Norquist Moves to Nix Bipartisan Debt Plan

Can the debt be brought down if the Congress sets targets for how it wants to do it in dollar amounts? That is the theory behind a new proposal offered by the Bipartisan Policy Center which some conservatives are already dismissing because it leaves revenue raising on the table.

On April 21, the Bipartisan Policy Center unveiled it’s new “SAVEGO” debt reduction proposal. The proposal is one of several competing ones being offered and attempts to address the nation’s long-term debt crisis. The designers of SAVEGO hope that it can be incorporated into congressional rules in the same way that the PAYGO rules were. The SAVEGO is not the only plan being offered, Senators McCaskill and Corker have offered their own plans and Senate Republicans have voted to support a Balanced Budget Amendment which constrained federal spending as a percentage of GDP.

The BPC plan was presented today by former White House Budget Director Alice Rivlin, BPC’s Debt Reduction Task Force members Joe Minarik and G. William Hoagland, BPC Senior Director Steve Bell. From the outset, Rivlin made clear that what set this plan apart from the other ones being offered on the table was that it was designed to empower Congress to set its own targets, make it clear what those targets were, and give congress the ability to act within what it’s members can do to meet its targets.

You have to control something controllable, when the triggering event is a deficit target it doesn’t work very well. [because Congress has limited power over how it sets what specific deficits will be] The lesson of the Budget Enforcement Act of 1990 which worked, was that it depended on things that Congress could control. They could cap spending, they could change entitlement legislation, [and] they could change revenue legislation.

SAVEGO does require the Congress to set a goal of what they want their debt target to be (in the materials provided by BPC, they chose reducing the debt 60% of GDP by 2021 as their example goal). What sets SAVEGO apart from other proposals is that Congress then has to determine by how many dollar amounts it will create savings in every year to reach. This process of choosing to save a particular amount of dollars as opposed to achieving, say a percentage figure, or a figure as part of a debt to GDP calculation is what sets SAVEGO apart. It’s easier for legislators to either raise revenue or reduce spending to achieve a particular dollar amount in savings.

The savings that would need to produced would be further sub-divided into three areas: discretionary spending caps, savings from health programs such as Medicaid and Medicare, and other non-healthcare mandatory spending. The enforcement mechanism for this plan would be to empower the OMB to sequester spending if Congress falls short, and to empower the OMB to sequester in all parts of the budget.

Why has Grover Norquist’s group, American for Tax Reform, already announced that it opposes the plan? Because the SAVEGO proposal does not specify how the savings need to be made, and in fact the authors made clear that the plan allows for savings to be made either by revenue raising or by spending cuts.

When asked about the reception that the plan has received when presented to some legislators, Steve Bell recounted the experience of meeting with the staff of a presumably conservative Republican senator:

We approached a Senator’s senior staffer, his response was ‘it has revenues in it?’ ‘Yes.’ ‘Not going to happen.’ A very short discussion.

Follow Noah on Twitter: @noahkgreen

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