Rand Paul

Rand Paul's Plan to Balance the Budget by 2023 Will Get a Senate Vote This Week

Do Republicans have the guts to impose strict spending caps?


Bill Clark/CQ Roll Call/Newscom

The Senate will vote this week—likely Thursday—on Rand Paul's budget plan, which would balance the federal budget by 2023 by cutting $400 billion next year and capping future spending increases.

Passing the Kentucky Republican's so-called "Penny Plan" would be a dramatic reversal for Congress, which earlier this year approved enormous spending hikes that busted Obama-era spending caps and threaten to put the country on pace for a $1 trillion annual deficits. The bill is not expected to pass, but Paul tells Politico that it will be a "litmus test for Republicans who claim to be conservative, but are only too happy to grow the federal government and increase our debt."

Relative to current baseline projections, Paul's proposal calls for a $404 billion spending cut in fiscal year 2019, which begins on October 1. After that, Congress would be required to cap spending increases at 1 percent annually. Over the next 10 years, Paul's plan would spend about $13.3 trillion less than the current Congressional Budget Office (CBO) projections—though federal spending would still increase by more than 14 percent over the decade.

Paul's plan would balance the budget by 2023, as long as revenue meets current CBO projections. By 2028, the country could be running a $700 billion surplus instead of facing the $1.5 trillion deficit currently projected by the CBO:

Joseph Bishop-Henchman; The Tax Foundation

Paul's budget would require "some hard decisions now, and then a squeeze to force prioritization in future years," Joseph Bishop-Henchman, vice president of the Tax Foundation, tells Reason.

Is Congress capable of such fiscal restraint? Probably not. But some states have similar spending caps and mostly stick to them. New York, for example, has a 2 percent spending cap. Social Security would be off-limits for budget cuts, but Paul's plan is otherwise agnostic about what federal programs would face the ax to meet the new spending limits—and there is no shortage of targets.

Mick Mulvaney, director of the White House's Office of Budget and Management, reportedly met with some congressional Republicans late last month to discuss the possibility of clawing back some domestic spending in the $1.3 trillion omnibus budget bill that cleared Congress in March. Senate Majority Leader Mitch McConnell (R-Ky.) has dismissed that idea.

Combined with last year's tax reforms, the spending bill will produce annual deficits of at least $1 trillion for the rest of the Trump presidency, the CBO says. If Congress does not allow individual tax rate reductions to expire as planned in the middle of next decade, the deficit will balloon by another $722 billion. By 2028, the CBO projects the national debt will equal the nation's overall economic output, with our debt-to-GDP ratio reaching levels "far greater than the debt in any year since just after World War II."

Absent some surprising congressional move to re-litigate the omnibus bill, an overall plan to scale down spending, like the one Paul is offering this week, is probably the best—though faint—hope for anyone who wants to avoid trillion-dollar deficits for the foreseeable future.

"It would be a sea change in how Washington works," says Bishop-Henchman. "Cutting $400 billion is inconceivably large to most D.C. folks and improbable for a Congress that just did the opposite and voted a big spending increase."

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97 responses to “Rand Paul's Plan to Balance the Budget by 2023 Will Get a Senate Vote This Week

  1. It’s all for show.

    1. ^ This.
      The only consistent feature of Federal spending caps is that they have never, ever actually capped spending.

      1. Yes, even if passed it will be eroded quickly with each subsequent budget bill. It will take “We the People” to actually force such action but unfortunately too many voters just want to take.
        Spending restraint will happen when financial disaster finally arrives (not if but when).

    2. I just got paid $6784 working off my laptop this month. And if you think that?s cool, my divorced friend has twin toddlers and made over $9k her first month. It feels so good making so much money when other people have to work for so much less.
      This is what I do…>>>> http://www.profit70.com

  2. capping future spending increases.

    In the gangsta sense, right? RIGHT?!

  3. How did this get out of committee? The purpose of committees is to prevent good legislation from being put up to an embarrassing “no” vote. Someone dropped the ball here.

