California did it; so can D.C.

This Op-Ed has been updated to reflect passage of the “fical cliff” bill.

Congress may have avoided certain disaster on Tuesday, but the plan that was passed does little to get the country back to a functional system of budgeting that doesn’t involve chronic deficits. So what would that take? Republicans will have to recognize that raising taxes on high-income earners is a necessity. Democrats will need to agree to budget cuts and entitlement savings.

That may sound impossible, but recent history demonstrates it isn’t. In California, just four years ago, despite fervent partisanship the equal of that in Washington today, the Legislature made just such compromises.

In 2009, months after the Wall Street collapse, California’s budget deficit had ballooned to $42 billion, or nearly half the overall state budget. There was no amount of cutting that could cover such a deficit, nor could state residents shoulder the kind of huge tax increases it would take to eliminate the red ink with more revenue alone. Yet Republicans and Democrats were adamantly committed to their principles of not raising taxes and not cutting social services, respectively. It appeared to be a deadlock, and the state seemed to be heading toward disaster.

By mid-February 2009, months before the state’s budget deadline, time had almost run out. The bond markets were nearly frozen. The state was days away from being unable to meet its obligations to local governments, school districts and vendors. Wall Street would soon stop lending California the billions of dollars it needed for day-to-day management of public safety and other key operations.

The choices were narrow and the politics ugly, and the four of us — as leaders of our parties’ delegations in the Assembly and the state Senate — were right in the middle. Both Dave Cogdill and Mike Villines were as conservative and anti-tax as Karen Bass and Darrell Steinberg were liberal and reluctant to cut, especially if it involved the safety net for the poor and the needy.

We spent weeks in early February with Gov. Arnold Schwarzenegger and together concluded there was only one way out: Both sides had to cross over and vote for budget solutions antithetical to our interests and desires.

There was no great “kumbaya” moment. The negotiations were difficult, exhausting and extremely frustrating. Each side sought a little more of one solution and a little less of the other. But over time, the four of us, all with different backgrounds and beliefs, went from being suspicious of one another to developing a strange but genuine camaraderie as we pulled the budget deal together.

On Feb. 21, 2009, without a single vote to spare, the Legislature mustered the two-thirds vote necessary to both raise taxes temporarily and make deep cuts across all areas of state government. California never defaulted on its obligations.

The California budget crisis did not end there. The 2009 accord was essential, but it was just a beginning. Nearly four years later, after more painful cuts and a voter-approved tax increase, the California budget is virtually balanced. Gov. Jerry Brown and California are considered one of the comeback stories in the nation.

Because this story is true, it didn’t have a completely happy ending for its main characters. Two of us (Cogdill and Villines) lost our leadership positions. The other two (Steinberg and Bass) were heavily criticized for the depth and magnitude of the cuts we agreed to. Still, though we all can point to aspects of the agreement we wish we had negotiated differently, none of us regrets the overall decisions we had to make.

Our story and the current federal crisis are not identical. But we tell this story because the current circumstances are close enough. Sometimes what matters most is the future of the state or the nation.

Darrell Steinberg is the president pro tempore of the state Senate. Karen Bass is a member of Congress and former Assembly speaker. Dave Cogdill is the assessor of Stanislaus County and former Senate Republican leader. Mike Villines is a business owner and former Assembly Republican leader. The four were winners of the 2010 John F. Kennedy Profile in Courage Award.