It was a terrible process but a good result. The agreement creates room for the private sector to continue to grow, without the threat of default and the burden of higher interest rates. It locks in at least $2 trillion in long-term savings from cuts in government spending, but those savings are phased in gradually to avoid hurting the economy in the near term. A congressional committee with fast-track authority will have a Nov. 23 deadline to recommend a balanced package of long-term reforms. The agreement creates a strong incentive to compromise: If the committee fails to reach agreement or Congress fails to act on the recommendations, government spending will automatically be cut by $1.2 trillion. These broad, automatic cuts, timed to coincide with the end of the Bush tax cuts, will make it harder for Congress to choose inaction over compromise. The agreement removes the threat of default and lowers the prospect of using the debt limit as an instrument of coercion. — Timothy Geithner, secretary of the Treasury
In the debt-ceiling melodrama, the president and tea party each had political objectives and national interests to serve. Politics won out. The deficit-reduction compromise reached by the president and congressional Republicans makes spending cuts of about $1 trillion over 10 years across all areas of government except the two areas creating the biggest problems — Social Security and accelerating Medicare and Medicaid costs. The deal establishes yet another blue-ribbon panel of senators and representatives to find another $1.5 trillion. If successful, the federal government still would be left with annual deficits much greater than $1 trillion a year — more than increased taxes can erase and certainly big enough to ensure a downgrade by credit rating agencies. The president and the tea party got their victories, but Americans will remain besieged by slow growth, high unemployment, stagnant wages and a government too expensive for its citizens to bear. — Peter Morici, University of Maryland