    1. My Guess: Rand traded this for his vote for Mike Pompeo.

    2. I’d argue that legislation which has zero chance of even a close vote is, by definition, not “good.” The only reason this got out is because it’s already DOA and a GOP committee is happy have Rand Paul bash Democrats and moderate Republicans.

      1. Any bill that helps you see who is on the side of fiscal sanity is good.

  4. “We’d like to, Senator — but war’s coming. You understand.”

  5. As long as Rand’s neighbor doesn’t blindside him again.

    1. Rand will be debating and 95 of his colleagues will tackle him neighbor-style

      1. I didn’t know Congress has a composte pile they could blame it on.

        1. We know their compost pile as the Constitution.

    2. The bill is called The Balanced Budget And Protection While Lawnmowing Act.

      1. If he called it the “Balanced Budget and Child Protection Act”, it would probably garner more votes and actually have some truth to it.

        1. “Debt Rape Prevention Act”

  6. The Bishop Henchman has spoken. Do as he says.

  7. Sadly, no, probably not.

    But then again, you Professional Fake Libertarians don’t really really support spending cuts either (see Suderman’s hysterical reaction when the House made a nominal effort to cut the Medicaid expansion about a year ago).

    1. Who’s this “you” of which you speak?

    2. This “you” can be seen on the thread relating to people freaking out because Spotify is changing the titles it promotes. Anyone who thinks that’s a big problem, rather than just a bad business choice, is not a libertarian.

      [Disclaimer: I am no longer a libertarian either.]

  8. “Do the Republica….”


  9. Paul’s plan cannot work. Because entitlements outstrip his plan. No chance you can cut things like medicare and medicaid further – doctors already refuse new patients and limit the numbers they will see and break visits into multiple parts in order to get the revenue required to justify their patients. Then you have Social Security. That can’t reasonably be cut too much (not if you hope to avoid being run out of town on a rail).

    The only sizable thing that can be cut substantially is the military. And because of interest on the debt, you can’t cut it enough.

    So, long story short, we are screwed. The minute they decided to fund the government by hiking social security taxes and calling it a “trust fund”, it became inevitable. When all of those T-bills have to be paid back, the debt and deficits balloon out of control and nobody can stop it. You’d have to kill most of defense, medicare and medicaid, and slash domestic spending just to have a hope of surviving the coming fiscal apocalypse.

    So instead we’ll just print money.

    1. The artificially-inflated demand for the dollar may well wind up having caused mankind’s greatest bubble when our descendants are writing the history books.

    2. The government itself claims $100B a year in Medicare fraud. They could start a bounty program — you get 10% of what you identify — and cut that down enormously.

      1. And spawn some kick-ass reality TV – “Dog the CPA bounty hunter”.

    3. And people will blame rising prices on corporate greed.

    4. “”The only sizable thing that can be cut substantially is the military.””

      Not as long as we have commitments in protecting other nations. Get us out of NATO, and other defense treaties, cut out the “defender of the free world” attitude, move back to defending the homeland and we could. But that’s not gonna happen.

      1. I am not sure those changes necessarily mean a radical reduction in defense spending. Withdrawing like that (which for the most part I agree with) probably means more spending in other areas, like missile defense and god knows what else. Plus, we’ll still have to keep an edge in technological superiority.

        The other thing is, much as libertarians (perhaps not you, but in general) may believe that withdrawing like that will make our enemies largely disappear, our past 50+ years of intervention means that ship has sailed. We have enemies. Enemies that probably won’t go away for another generation or two, if ever.

    5. Spot On.

      I mean, I’m all for whatever cuts Rand Paul wants to make, but in the end we could cut all the discretionary including defense to zero and we’d still be screwed. Medicare/Medicaid/SS send us right over the cliff.

      Back in the Reagan days, the Rs and Ds came together and did some SS reforms. I don’t think anything like that will happen again until our backs are against the wall, and even then its slim.

