“I had told her several times I had just a lot to do. I have a day job,” says Honeywell’s David Cote. “I don’t know which call it was — the third or fourth — where I said, ‘Okay, okay, I’ll contribute $1 million.’ ” He has also devoted a considerable amount of his time to the cause, recruiting fellow chief executives and traveling to Washington regularly to meet with policymakers.
To deficit hawks such as MacGuineas, the nation’s swelling debt has long posed an existential threat. Although the 44-year-old native Washingtonian has been preaching the gospel of fiscal restraint and responsibility for years, it was only recently that she moved to harness the cash and clout of Wall Street to bring it to bear in this Washington drama.
In the short five months of its existence, Fix the Debt — now 117 CEOs strong — has been invited on multiple occasions to the White House and met for hours with top congressional leadership on the budget. It has launched a national media blitz that has spanned Pandora stations and broadcast television with some of the $43 million raised by JPMorgan Chase Vice Chairman James B. “Jimmy” Lee Jr. and financier and former Obama “car czar” Steve Rattner.
It’s all to promote a message that, on its face, seems hard to argue with: Rather than backing any specific plan, the group simply wants a major, bipartisan deal to reduce the deficit by tackling taxes and entitlement. The White House has welcomed its commitment to higher tax revenue — even if that means higher rates — as part of a bipartisan “grand bargain.” Republicans appreciate the group’s commitment to spending controls.
“I’d like to think this is a new beginning for Washington and business,” says Aetna's Mark Bertolini. “It’s been a standoff for the last four years.”
Critics charge that MacGuineas’s campaign is simply a ploy by chief executives to push for lower corporate tax rates and head off automatic budget cuts in such areas as defense that would hurt their bottom line. Even fans of MacGuineas’s, including the American Enterprise Institute’s Kevin Hassett, argue that her campaign is giving cover to self-interested players who “wanted to look virtuous.”
Whatever their agenda, the CEOs have found in MacGuineas an obsessively nonpartisan, data-driven, well-connected champion of the dead-serious — and some would say eye-glazing — cause of fiscal responsibility. “What Maya stood for I felt was all the things really right about America,” Lee said.
Or, as Dave Cote put it: “Just do what Maya says.”
A self-described “die-hard independent,” MacGuineas grew up in Cleveland Park but insists that she had an “incredibly nonpolitical upbringing.” Her father was a lawyer, and her mother was a cultural writer who once wrote a food column for The Washington Post. (In 2009, MacGuineas herself served a stint on The Post’s editorial board, filling in for a writer on book leave). Although her parents resided well within the Beltway, “we never, ever talked about politics,” she said.
Instead, the young MacGuineas devoted herself to competitive running and trained with the boys’ varsity team as a sixth-grader, with aspirations of going to the Olympics. She enrolled in Northwestern as a math honors student but eventually turned to the social sciences, graduating in 1990 with a degree in economics and psychology.
After a brief stint at the Brookings Institution, MacGuineas spent two years as an equity analyst at Paine Webber. On Wall Street, she became fascinated with Clinton-era “bond vigilantes” who warned that traders would force borrowing costs higher if the United States didn’t reduce its budget deficit. She came away with a sense of foreboding.
“At first you can’t believe it could be true: Could you really be borrowing this money with no plan? You’re not investing it, you’re not growing the economy. Is it really as irresponsible as it seems?” she recalled thinking. “The answer is yes.”
MacGuineas enrolled in Harvard’s Kennedy School in 1995, where she met Alan Simpson, the retired Wyoming senator whose name would ultimately become synonymous with bipartisan, centrist deficit reduction as the co-chairman of Obama’s deficit-reduction commission. He is also a founder of Fix the Debt.
Simpson, who was guest teaching, recalls his former student. “We had discussions on everything — abortion, homosexuality, the Armenian genocide. Nothing is off the table, nothing is politically incorrect. She loved that,” he says.
Returning to Washington in 1997 with a Master’s, MacGuineas began working for the Concord Coalition, a group co-founded by Pete Peterson, the former Lehman Brothers CEO who had been bitten by the deficit bug a decade earlier. MacGuineas soon came to share his passion for reforming Social Security.
By 2003, when she took the reins of the Committee for a Responsible Federal Budget — another Peterson-backed group — MacGuineas had established herself as a budget expert among Washington’s policy elite. She tries to embody what her allies call “the sensible center”: the adults in a room full of partisan hotheads who grasp the real threats on the horizon and have the charts to prove it.
MacGuineas, who lives with her husband and two children in the Maryland suburbs, devised a Social Security reform plan for John McCain’s 2000 presidential bid, as well as a tax reform plan with famed Harvard economist Martin Feldstein. Op-eds, panel discussions, conference calls and appearances at congressional hearings soon followed.
“She’s someone who felt for a long time that she was screaming into the wind,” said Andy Stern, former head of the Service Employees International Union. (Stern is one of the few who has resisted MacGuineas’s pleas to join Fix the Debt. But he still takes her calls.)
“It pains me to say this, but a lot of times people find the budget boring,” she says in her office in downtown Washington. “We’ve been caring about this issue for decades, and everyone nodded politely and proceeded to ignore what we said.” Even now she worries that the fiscal cliff deal won’t be big enough to reduce the deficit in a meaningful way.
But in other ways, her persistence has paid off. Early in the Obama administration, MacGuineas met Sen. Mark R. Warner (D-Va.) during a panel discussion on the budget in which Warner talked about having to raise the retirement age for Social Security.
MacGuineas, who was moderating, was struck by the statement. “I’m just going to stop this panel for a moment, because I haven’t heard a sitting senator talk about fixing these fiscal problems in so long,” she said.
Warner said she grabbed him after the event. “‘Hey, you! You seem to get this stuff,’ ” he recalled. “We hit it off.”
That partnership took off after last year’s debt-ceiling debacle. Warner had become increasingly frustrated with business leaders who were sitting on the sidelines of the debate, even as a political game of chicken threatened to derail the entire economy. MacGuineas proposed organizing a dinner for CEOs, members of Congress and budget experts to create new momentum. Warner agreed to host the event at his Alexandria home in the fall of 2011. “We had it outside,” Warner said. “It was a tent revival feeling.”
Aetna’s CEO, Mark Bertolini, was one of roughly 60 people there. “This guy stands up, putting his hands on my shoulders, and it’s Alan Greenspan,” Bertolini said, referring to the former chairman of the Federal Reserve. “I thought, ‘Why am I here?’ These are all policy wonks.” A few months later, Bertolini was writing a check to Fix the Debt.
If MacGuineas has not become a household name, it’s by design.
In October, the Fix the Debt business leaders were invited to ring the opening bell at the New York Stock Exchange. Honeywell’s Cote tried to nudge MacGuineas forward: “You’re our leader. You need to ring the bell,” he said.
“No, you’re the one who made this happen, you ring the bell,” she answered.
They finally agreed to push the button at the same time for the allotted 15 seconds. But Cote’s finger stayed put.
“She had to remind me to take my finger off the bell,” he said. “She had the presence of mind to say, ‘Dave, we’re done.’ ”