I had the pleasure of listening to Congressman Pat Tiberi today at lunch.

He made several very good points about what he called the important "ideological debate" going on in Washington, D.C.

As Tiberi noted, three things are going on at the same time. 

First, there is the debate over the Continuing Resolution for this year's budget.  The FY 2011 budget should have been passed last year.  It wasn't passed because even though the Democrats were in charge of the House, the Senate and the White House, they couldn't agree on a budget (or any other appropriations bill for that matter).  So a Continuing Resolution was passed and we just had a battle over that budget which resulted in a $39 billion spending cut (measured against the FY 2010 budget):


Wall Street Journal graphic.

Second, there is a debate over next year's budget.  Republicans in the House will be presenting a widely heralded, historic and controversial budget (explained here and here).  Obama will also be presenting a revised budget proposal this week.

Third, there is a debate over raising the debt ceiling which House Republicans are trying to tie to some sort of future spending caps (see story here):

"Republicans liken the debt ceiling to a credit-card limit and say the U.S. needs to start living within its means. Democrats also use the credit-card analogy, but say the U.S. needs to pay the interest on money it has already spent.

A sense of urgency about the debt ceiling has grown at the White House and officials are moving aggressively to seek a deal with Congress. The Treasury says the U.S. will hit the debt limit no later than May 16 and could default by July 8.

In public, however, they've criticized Republicans who say they'll vote to raise the debt ceiling only in exchange for deficit-reduction measures. White House officials said Monday their preference is to have a vote to raise the debt ceiling with no other strings attached."

These three things represent an important "ideological debate" according to Tiberi - and I believe that he is right.

The debate, in my mind, centers around these questions:

Is business important as a creator of jobs and economic growth or as a source of tax revenue?  This will come up again and again as the corporate tax rate is discussed (see here and here) and your perspective on this question is important.  As Tiberi noted our corporate tax rate is embarrassingly high.  The high corporate tax rate flows from the business-as-a-source-of-tax-revenue philosophy. 

Whence comest growth?  Government or business.  This is an important part of the debate and many in Washington would have us believe that growth comes from government pulling levers and incenting activity.  Others would argue that sustainable economic growth comes from businesses creating value and growing within a non-punitive tax and regulatory climate.

Is money better spent by individuals or by Washington? 

Which answer prevails makes all the difference in the future.