      Would love to see some bold reforms for Medicare and SS proposed, however it seems like a ticket to political oblivion.

    6. Social Security and Medicare (but not Medicaid) is paid for via a payroll tax. The only reason these things are part of the deficit is because Congress can’t stop spending the savings accounts on other stuff and then has to pay back the IOU’s with general funds. When they talk about cutting social security in order to balance the budget, they mean nothing more complicated than refusing to honor their own IOUs.

      1. You are sidling up to saying it without actually saying it, so I’ll come right out and say it….. all of the talk of “trust fund” and dedicated funds is a fraud. We are scheduled to begin drawing down the social security trust fund shortly. When we do, those t-bills will have to be repaid……. out of the general fund. It was a fraud.

        They spent all of that money. They bought t-bills and then spent it. And now we have to pay it back. So my generation got defrauded three times.

        We paid into the “trust fund” to fund deficit spending for the last 30 years.

        Now we’ll pay out Social Security to the Boomers via our income taxes to pay back the T-bills.

        And then we’ll have to pay back the t-bills that are inevitably used to fund the deficit spending that is about to be added again, because there is only so much money to go around and we’ll increase the deficit to pay back the t-bills.

        So instead of investing social security into real investment accounts controlled by individuals where there would be no debt implications, no ongoing liabilities and everyone would have at least double the retirement income, we’ve bankrupted ourselves and we’ll have no social security to draw from after the boomers are done with it. ‘

        So thanks for that. Appreciate it boomers.

        1. Hmmm, well, it is a fraud, but more of a ponzi scheme I think.

          All these accusations that the trust fund has been “raided” or whatever are beside the point. If they offset borrowing with the Trust Fund (unclear to me if that actually happened) then its less debt we have. If they didn’t, we’d have more debt. It really makes no difference.

          The real issue is the structure of it. We don’t have enough new workers paying in to fund the outlays, and of course early retirees got payouts far in excess of what they put in. Payouts to retirees in the future will have to be reduced for it not to go broke or result in huge borrowing.There are not individualized savings accounts, merely calculated obligations based on your pay history. I don’t think whether some magical “Trust Fund” was raided or not would make any difference in the outcome.

      2. Social Security and Medicare (but not Medicaid) is paid for via a payroll tax.

        Social Security is. Medicare is not, not 100% anyway. The medicare payroll tax has never covered the Medicare bill. I’m not sure its even once covered 50% of the bill. In 2015 the medicare payroll tax collected $234B while spending over $648B.

    7. You’re being too pessimistic. Entitlements will eventually be cut, one way or another. There isn’t the money to keep these promises unless the government just prints it. It’s just a matter of when and how much. The sooner it’s addressed, the less painful it will be. I agree, the politicians will likely just print the money, and for Social Security, since it’s indexed to inflation, that will make the inflation worse.

    8. Entitlements can and will be cut — eventually. Better to do it now.

    9. No chance you can cut things like medicare and medicaid further – doctors already refuse new patients and limit the numbers they will see and break visits into multiple parts in order to get the revenue required to justify their patients.

      Sure you can. Here’s a few ways:
      1) Actually try to crackdown on fraud (Institute the controls that insurance companies have)
      2) Stop paying for elective (anything not for a medical issue) surgery
      3) Increase the starting age. Lifespan has continued to increase, the starting age hasn’t.
      4) Negotiate prices for drugs or require best price offered to anyone be given to Medicaid, don’t just use a 75% of the fake “retail” (its like MSRP on a car, noone actually pays it)
      5) Stop requiring so much red-tape paperwork
      6) Change to block grants to states based on population.

      So called “Mandatory spending” (autopilot spending really), even excluding interest on the debt, vastly outstrips Deffense spending by 2:1. That’s what needs to be looked at. Claiming defense is the only place to cut is the refuge of Democrats who want to protect their sacred cows.

