Congress's Big, Stingy Christmas Mistake

For the past few years, Congress has functioned as a millstone weighing down the country’s recovery. The combination of austerity, manufactured crises, and a partial government shutdown has slowed economic growth. That’s why the modest two-year budget deal that congressional negotiators announced on Dec. 10 to lift some of the automatic sequestration cuts is such good news, despite the criticism it’s drawing from budget scolds who want something bigger. The October shutdown cut projected fourth-quarter gross domestic product growth by about 0.3 percentage points, according to an Oct. 19 Bloomberg News survey of economists, while Republicans’ default threats briefly pushed up U.S. bond yields across every maturity, raising borrowing costs and adding to the debt. Simply avoiding another shutdown and default scare will leave Americans better off than they would be otherwise.