and other special interest groups, Republicans and Democrats have agreed to undo sequestration for the next two years, why should conservatives be confident that they won’t do the same thing two years from now?
Reihan defends the defense spending tweaks:
The biggest and most important aspect of this package is that it spares the military from poorly-designed front-loaded cuts that might severely degrade U.S. capabilities. These is a reasonable long-run case for defense austerity, but sequestration actually protects the spending that needs to be reformed most (virtually all costs associated with personnel) while targeting important capital investments. It’s amazing that congressional conservatives need to be reminded of this, but rival powers are making substantial investments in precision-guided munitions and other technologies that are designed to counter the U.S. military’s traditional approach to projecting power. If we do not make investments of our own, our ability to defend our interests will deteriorate much faster than you might think. This is not a joke. One gets the strong impression that Paul Ryan understands that this is not a joke.
Yuval Levin supports the agreement:
By now even the people who argued most fervently for insisting on defunding or repealing Obamacare in the last budget battle have acknowledged they didn’t really believe that could happen in such a fight. Simply doing it over won’t change the players or the circumstances, however much we might wish we could change both, and won’t advance the conservative cause.
A deal that keeps in place 92 percent of the sequester, replaces the rest (and adds more savings) with fairly durable mandatory savings and other small reforms, and avoids the tax increases the Democrats want would, I think, advance that cause a little.
Daniel Gross tries to look on the bright side:
An increase of $45 billion in spending isn’t exactly New Deal 2.0. We still don’t have a much-needed infrastructure spending bill. And Congress, even as it giveth, will taketh away: extended unemployment benefits for those hit hard by the recession are set to expire in January. Since the deal excluded an extension of those benefits, about 1.3 million people are set to lose a vital form of income support in a matter of weeks. Food stamps have already been cut, and congressional Republicans are hell-bent on cutting them further. The combination of those two actions will reduce the spending power of those at the lower rungs of the income ladder, and will negate a portion of the gains reaped from easing the sequester.
Even so, we should applaud this very small-bore deal. After a few years in which Washington has exerted a malign force on demand, it is showing signs of becoming a neutral force. We’ll take what we can get.