In the end, the Republicans blinked first.
The last-minute deal to end the government shutdown and extend the debt ceiling gave President Obama what he wanted. It restarted government operations that had been stopped, it allowed the government to make loan payments for spending Congress had already authorized, and it left the health reform law virtually unchanged and still fully funded.
The Republicans got nothing except an agreement to require people seeking subsidies for health coverage to verify their income — an innocuous change that should have been in the law to begin with. Senate Minority Leader Mitch McConnell tried to put a good face on the deal he hammered out with Majority Leader Harry Reid, noting that it left in place spending cuts negotiated with Obama and Congressional Democrats two years ago.
"And we're not going back on that agreement," McConnell declared. That sounded good, except that no one had asked them to.
The entire debacle was engineered by House Republicans, who sent the Senate a spending bill that funded every government program except the health care reform law they call "Obamacare." When the Senate refused to consider it, the standoff was on.
Now that the Republicans' exercise in futility is over, Congress must get to work on a budget agreement both parties can live with in time to prevent another shutdown by the newly agreed-upon deadline of Jan. 15. A House-Senate conference committee chaired by Senate Budget Committee Chairwoman Patty Murray, D-Wash., and her House counterpart Rep. Paul Ryan, R-Wisc., has until Dec. 15 to report back with a plan.
Despite the hyperventilating rhetoric of many Republicans about the national debt, the nation's finances are actually improving over the short term, and not everyone agrees the situation is as dire as the conservatives make it sound.
It's important to understand that the federal budget deficit and the national debt are two very different things, although they are connected.
The deficit is the difference between how much money the government takes in each year and how much it spends. Since the automatic spending cuts known as the sequester took effect, combined with other spending cuts and the economic recovery, the deficit has been shrinking steadily, and by next year is projected to be 4 percent of GDP, a lower percentage than that of most other industrial nations. The deficit is projected to continue to drop, bottoming out in 2015 at $378 billion, which will be 2.1 percent of gross domestic product, according to the Congressional Budget Office. That's down from a high of nearly $1.5 trillion in 2009, or 10.1 percent of GDP.
At the same time, the national debt, which stood at $11.3 trillion in 2012, continues to grow, and will do so as long as any budget deficit remains. The debt can't shrink until there is a surplus, which hasn't happened since 2001.
Congress' job now is to figure out ways to reduce the debt without harming the economic recovery — not an easy task. Not surprisingly, the parties disagree on how to do that.
The American public has largely lost faith in the ability of Congress to accomplish anything at all. It would be nice to see lawmakers prove the voters wrong and hammer out an agreement that will keep the government operating and the economy on the path to recovery.