Last week Senator Rand Paul of Kentucky put forward the Balanced Budget Act of 2018 aka the “Penny Plan”. Per a press release from Senator Paul and as the name implies, this 64-page budget would have cut 1 cent from every dollar spent by the federal government for the next 5 years; basically amounting to a one percent spending cut each year. This would have resulted in a balanced budget by 2023, after which spending growth would be capped at 1 percent per year. Other provisions in the budget included expanded Health Savings Accounts and making budget spending totals enforceable for 10 years opposed to just one.
Now in raw dollars, the cuts seem rather large, with cuts of 404.8 billion in the fiscal year 2019 and 13.35 trillion over 10 years. We have to keep in mind, however, that these “cuts” are relative to the CBO baseline. When the CBO (Congressional Budget Office) scores the fiscal impact of a piece of legislation, they do so with an assumption that government spending will increase by a certain amount. That amount is determined by a calculation of the current spending levels times the inflation rate, times the population growth rate. Anything that would result in spending increased by an amount smaller than that assumed increase is considered a “cut”. As Rand Paul points out in the press release, even with the impact of these so-called cuts, total spending would still increase by 14.6 percent over 10 years.
Another thing to note is that this budget only covered discretionary spending, not mandatory spending. This means that Paul’s proposal would not have impacted entitlements in any way. This is significant as said entitlements are by far the most expensive aspect of federal spending, with Social Security, Medicare, Medicaid, and related programs accounting for roughly 60 percent of all federal spending as displayed in the following chart from nationalpriorities.org:
Keep in mind that our nation is 21 Trillion dollars in debt and running a near 600 billion dollar deficit as of the midpoint of the fiscal year 2018. In light of all of this, a one percent reduction in spending increases over 5 years is a very modest proposal. With the Senate controlled by Republicans, who consistently talk about the importance of fiscal responsibility and cutting spending, this passed easily right? Wrong. Not even half of Senate Republicans voted in favor of the Penny Plan. We’re not even talking about cutting into our 21 trillion dollar debt here, just simply balancing the budget 5 years from now so that our debt doesn’t continue to increase! What reasons could Republicans have for opposing this plan? Well let’s look at the statement put out by Missouri Republican Cindy Hyde-Smith who voted against Paul’s proposal, “I support balancing the budget by controlling spending and the national debt. However, there’s little value in theatric votes on bills that sound good but would result in irresponsible cuts to priorities like funding our military, building the border wall, and implementing President Trump’s agenda. I do not believe such consequences are in the best interests of our nation or Mississippi,” Other Republicans who opposed the plan such as Lindsey Graham, raised similar objections. These objections are utter nonsense. Do they really expect us to believe that our military is so fragile that it can’t handle a 1 percent spending reduction? Remember this is not an actual 1 percent cut, just a 1 percent smaller increase! Look, I am a Army veteran, as was my dad. You will find few more ardent supporters for the American military than myself. I am the type of person who hears the “American spends more on its military than the next 20 nations combined” statistic and cheers. That said, the idea that reducing spending increases in the military by 1 percent for 5 years while limiting them to 1 percent growth thereafter is “irresponsible” is absolutely asinine. The Pentagon just magically lost 800 million dollars and you expect me to believe they can’t handle a 1 percent spending reduction? Well then again, maybe they couldn’t but that would be because of the Pentagon’s financial incompetence, not because of a genuine lack of funding.
What is actually irresponsible is the fact that congressional Republicans have campaigned on fiscal responsibility constantly, especially when Obama was in office. They have constantly talked about the dangers of reckless spending and the national debt. Yet every time they actually have the power to do something about it, they do nothing. Hyde-Smith and other Senate Republicans may claim to care about fiscal responsibility but their actions tell another story. We found out on Friday who the true conservatives in the Senate are and there are exactly 21 of them. What this vote demonstrated is that there are 30 Senate Republicans who are either lying when they claim to care about fiscal responsibility, do not have the guts to actually follow-through on their beliefs, or have a very questionable judgment on what ought to be done to fix our spending problems. Regardless of their reasons for opposing this plan, all 30 of these Republicans ought to be primaried as they have proven to be useless in addressing our nation’s financial woes. Rand Paul was absolutely right when he called this vote a litmus test, and most Senate Republicans failed it.