07/15/2011 04:50 pm ET Updated Sep 14, 2011

Simpson-Bowles Revisited

President Kennedy used to tell the story of the Chinese leader who said, "Look, there go my people. I must find out where they are going so I can lead them."

It is easy enough to lament the lack of leadership in the present crisis, but leaders can lead only when they have followers. President Obama made a good speech last week calling for a compromise solution to reduce the deficit, including reductions in Social Security and Medicare spending. Speaker of the House John Boehner responded in a thoughtful and balanced way. For a moment there, they seemed like President Reagan and former Speaker of the House Thomas "Tip" O'Neill putting aside their differences to do what was best for the country.

But Obama and Speaker Boehner quickly discovered they were out there all alone. President Obama's constituency remains opposed to any significant reduction in entitlement programs, and Boehner's is equally opposed to tax increases. As the drop dead date for default draws closer, a solution is slipping further away. The suggestion by Senate Majority Leader Mitch McConnell to simply allow President Obama to raise the debt limit was dead on arrival.

Obama's big mistake was not embracing the recommendations of the Simpson-Bowles report last December. Had he got behind his own commission then, he might have been able to build up some momentum for dramatic action now. But the moment for dramatic reform like the President's $4 trillion budget reduction scheme has passed. Positions have hardened. The best we can hope for now is a much more modest plan to get us past the present crisis and - yes -- kick the real issue down the road a bit further. But not much further.

We should pursue the approach used to close military bases back in 1988. It was a volatile issue. All senators and congressmen defended their military bases. A bipartisan commission recommended closure of a significant number of military bases that it deemed unnecessary, and Congress was forbidden to dicker with the choices. Congress could have voted the plan down with a two-thirds vote, but was unable to do that. The bases were closed, saving billions.

Similarly, the President and congressional leaders should cherry pick some significant spending cuts from the Biden efforts, including defense and some entitlement programs, and enact them along with an increase in the debt limit. To address the longer term, more controversial spending and tax issues, this legislation should also include a new Simpson Bowles Commission, comprised much like the previous one, charged to develop a similar package of recommendations, but giving them some teeth. Like the base closing plan, Congress would need a two-thirds vote to overturn the commission's recommendations. The three-to-one ratio of spending cuts to revenue increases reflected in current budget negotiations should be the guiding principle.

Of course, partisans of left and right will howl, but that is all right. Howling makes them feel better and is good for the lungs. We have to do something, and given the impasse we have right now, this is a sensible two-step plan to get the country back to fiscal health.

Jerry Jasinowski, an economist and author, served as President of the National Association of Manufacturers for 14 years and later The Manufacturing Institute.