As he does every year, Sen. Rand Paul (R–Ky.) asked the Senate on Wednesday to balance the federal budget by trimming a few pennies from every dollar that the government spends.
Yep, it’s actually that easy.
The predictable result: a 39-56 vote that probably overstates the popularity of Paul’s proposal—how many would vote for it if they believed it actually had a chance of passing, one must wonder.
If it had passed, Paul’s “Six-Penny Plan” would balance the budget within five years by cutting six pennies off every dollar the government spends. That translates to a $329 billion cut for the new fiscal year that begins on October 1—a fiscal year that seems likely to begin without a real budget having passed Congress. It would make the 2017 tax cuts permanent (and would account for the decline in future revenue that would result from that change), would preserve Social Security, and would otherwise leave Congress to determine the specifics.
“There is no free lunch. You can’t have free college—somebody has to pay for it. There’s no money up here,” Paul said during a speech on the Senate floor Wednesday. “They’re not giving you somebody else’s money. They’re not even taxing the rich. They’re just borrowing it.”
The most notable part of this thankless annual ritual of Paul’s is not the results of the roll call vote, but the number of pennies that the senator asks his fellow lawmakers to trim. That’s become a useful illustration of how out of whack the federal budget has gotten, and how much harder the task of bringing it into balance has become.
When he first offered what was then called the “Penny Plan” in 2018, Paul was asking for a $400 billion cut in government spending followed by 1 percent annual increases. Had that been adopted, the budget would have been on course to balance by 2023 (although the COVID-19 pandemic may have interfered with that trajectory).
A year later, Paul was back with the “Pennies Plan” that called for a 2 percent across-the-board cut for five years, followed by a two percent annual increase in spending for the five years after that. That would have amounted to a $184 billion cut in the first year, but overall spending would have grown by 18 percent over the full 10 years of the plan—and the budget would have balanced at the end of the decade.
By 2021, it was a “Three Pennies Plan,” and you probably get the gist. “When I started offering these kinds of budgets four years ago, we could balance with a freeze in spending. Not cut anything, then we went to just a penny, then two, now it is three,” Paul said that year.
Well, it’s now 2024 and the federal government will spend well over $6 trillion this year, up from about $4.1 trillion in 2018. The government is going to borrow nearly $2 trillion in the fiscal year that ends later this month. As a consequence of all that borrowing, the national debt now exceeds $35 trillion, more than $12 trillion higher than it was in 2018.
Fixing that mess is no longer possible by cutting a penny or two or three. It now requires six.
Still sounds pretty achievable, but the trend is undeniably heading in the wrong direction.
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