Mutually assured destruction

By E.G. | AUSTIN

IT'S nice to start a week with news that Congressional leaders, so often criticised for senseless partisanship and saber-rattling, have come together to craft a thoughtful plan that will address a major problem facing America and, perhaps, the entire world. Or it would be nice, I imagine. This morning merely brings us news that Congress has cobbled together a deal to raise the debt ceiling in advance of tomorrow's deadline. Assuming it passes the House, the debt ceiling will be raised by $900 billion right away, with the borrowing offset by $1 trillion in cuts in discretionary spending over the next ten years—no new revenues, in accordance with the Republicans' demands. It also authorises Barack Obama to raise the debt ceiling by an additional $1.2 trillion later, which will allow the Treasury to pay America's bills into 2013, a priority for the president.

In the interim (by the end of the year) a bipartisan commission will be tasked with identifying an additional $1.5 trillion in "deficit reduction". If the commission cannot agree on a plan, their stalemate will automatically trigger some $1.2 trillion in cuts: largely to defence, but also to key non-defence programmes (with Social Security and Medicaid protected). The prospect of those cuts is meant to be so unpleasant as to force legislators to cooperate; and if they refuse, at least they won't take the global economy down with them.

The White House says the commission's discussions will include "tax reform", though John Boehner, in selling the plan to his Republican caucus, has focused only on more cuts. The expiration of the Bush tax cuts, scheduled for the end of next year, will loom over the talks. Their expiration is assumed as part of the CBO's baseline budget projection, so allowing them to expire cannot be counted as part of the $1.5 trillion in further savings. But the White House has indicated that the cuts will be used as "a motivational thing"—that is, if Republicans refuse to find alternative revenue streams, Mr Obama will veto legislation to extend the tax cuts.

The plan inspires no new confidence in our political leaders, but it is relatively clever. It's not ideal to galvanise cooperation by invoking the prospect of mutually assured destruction, but it may just work in this case.

The process that led to the deal may prove more important. Some believe the debt-ceiling saga will have emboldened rogue actors, in this case Republicans, to think that they can hijack the policy process. "By demonstrating that raw extortion works and carries no political cost," writes Paul Krugman, "It will take America a long way down the road to banana-republic status." The saga has certainly added an extra level of toxicity to America's already acidic political discourse. But the political costs have yet to be assessed; Republicans might get their come-uppance. In the meantime, party leaders must move on. Both sides believe themselves to be aggrieved, and dwelling on it will only allow the corrosion to continue.