The "fiscal cliff" deal was a thumb in the eye of deficit hawks everywhere. But it may have particularly stung for the campaign that had convinced CEOs to pony up more than $43 million to achieve a grand bargain to reduce the deficit, most immediately by using the fiscal cliff deadline as a springboard for action. What happened instead was a small-ball bill passed after the deadline that barely moved the needle on the long-term deficit.

The group stresses that it never expected a full grand bargain to happen before the Dec. 31 deadline—and that the fiscal cliff was never the focal point of its deep-pocketed campaign in the first place. "While it would have been nice to achieve some of its goals via the fiscal cliff vehicle, Fix the Debt never assumed that would happen and is implementing a plan to get a long-term solution enacted in 2013," says spokesman Jon Romano. "Our campaign is not and has never been focused around the fiscal cliff."

But there's no question that members of the campaign, along with other deficit hawks, had high hopes for the fiscal cliff as a turning point on the long-term budget. In the lead-up to December 31 deadline, the campaign's leaders called the fiscal cliff a "magic moment" that would compel legislators to hammer out a grand bargain on the deficit, in the words of Erskine Bowles, a co-chair of the Campaign to Fix the Debt. And they warned that the other side of the fiscal cliff deadline would be the kiss of death. "I think it would be insane to breach this fiscal cliff," said Bowles at a late November press event. "I think that will lead to chaos."

At the same time, the Fix the Debt group—along with other deficit hawks—stressed that the failure to achieve major deficit reduction would ultimately pose an even greater risk to the economy. "The risks are very high for doing nothing [on the deficit] in a very shaky economy," Wall Street financier Pete Peterson said in October. In his view, the danger of "kicking the can" could shake out in two ways: A full-blown debt crisis with a major market reaction or, "instead of a severe reaction, there is growing uncertainty," said Peterson, who donated $5 million to the Fix the Debt campaign. "There is no upside by doing nothing by punting."

In fact, Congress did end up going past the fiscal cliff deadline—at least by a nose—and passed a deal on Jan. 1 that ultimately did much less to reduce the deficit than either party had promised. In other words, it simply punted on the long-term debt, with some $650 billion in fiscal contraction instead of the multi-trillion dollar deficit reduction deal that both parties (and outside budget hawks) said they wanted. But because the legislation also avoided immediate austerity, the stock market surged, and the bond market held steady, suggesting that the deal—however disappointing—didn't damage the immediate prospects for the U.S. economy and the investor confidence in U.S. debt.

What did some of the country's most prominent deficit hawks make of this turn of events? First, they say that Dec. 31 was never a drop-dead date, so going past it by a day was never going to be the worst-case scenario. "We went off the cliff, and we didn't die. Nobody said we were going to die," said Tom Wilson, chair and CEO of Allstate, a member of the Fix the Debt group. "It was New Year's—there weren't going to be any consequences on Jan. 1," said former CBO director Alice Rivlin, another member of the group. "There was going to be an agreement to avoid the fiscal cliff," said fellow Fix the Debt member Judd Gregg, the former GOP Senator from New Hampshire. "The fiscal cliff was not the issue."

Secondly, they're advising against trusting the stock market as a gauge of the fiscal cliff deal's success. Rather, they say the drag is evident in terms of business investment and other decisions. "The people who say there's been no negative economic impact, they judged that by the stock market...that's not where we think about how the economy is doing," Wilson says. "That uncertainty continues to be an overhang in the economy is clearly having negative impact on people's decisions."

Budget experts like Rivlin are more circumspect: They acknowledge that the fiscal cliff deal did accomplish something, even if the change was incremental. And Rivlin admits that it is "very hard to answer" how much the dragged out attempt to shrink the budget is hurting the economy. "Nobody can really answer that question—the economy looks to me looks to be chugging along pretty well, given how much damage done to political system," Rivlin concludes.

Finally, they maintain that their call for major bipartisan deficit reduction is not a lost cause—and that the next round of negotiations over the sequester, debt-ceiling, and 2013 budget will be another big potential opportunity for a major deficit deal. "We need to get onto a sustainable track for the future. It doesn't mean that we have to do it tomorrow, the opportunity is this spring. If we keep fighting about this, the unsustainable budget, we just can't do anything else," Rivlin said. Certainly, the Fix the Debt group is trying to keep the cause alive: This week, it announced 40 more business leaders had joined, including the CEOs of JetBlue and LinkedIn.

Gregg, for one, believes that the Fix the Debt campaign has already been effective, despite the group's deep disappointment with the fiscal cliff deal. "It created the memo around which the debate occurred—we have an unsustainable debt situation," he says.

"I don't think [the fiscal cliff deal] proves that nobody cares and that nothing matters in Washington," Wilson adds. Did he feel as if the money that AllState contributed to the campaign had been spent in vain? "I would say we're not done yet, and we're not going away. The money's not all spent either," he concluded.

“Our work is just beginning. The Campaign to Fix the Debt has always assumed that addressing the country’s fiscal issues would be a long-term effort and has organized itself around building political momentum for getting a comprehensive fix completed during the first session of this new Congress," says Romano, the group's spokesman.