  10. Do Republicans have the guts to impose strict spending caps?


  11. Paul’s plan would balance the budget by 2023

    Didn’t Gramm-Rudman already take care of this problem 30 years ago? Not that I’m all that concerned about government spending, I have a plan to win the lottery next week and buy a private island in the Caribbean where this won’t affect me. I bet my plan will work better than Paul’s.

    1. Gramm-Rudman was a dead letter 29 years ago.

    2. It certainly has better odds of succeeding.

  12. It’s this kind of thing that lets the world know that there is absolutely no way we’re going to pay out debts. They should call it the “Remove all doubt” Bill.

  13. They may have the guts to say that spending is capped; they’ve pulled that scam before. But they won’t actually cap spending, and it has nothing to do with lack of guts. They don’t want to cap spending any more than their Democrat counterparts do.

    1. An annual cap that lets them still increase spending a little (1 or 2 percent) can certainly pass and would be a big improvement over no limits whatsoever..
      What was always a charade was a “debt ceiling” that got raised every time they hit it.

  14. Republicans are not libertarians — their “small government” rhetoric is limited in scope.

    They aren’t fiscally responsible either and in recent years it was at least a wash among the two parties & I probably would say (though this isn’t the forum for it) the Democrats net were better.

    1. The Democrats are better here in two obvious ways:

      1) Deficits, for recent Democratic presidents, tend to drop relative to GOP presidents. (But this is, in part, due to the Congress and Senate being run by opposite parties.)

      2) The Democrats are at least honest about their preference for big government and acceptance of higher taxes. They aren’t hypocrites on those two points.

      [the Dems have their downsides too, but this is limited to the whole “small government” and “taxes” hypocrisy we see from the GOP.]

      1. Call me when they raise taxes to levels that would actually fund those programs instead of just promising to “tax the rich”.

  15. “Absent some surprising congressional move to re-litigate the omnibus bill, an overall plan to scale down spending, like the one Paul is offering this week, is probably the best?though faint?hope for anyone who wants to avoid trillion-dollar deficits for the foreseeable future.”

    That rules out Congress. Still, it wasn’t a bad plan. Rand’s just presenting it people who have completely different priorities, that’s all.

  16. “Do Republicans have the guts to impose strict spending caps?”

    When there’s a question in the headline, is the answer ever yes?

    1. Yes — er, No No, wait ….

      Interesting dilemma.

    2. No.

  17. So what is the actual tipping point of debt that is too much even for the US? Is there any such tipping point?

    1. There has to be a tipping point, but of course none of us know with certainty exactly where that is.

      The power and popularity of the US dollar probably does do a lot to push our tipping point much further to the right than what most countries would enjoy with their currency.

    2. We’ll know it when we reach it.

    3. We are still a long way off. Look at Japan and Greece for perspective.

      1. Greece isn’t a very good example given that they’re still in an economic depression in spite of IMF bailouts, austerity, and the whole nine yards.

    4. There isn’t a tipping point for debt load in the sense of some inevitable obvious immediate crisis.

      More like a slowly strangled frog – and we reached that point a couple decades ago. Additional debt (public or private) – marginal productivity of debt – no longer adds much to the economy. From what I can see – a marginal dollar of debt now adds about 20-25 cents to the economy’s ability to service it and/or pay it off.

      IOW – there is no possible growth anymore beyond the financial sector itself feeding on the money it creates thru lending. We’ve actually done a pretty good job over the last 25 years or so at financializing what used to be non-financial in order to keep providing an appearance of healthy growth. But that only looks real as long as we are successful at manipulating the price of debt and the cost of capital.

      1. The tipping point will be when interest rates go up and debt service becomes 2x the next highest budget category.

  18. If Republicans weren’t trying to ruin the country, how could we tell the difference?

    1. As much as I loathe the utter hypocrisy of Republican talk of “fiscal responsibility”, you have to admit, they aren’t the only ones to blame here.

