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A debt fix to believe in

By Maya MacGuineas, CNNMoney guest columnist

Commentary: Maya MacGuineas is the director of the fiscal policy program at the New America Foundation.

It was a gut wrenching roller-coaster ride of a week for anyone who followed the deliberations and votes of the Bowles-Simpson fiscal commission.

Would 14 members sign on to formally send the plan to Congress? (That was never going to happen.) Would the two co-chairmen, Erskine Bowles and Alan Simpson, make like Thelma and Louise and jump off the ledge alone?

Or, would they get a solid bipartisan majority? Unbelievably, that's what happened. (Rundown on the plan)

Let me start by saying -- and call me a cynic -- that I never thought the National Commission on Fiscal Responsibility and Reform would amount to much of anything.

President Obama put it in place, it seemed, just so he could do nothing until after the election and still be able to point to the never-expected-to-succeed commission as proof he was taking action.

Then he gave it a nutso mandate: Come up with 14 out of 18 votes so the lame-duck Congress would take an up-or down-vote. That threshold was out of reach, considering that some members were polarizing figures who didn't seem very committed to the commission's success.

And a vote in the lame-duck? When everyone knew the midterm elections were going to produce massive change on the Hill? That's not how to build support for incredibly tough choices that not only have to pass, but have to stick for decades.

So off the commission went with its impossible mission. But then an amazing thing happened.

Bowles and Simpson came up with an initial plan, and it was really ... really good. It did everything the country needs to do. Cut defense. Fix Social Security. Put health spending on a strict diet. Reform the tax code. Raise the gas tax.

And it found savings of nearly $4 trillion.

That opening Bowles-Simpson plan was remarkable. I thought they might as well go home because that was where the story should end. After all, it would only go downhill after that.

Bowles and Simpson then spent the subsequent weeks in shuttle negotiations to build support from other commissioners. I assumed they were watering it down and caving to individual interests, members' fears and political bullies.

And then they came out with another plan. And it was really ... really good. Watered down? Ha. In some areas it was even better.

But the most amazing thing of all was the support it got.

Not only did 11 of 18 members support it -- a bipartisan super majority. More than a few lawmakers on the commission, knowing full well they would get heat from all sides, showed true leadership and courage and lent their support.

Sens. Judd Gregg, Kent Conrad, Tom Coburn, Michael Crapo and Dick Durbin, and Rep. John Spratt, all deserve a standing ovation. Cheesy, I know, but I can tell you there were more than a few C-Span viewers --including this one -- who shed a tear. (Panel members: Full list)

The way forward

So where from here?

It looks like the House is poised to continue its posturing and political negotiating instead of moving to the next phase of cooperating. Note to lawmakers: The markets are increasingly uneasy about debt problems in Europe; the possibility of contagion is simmering.

Obviously, the president has to get in the game. He cannot expect lawmakers to make all the hard choices without showing that he is willing to do the same. And while his proposed public sector pay freeze is a savvy small start, it will take much more than that.

Obama will have to say directly that we should cut discretionary spending, raise the retirement age, eliminate the bulk of "tax earmarks" or take other such measures.

The real hope, I think, lies with the Senate.

The commission members who supported the plan are true leaders, not just on fiscal issues, but to the left and the right in their respective parties.

Those senators will have to make the case to their colleagues. Yes, this plan -- or a similar one -- is imperfect. Yes, it is filled with things we all hate. Yes, it is politically risky. But it is critical to securing the nation's fiscal and economic future.

Policy changes will have to be made to get more support. Here are a few suggestions:

Both sides seem to agree we have to do more on health care. Everyone needs to be reassured that the tough choices, once made, will stick. This is particularly important so that neither side feels they gave too much on spending or taxes while the other pulls back, and will require tough new budget enforcement measures and new sets of automatic triggers.

And outdated, inefficient and unnecessary programs have to be identified and eliminated -- both to reduce the deficit and to make room for necessary investments.

But the bottom line is that for the first time, in a very long time, we have seen a remarkable demonstration of political leadership around the debt crisis. And for the first time, in a very long time, it appears that the United States is poised for a fiscal turnaround.

It ended up being a great week. To top of page

Index Last Change % Change
Dow 17,831.46 19.27 0.11%
Nasdaq 5,121.34 18.53 0.36%
S&P 500 2,091.46 2.32 0.11%
Treasuries 2.23 -0.01 -0.62%
Data as of 12:00pm ET
Company Price Change % Change
Pfizer Inc 32.97 1.00 3.13%
HP Inc 12.66 -1.99 -13.56%
General Electric Co 30.44 -0.21 -0.70%
Bank of America Corp... 17.41 -0.06 -0.34%
Freeport-McMoRan Inc... 8.41 0.11 1.28%
Data as of 11:43am ET


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