Americans for Tax Reform: SAVEGO violates tax pledge

Americans for Tax Reform is taking aim at a new proposal being offered as a compromise solution to the standoff over the debt ceiling.

This week, the Bipartisan Policy Center has circulated an enforceable spending-cap proposal dubbed SAVEGO to budget players on Capitol Hill.

With a comprehensive deficit package likely too difficult to be agreed on by July, spending caps are becoming all the rage.

ATR is warning that Republicans would be violating their Taxpayer Protection Pledge if they sign on to the deal. SAVEGO as proposed would count tax earmarks as "spending" in the tax code. ATR does not view tax breaks as a type of spending and insists that eliminating them must be accompanied by tax cuts.

SAVEGO would put in place a trigger that, if reached, would cause across-the-board spending cuts or slashing tax breaks.

"Support for a net tax increase trigger is a clear Pledge violation," ATR Tax Policy Director Ryan Ellis told The Hill Thursday. "A vote for this is a vote for automatic net tax increases."

"The second clause of the Pledge says that signers will oppose any net reduction or elimination of deductions and credits, unless matched dollar-for-dollar by cutting tax rates. The SAVEGO plan is in direct violation of the Pledge," he added.

The Bipartisan Policy Center's Steve Bell countered that SAVEGO does not contain automatic tax increase, it just leaves them as an option.

"SAVEGO is silent on what option(s) Congress will choose.  It says that a certain number (pretend $8 trillion) has to be cut from the 10-year deficit/debt projections of CBO and that the individual committees of Congress can/must make the decision on whether to take savings all from spending, from closing tax loopholes, increasing revenues explicitly, et al," he said in an email. "In short, SAVEGO leaves the composition of legislative changes to the folks who have that authority—Congress."