Image: Erskine Bowles, Alan Simpson
Alex Brandon  /  AP
Erskine Bowles, left, accompanied by former Wyoming Sen. Alan Simpson, co-chairmen of President Barack Obama's bipartisan deficit commission, gestures while speaking on Capitol Hill in Washington on Wednesday.
By Senior Correspondent
updated 11/19/2010 10:01:50 AM ET 2010-11-19T15:01:50

Just in time for Thanksgiving, Washington is serving up multiple deficit-reduction plans to an ungrateful nation. The rating system of, by and for the people seems to run a narrow gamut from starter course (as in 'needs wholesale changes') to completely indigestible.

True, we are only a couple of weeks out from our electoral apocalypse and the battle cries of the Tea Party and Club for Growth: Storm the Capitol, cut spending, cut taxes, stop creeping socialism in its tracks. But it turns out that the noise, and even the victories of so many of those candidates, did not reflect a broad public consensus.

Polls in the last six weeks have found anywhere from 3 percent to 27 percent saying the top focus of Congress ought to be deficit reduction. That's pretty puny compared to jobs and the economy, picked by more than half in several surveys. There isn't even agreement on the overall issue of whether to cut spending at all. A CNN poll this week found that 49 percent of Americans want more government spending and 49 percent want less. They do largely agree, however, on what not to cut — chiefly Medicare and Social Security, which have to be cut or the whole exercise is futile.

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The heroes of the deficit saga, if there are any in the end, will not be ideologues from the edges of the political spectrum. They will be sober-sided establishment politicians who understand that spending must shrink, revenue must rise and adopting a plan is absolutely essential. There is no way to please anybody, so they'll need to ignore everybody — put on their earplugs, their blindfolds and their bulletproof vests, and just get the job done. If it can be done.

"I've been through four really serious debt fights. This may be the toughest one" of the last 30 years, said Republican Steve Bell, a visiting scholar at the Bipartisan Policy Center whose resume includes stints as an investment banker and staff director of the Senate Budget Committee.

The problem is dire: The government is only taking in enough money right now to pay for Social Security, Medicare and Medicaid, and is borrowing to pay for everything else. Sticking to this path, we'll be paying $1 trillion in interest alone by 2020. Our accumulated national debt is $13.7 trillion and rising.

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On the table right now are five approaches to reversing the trend. They are framed by conservative Rep. Paul Ryan's plan, which includes private Social Security accounts and capped Medicare vouchers, and liberal Rep. Jan Schakowsky's plan, which includes lower defense spending and farm subsidies, a public health insurance option, and the sale of carbon pollution permits under a cap-and-trade system.

Then there are three bipartisan proposals. One from the Peter G. Peterson Foundation, the Pew Charitable Trusts and the Committee for a Responsible Federal Budget suggests spending targets backstopped by automatic cuts within a tighter, more disciplined budget process. It's intended as a bridge to the types of bigger changes advanced in the two other plans — just in case they don't materialize anytime soon.

The chairmen of President Obama's bipartisan deficit commission, former Republican senator Alan Simpson and Erskine Bowles, White House chief of staff in the Clinton administration, have made a big splash with a dramatic plan for the commission to consider in advance of a Dec. 1 deadline for its recommendations. An equally big splash came from a Bipartisan Policy Center panel headed by former senator Pete Domenici (a Republican) and former budget director Alice Rivlin (a Democrat).

Both plans would rein in Medicare, Medicaid and Social Security; cut other domestic spending; cut defense spending, and completely revamp the tax code (in part by sharply lowering rates and wiping out most loopholes). Rivlin-Domenici acknowledges the current recession by proposing a one-year payroll tax holiday for workers and employers, estimated to create 2.5 to 7 million jobs.

There are sticking points by the dozen, if not the score. Simpson-Bowles would raise the federal gas tax by 15 cents, raise the retirement age and reduce Medicare payments to doctors and hospitals. Rivlin-Domenici would impose a 6.5 percent "Debt Reduction Sales Tax," end the employer tax break for providing health insurance and encourage Medicare recipients to buy private managed-care plans.

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Beyond the individual points of controversy, there is the sheer size of each package and the interdependence of each element upon the others. The elements would be phased in, but as Bell said in an interview about the Bipartisan Policy Center plan, "we want everything passed at one shot."

The intertwined, systemic changes envisioned by these packages are reminiscent of the health proposals that consumed the first 15 months of Obama's term. They were passed as a package, but only at great political cost to the president and his party. Obama also signed an $814 billion economic stimulus bill and a historic overhaul of how Wall Street is regulated. So what are the chances for this latest massive undertaking?

Strong forces in play suggest that a grand bargain is attainable within the next few months, and also that it is not. On the side of getting a deal, there is already pressure from abroad. One Chinese rating agency, spooked by U.S. borrowing, last week lowered its rating of U.S. bonds. Bell called that "a shot across our bow."

A primary source of urgency is the looming congressional vote on raising the U.S. debt limit, so we can borrow more money and avoid defaulting on loan payments. The ceiling now stands at $14.3 trillion, which should hold us until spring or early summer. But many conservatives say they are opposed to raising the limit, and some even welcome the prospect of default. The increased Republican presence on Capitol Hill come January means the limit could very well be breached, setting off economic chaos at home and abroad.

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Would conservatives agree to raise the debt ceiling in return for a deficit-reduction plan with real teeth? Unclear, especially since there is such conflict over what should be in it. And deficit reduction seems to be low on the public's agenda. When people are worried about jobs and their personal finances, why would they welcome a debate over how to inflict more pain?

Time is short, perhaps too short in the view of some. Republican pollster Bill McInturff says change that big requires a long dialogue with the public — usually the high-profile kind that occurs in a presidential campaign. "It's hard to imagine a divided government having this dialogue with the American people over three to four months. I would just find that astounding if we could do that," he told me. That said, he called it "remarkable" that the discussion has begun.

Unveiling his plan with Rivlin the other day, Domenici sounded like a man ready to finish the discussion. America will "go to seed" if changes don't happen, he said. That's a near universal sentiment these days. Same with his statement that "this debt belongs to everybody now."

It's the next thing Domenici said that gave me pause. "It is our destiny to fix it," he said. In this time of partisan crusades and clashes, do political leaders believe that? Will they step up? Fingers crossed.

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