Bipartisan Policy Center Releases New ‘SAVEGO’ Budget Proposal

Reforms developed by former Senate Budget Committee Chairman Pete Domenici, former White House Budget Director Alice Rivlin and other leading budget experts


Contact: Ashley Clark, Press Secretary
(202) 637-1456

Thursday, April 21, 2011

Washington, D.C. – The Bipartisan Policy Center’s (BPC) Debt Reduction Task Force today released its new Save-as-you-Go (SAVEGO) proposal, a new budget enforcement process that would address the nation’s impending debt crisis by achieving budget savings immediately and in the future. Former Senate Budget Committee Chairman Pete Domenici and former White House Budget Director Alice Rivlin, co-chairs of the BPC’s Debt Reduction Task Force authored this proposal with Task Force members Joe Minarik and G. William Hoagland, BPC Senior Director Steve Bell, and Debt Reduction Task Force Director Chuck Konigsberg, all of whom have been integrally involved in similar process reform efforts over the past 25 years.

The BPC’s SAVEGO mechanism would set annual savings targets to put the nation on a path to fiscal stability, and mandate automatic spending cuts and reductions in tax expenditures or other revenue increases if Congress fails to achieve those goals. Under SAVEGO, Congress would set forth the year-by-year amount of budgetary savings in different parts of the budget required to reach a mutually accepted debt-reduction goal.

“The BPC believes strongly that the president and Congress should work together to craft a bipartisan, comprehensive debt reduction package immediately, similar to the recommendations of the BPC’s Debt Reduction Task Force, as well as the president’s own Commission on Fiscal Responsibility and Reform,” said Senator Domenici. “To succeed, such reforms will require enforcement mechanisms. In a contentious 1990 budget battle, as Ranking Member on the Senate Budget Committee, I worked with Republican Staff Director of the Senate Budget Committee Bill Hoagland, then House Budget Committee Chairman Leon Panetta, President George H.W. Bush and others to develop a budget agreement that was enforceable with a new procedure that came to be known as Pay-as-you-Go, or ‘PAYGO.’ SAVEGO is based on that concept included in the Budget Enforcement Act of 1990.”

To enforce the required budget savings each year, SAVEGO would establish:

  • A cap on discretionary spending;
  • Savings to be achieved from Medicare, Medicaid, and other health care programs; and
  • Savings to be achieved from other mandatory spending cuts and reductions in tax expenditures or other revenue increases.

“The 1990 Budget Enforcement Act helped to move the budget from the largest deficit to the largest surplus in history,” said Dr. Rivlin. "SAVEGO will give the Congress a tool for achieving the deficit-reducing spending reductions and revenue increases necessary to restrain the looming growth of debt. It builds on the successful experience with discretionary caps and strong PAYGO rules in the 1990s, but adds a tool for dealing with the immediate prospect that an aging population and rising health care costs will drive up federal spending even without new legislation. SAVEGO will help Congress set fiscally responsible goals and stick to them.”

Click here for the full SAVEGO proposal and to learn more about how the mechanism would work.

Senator Domenici and Dr. Rivlin led a bipartisan task force of 19 former White House and Cabinet officials, former Senate and House members, former governors and mayors, and business and labor leaders, which released its bold, comprehensive plan to address the nation’s debt crisis last November, titled Restoring America’s Future.