Recent Budget Deal a step in the Right Direction -- But Hard Work Still Ahead to get our Fiscal House in Order

Press Release

The federal debt now stands at more than $14 trillion and climbing. Since 2009, annual budget deficits have topped $1 trillion and estimates indicate that trillion dollar deficits will continue at least through 2012. It is against this backdrop that Congress and the White House negotiated to cut almost $40 billion in government spending and avoided a government shutdown late Friday night.

But let's be clear, given the size of our projected budget deficits and mounting federal debt , as down payments go, the agreed to cuts are pretty puny -- just under three-tenths of 1 percent of the $14 trillion debt. It's more like earnest money: an act to show good intent but not enough to show commitment. So, we still have some work to do.

Small though it is, the agreement represents a change in direction. The $40 billion in cuts are real, not some gimmick where shaving off a piece of increased spending is characterized as a decrease.

Still, the professional spinners tried to frame this debate for being anything but what it was. Some said this was about social issues, such as women's rights, or political games to skewer opponents. Don't let yourself be fooled. This is just dust that's being tossed in our eyes to make us blink.

This debate turned on the single issue of the federal government's runaway spending, carried out under the cover of "investing." Most rational people agree that we have to reduce spending by trillions of dollars in order to get a handle on federal spending. But, we were forced to the brink of a government shutdown to get the other side to agree to a mere $40 billion in budget cuts. This is not an encouraging sign for when discussions go from cutting billions of dollars to trillions of dollars.

Recently, President Obama announced that he would be addressing the American people about the need to get serious about the federal debt. It has been rumored that he might even offer a plan to move us forward along the path to fiscal sanity. I look forward to hearing his plan and I hope he will chart a path to consensus that builds upon the momentum of the most recent cooperation that averted the government shutdown.

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