Budget deal brings chance for fresh start
THE U.S. House of Representatives has finally approved a federal government budget, the first in nearly five years. Our nation's government has been running, when it's running, on continuing resolutions since October 2009.
A complete lack of planning, lack of certainty and lack of quality leadership during the period sent signals of uncertainty to markets, investors and allies and served to ensure that the economic recovery was slow and fragile.
After four years of, to use the Washington cliche, "kicking the can down the road," the House has finally picked up the can and, pending Senate approval, will intentionally carry it for another 21 months.
An approved budget provides financial certainty for the first time in years. The Department of Defense will be able to count on a set amount of funding and military families won't have to worry whether their pay is suspended during another government shutdown, scientists conducting critical research will know they have funding for the period and program planners can actually plan their programs.
That's the good news. The bad news is the federal government under this plan is still spending too much money. While the new budget brings in savings of $85 billion over 10 years, it nudges the deficit higher each of the next three years.
The nation's most recent period of sustained economic growth - from 1991 to 2001, came after Congress responsibly controlled government spending and eventually eliminated the deficit.
But new deficits brought first by President George W. Bush and expanded by President Obama changed a cyclical downturn in the economy into the lingering Great Recession. The recovery from that recession is still extremely weak due partly to deficit spending.
While some believe the answer is simply raising taxes on the wealthy, many rightly fear that higher taxes will further restrict economic growth.
There are no easy answers. And no one group will be 100 percent satisfied with any budget deal. But lawmakers should look at this as a fresh start - a new period of certainty that can improve investor confidence and usher in greater economic growth - which brings in more tax revenue.
And while the congressional leadership will have extra time because they won't be dealing with continuing crises, they need to right the ship and propose long-term solutions that will get the U.S. out of deficit spending and adopt policies that grow the middle class by stimulating the economy instead of stifling it with new taxes and new rules.