Posted May 24, 2011
By Laura Hall, with Loren Adler and Shai Akabas contributing
House Minority Whip Steny Hoyer, in a speech at the Bipartisan Policy Center (BPC) on Monday, issued a strong call for a balanced deficit reduction agreement similar to the plans put forward by President Obama’s bipartisan fiscal commission and the BPC’s Debt Reduction Task Force. He noted that both plans “place a high priority on fairness, and strike a … more even balance between cutting spending and raising revenue.”
Hoyer further explained that, in addressing our debt, a solution needs to contain “at least five elements: deficit-reducing tax reform; cuts to discretionary spending, both defense and non-defense; action to keep our entitlements strong; a failsafe mechanism; and fairness for all Americans.”
Specifically, Hoyer praised the BPC’s Save-as-you-Go, or “SAVEGO,” budget process mechanism, which would compel policymakers to achieve deficit reduction immediately and for years to come.
SAVEGO, which was developed by Senator Pete Domenici, Dr. Alice Rivlin, and other budget experts associated with the BPC, has also garnered praise recently from The Washington Post editorial board, who called it a “smarter, more balanced approached” than the other proposals on the table, and David Brooks, who explained that SAVEGO “is like the pay-as-you-go rules that restrained spending and debt in the 1990s, only it is much tougher.”
The SAVEGO mechanism requires Congress and the president to achieve specific, annual dollar amounts of budget savings in each of three categories: discretionary (domestic and defense) spending, health care spending and other entitlement spending, plus revenue. To encourage policymakers to act, it also includes sequesters that will achieve the required savings if the president and Congress fail to act on their own.
While supportive of efforts to address our large deficits, Hoyer still made very clear that his colleagues in Congress should raise the debt limit well ahead of the August 2nd debt ceiling deadline in order to avoid disruption to financial markets.
Throughout the speech, and in a brief question and answer session afterwards, Hoyer emphasized that, in the fight to reduce America’s debt burden, every option must be on the table – including cuts to non-defense and defense discretionary spending, entitlements, and tax reform to both cut rates and raise new revenue. He indicated that belt tightening would require sacrifice from both sides of the aisle, and that any comprehensive plan to address our debt problem must have bipartisan support.
In conclusion, Hoyer praised previous bipartisan action on the debt, and issued a call to his colleagues to follow in the footsteps of previous political leaders and address our growing national debt in a bipartisan manner.
“In times like these, when our nation’s problems grew too grave to ignore, leaders on both sides of the aisle have come together to restore our fiscal health and protect the programs that Americans value. Ronald Reagan and Tip O’Neill did it. George H.W. Bush and Dick Gephardt did it. Bill Clinton and Newt Gingrich did it. Despite their wide differences, they agreed that the challenges they faced were too big for either side’s political bromides—as they are today.”
Economic Policy Project