That was the sound of Congress kicking the nation's financial problems down the road.
The “fiscal cliff” deal approved Tuesday night did preserve Bush-era income tax cuts on most Americans, while slapping higher rates on individuals making more than $400,000 a year and couples earning over $450,000. (Although take-home pay will shrink for many, anyway, since the payroll tax holiday ended. That 2-percentage-point jump will cost about $445 a year for those earning $30,000; $800 or more for workers earning $50,000.)
And the deal appears to have averted, for the moment, damage predicted for the U.S. economy had Congress taken us over the fiscal cliff.
But what the deal failed to accomplish was substantial.
It did little to address deficit spending, postponing the scheduled automatic spending cuts for two months. The nation's debt, which stood at $16.4 trillion yesterday, will continue to balloon.
Early analysis showed the cliff deal will increase tax revenues by about $620 billion over 10 years. But the Congressional Budget Office estimates it also will add $4 trillion to the debt during that time.
Total federal spending in 2012 was $3.6 trillion, or about 22.9 percent of the size of the entire U.S. economy. For the fourth straight year, that level of spending required a trillion-dollar deficit. Spending on entitlements has risen from less than half of total federal spending 20 years ago to nearly 62 percent in 2012. Three programs — Medicare, Medicaid and Social Security — accounted for about 44 percent of the budget.
To look at this another way, the tax increases implemented by Congress this week will raise about $62 billion a year in new revenue. But that amount is up against an annual budget shortfall of roughly $1 trillion. So without meaningful spending cuts, Congress and the president will fall roughly $940 billion short of solving just the current annual deficit spending problem.
While this week's deal dealt almost entirely with taxes, it's crucial that the next round deal squarely with spending. Our elected leaders might shy away from that, but the public should hold them to their responsibility. There will be more chances in the coming weeks to kick the can again or start solving problems:
>> Another vote to raise the nation's debt ceiling is coming. On Monday, the U.S. Treasury announced that federal borrowing had reached the limit, although there's room to maneuver for a few more weeks. A vote to raise the ceiling will come in late February or early March. Expect spending cuts to be a part of that debate.
>> The automatic spending cuts, called “sequestration,” were delayed but remain on the books. The 8 percent to 10 percent cuts were put there by a Congress that couldn't find a more analytical way of reducing spending. The cuts remain a powerful incentive for Congress to get serious about shrinking deficits.
>> Congress has failed to enact a formal budget for several years, meaning it runs on a series of temporary “continuing resolutions.” The current one expires in late March.
All of which means we're not done with this discussion. Which is a good thing, since every American's share of the nation's debt continues to rise. As of yesterday, yours was $52,330.