      Ultimately, it’s the VOTERS who demand fantasies such as government services that they don’t pay taxes for.

      1. Republicans talk more about fiscal responsibility yet Democrats actually deliver on it. Sure, it’s because they are pansies capitulating to a Republican narrative that Republicans themselves don’t follow, but at least it’s not total duplicity. “Let’s cut taxes by a trillion dollars. Oh now we have no recourse but to cut programs, because for some reason taxes can never ever go up.” One day maybe voters will buy it.

        1. Democrats only deliver on “responsibility” by raising taxes. That’s like saying it’s “responsible” for me to spend a bunch of money as long as I can take it from someone else.

          1. It’s responsible for me to buy a yacht on a janitor’s wage so long as I rob a millionaire once a month.

            /Team Blue spending plan

          2. Uh… raising taxes is the responsible answer to a demand by the voters to keep their programs and not grow the deficit. If you’re struggling financially in your family and there are no easy choices, sometimes you just have to get a second job (aka: raise taxes) until you solve your financial issues. That’s being a responsible adult.

            1. The problem with that analogy is that unlike getting a second job, raising taxes fails to increase revenue after a certain point. Once the tax burden becomes too onerous, growth tanks and increases are actually revenue negative.

              You can only skim so much off the top of the economy before you kill it.. So spending has to come in below that number, whatever it might be.

            2. To use your analogy (which is not a good one) – when your deficit gets to high, and your credit cards are cut off you are thrown out on the street.

              Tell me when the US has it’s power turned off, and gets the eviction notice.

              Why don’t we raise taxes to 100 percent right?

            3. Something else you and Tony missed – the government is getting record revenue.
              To put in simple terms for Tony – bringing in more money than ever. It doesn’t have a revenue problem just a spending problem.

            4. That’s being a responsible adult.

              That’s only being a “responsible adult” if you use the extra income from the second job to pay down your debt.

              Congress already has second, third, and fourth “jobs,” and they keep spending the “extra” money on expanding old programs and starting more new ones.

        2. The only time a Democrat delivered on fiscal responsibility was when one co-opted and took credit for the GOP congressional agenda.

          1. That particular one had much experience with republican legislature and balanced budgets. Arkansas requires balanced budget. So he was in familiar territory.

        3. OK, so Tony, you’re not totally wrong. Actually, when there is divided government in Washington, there is less total spending.


          So, this is what we predicted, if the Rs control government, they will spend more (than if there were a divided government). If the Ds control governent, they will spend more, too.

        4. Raising taxes doesn’t help when you raise spending even more. If Democrats raised taxes AND cut spending then I’d be willing to entertain the notion that they’re fiscally responsible.

          All the talk about “free” healthcare, “free” college for everyone, a gazillion dollars of infrastructure spending, another gazillion dollars on giant bird-eating windmills, etc. just doesn’t smack of fiscal responsibility.

          1. Tony supports universal health care. So he’s not what I would call fiscally responsible. With regards to spending other people’s money anyway. Maybe he is fiscally responsible in his personal affairs. I dunno.

            1. He sits around all day posting on the internet. Unless he’s getting paid to do so…. not so fiscally responsible.

              Oh, wait…. dang…

          2. “another gazillion dollars on giant bird-eating windmills”

            🙂 good mental image.

        5. “Democrats actually deliver on it”

          lmao fuck off

        6. “”Republicans talk more about fiscal responsibility yet Democrats actually deliver on it””

          First you would need to understand that Congress is responsible for budgets. The executive branch can submit one, but Congress has the right to pass, modify or ignore.

          Obama’s deficits got better once the republicans controlled Congress. It’s not as simple as the president’s team.

          1. First you would need to understand that Congress is responsible for budgets.

            We all understand this.

            And the logical conclusion is that, if lowered deficits was your priority, you would vote for a Republican congress-critter and a Democrat president, as that’s the only combination that leads to lower deficits.

            You can, of course, have other priorities.

