Under our current budget process, the path of least political resistance is to keep revenues low while offering a high level of services. Balanced budgets are fundamentally against the short-term interests of politicians from both parties.
Our growing national debt is neither a Republican nor a Democratic problem but, rather, a shared, structural problem.
My experience in the private sector and after six years of tough budget balancing as a county executive taught me how difficult — and important — it is to have responsible budget processes in place.
To achieve long-term debt stabilization, we must enact a mechanism that would force Congress into a fiscal straitjacket and require savings each year. “Save As You Go,” or SAVEGO, is just that mechanism.
This approach to budgeting soberly acknowledges the gravity of our situation and uses automatic, annual processes to force difficult but necessary policy changes.
It is widely recognized that entitlement reform is radioactive for Democrats, while raising revenue is political kryptonite for Republicans. In essence, SAVEGO places both painful choices into a lead-lined vault that would automatically open any year Congress fails to achieve deficit reduction.
The mechanism is robust. SAVEGO would divide the budget into distinct categories, requiring savings in each.
First, predetermined caps on discretionary spending would be set for the next 10 years.
Second, savings targets would be enacted for entitlements and revenue. If Congress failed to meet its goals in any given year, a series of spending cuts and revenue increases would be triggered to make up the difference. Washington would be required to save hundreds of billions each year.
The consensus among economists and across several deficit study commissions is that at least $4 trillion in deficit reduction must be passed within a decade to achieve fiscal sustainability. SAVEGO is designed to guarantee we reach this goal.
In months of meetings, hearings and careful consideration of alternatives, I haven’t seen an enforcement mechanism that would help compel Congress to confront the problem better than this method.
SAVEGO closely mimics budget process reforms that helped produce balanced budgets in the 1990s. A bipartisan array of commentators, budget experts and former lawmakers — including New Mexico Sen. Pete Domenici, a Republican and former Budget Committee chairman, and Alice Rivlin, a Democrat and former White House budget director — agree SAVEGO has the potential to rein in deficits and restore fiscal sanity.
Perhaps most important, SAVEGO could lock in necessary savings without denying Congress the opportunity to make its own annual budget decisions.
To be successful, a real deficit deal will need to put everything on the table — from entitlements and revenue to domestic programs and Pentagon spending.
Our long-term deficit is too big to address simply by raising taxes on the wealthiest Americans or by slashing domestic spending — the math just doesn’t add up. Each side will have to give some cherished ideological ground as part of a compromise, and SAVEGO is the mechanism — the way to harness each party’s aversion to its own political kryptonite — to keep both sides at the table.
Americans don’t hesitate to do what is necessary when faced with threats to the security of our nation. It should be no different when confronted by such a fundamental threat to our nation’s economy.
Of course, I would prefer that Congress had spent the past six months working on the comprehensive solution to our fiscal problems we need. But with Congress so divided and real deadlines for progress bearing down on us, I urge Vice President Joe Biden’s deficit working group — with or without the participation of House Majority Leader Eric Cantor (R-Va.) or Senate Minority Whip Jon Kyl (R-Ariz.) — to make SAVEGO part of the negotiations.
Both Democrats and Republicans need to seriously consider a mechanism that can pass Congress, restore confidence to our markets and get us back on track to fiscal sanity.
It is often said that “decisions come with consequences.” But it is also true that indecision can come with consequences. At a time when every family, business and community in America has had to make tough choices and sacrifices to get through the recession, it’s long past time for Congress to join them.
This op-ed appeared in POLITICO.