        7. So there was no deficit under Obama? Debt didn’t increase? Humm didn’t the Democrats control both house and the presidency in 2009 to 2011? I’m sure that we had a surplus right?

          The words fiscal responsibility do not mean what you think they mean.

  19. A voice of sanity in an age of utter madness. Thank you Rand Paul.

  20. I’m surprised angry Hihn isn’t here yet. He’s usually the first one to bitch about anything involving a Paul.

  21. No, of course it will never happen. The best we can hope for is that some who give lip service to fiscal responsibility may have the decency to feel faintly embarrassed when they vote “no” on this.

  22. The best taxes are the ones that taxes other people.

    The best cuts are the one that affect the other teams programs.

    There is no fiscal responsibility when the game is played like that.

  23. Rand Paul doesn’t say or do anything unless the outcome is predetermined. I’m floored anyone still falls for his schtick.

  24. Social Security would be off-limits for budget cuts…

    I call B.S. on this. Ryan has already floated the idea that Social Security and Medicare should be cut. Do you really think the GOP is going to leave an entitlement program unscathed that doesn’t benefit corporations?

    1. If you think Medicare doesn’t greatly benefit corporations, you really need to understand where the money goes.

  25. This is utter crap for the plutocrats and their MBA-wielding sycophants who believe the WSJ editorial page publishes factual content. It is not necessary for the federal government to have a balanced budget, and it sure as hell is a bad thing when Congress is controlled by idiots who think taxes matter more than one’s standard of living.

    In support of my position that balanced budgets are unnecessary, I offer the entire history of the United States. Oh, and Medicare/Social Security is not part of the general budget.

    That is all.

    1. “In support of my position that balanced budgets are unnecessary, I offer the entire history of the United States. Oh, and Medicare/Social Security is not part of the general budget.”

      Hmm interesting proposition.

      On the other hand you can look at all of human history where debts brought down governments (French under Louis XVI) and debasing coinage led to political turmoil (Rome).

  26. How many times does Rand have to accomplish nothing before he gives up and walks away? If I were him I would go live my life while I can. Congress is a dead end.

  27. Fixing the national debt problem is simple: STOP ISSUING DEBT!!! The debt and the deficit are two separate issues. Fiat money is inferior to hard money, but “unbacked” fiat money is much less destructive to the economy and to personal liberty than the “debt-backed” fiat money we use today. We urgently need to transition to a debt-free currency before the national debt overwhelms the economy. See http://www.fixourmoney.com .

  28. earlier this year approved enormous spending hikes that busted Obama-era spending caps and threaten to put the country on pace for a $1 trillion annual deficits.

    Let us see, when Obama was elected the debt was just under $10 trillion. When Obama left office the debt was just over $19 trillion. 19 – 10 = 9. 9/8 = 1.125. The country has been on that path for eight+ years!

    Eric you should have not skipped 3rd grade math class.

  29. The good thing about this show vote, is that it forces some RINOs to vote against it, showing they are spendthrift big government politicians. But given the narrow majority the GOP has, it only takes a couple of GOP votes to kill it. So expect most of the GOP to lie claiming they support the bill, when they know it will fail to pass.

  30. Heh. If Rand gave a fuck about balancing the federal budget, he would have voted for Al Gore in 2000.

  31. Pretty sure this is all for show. Rand must have horse-traded something to get this vote. I’d guess, as the article states, this is a kind of test for Republicans. Maybe he’s weeding out his 2022 competition.

  32. Fuckin sell off a national park already.

  33. If only something like this would actually pass!

    I still can’t for the life of me understand why Republicans won’t cut spending on even stupid/pointless programs. Half of what FedGov spends money on normal people never SEE or INTERACT with directly… Therefore if you cut only that stuff, nobody notices except the FedGov employees who get fired. That kind of stuff could easily be cut with little blow back, and the conservative base would LOVE IT.

    Stupid Rs, always doing everything wrong even when they’re given the mandate…

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