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Penny Plan is a simple & smart solution to balance the budget

Enzi, Sanford introduce legislation to balance budget in 5 years

July 7, 2016

As the government continues to overspend by hundreds of billions of dollars every year, U.S. Senators Mike Enzi and John Barrasso, both R-Wyo., and Representative Mark Sanford, R-S.C., have introduced simple and straightforward legislation to balance the budget and put our country on the right fiscal path.

The One Percent Spending Reduction Act of 2016, better known as the Penny Plan, would balance the budget by cutting 1 percent of government spending for 5 years straight. This would be the equivalent of cutting a single penny from every dollar the government spends each year.

“It seems many people think we can keep overspending, creating more and more debt, without worrying about the consequences,” Enzi said. “Well there are going to be consequences and there won’t be any easy solutions if we don’t start controlling our spending now. The Penny Plan is a simple and smart solution that is designed to cut spending in order to balance the budget. Everyone should be able to live with 1 percent less in order to help bring this country back from the brink of catastrophic fiscal failure.”

“Former chief of staff to President Clinton, Erskine Bowles, once observed that our nation's finances guaranteed the most predictable financial crisis in the history of man,” Sanford said. “We have to take action now, and this plan does that. The idea is simple: cut a single penny from every dollar that the federal government spends for the next five years. By 2021, the budget would be balanced and would remain balanced with federal spending capped at 18 percent of Gross Domestic Product (GDP) from then on. The plan’s only mandate is a one-percent cut in spending every year. Beyond that, Congress can make targeted cuts that cumulatively meet the 1% cut overall. All this is vital because, at the beginning of this year, our national debt hit $19 trillion and has risen over $8.5 trillion in the past seven years. Spending in Washington is out of control, and the impending financial train wreck continues to get closer and more devastating. Within ten years, the country will only be able to pay for interest on the national debt, entitlements, and nothing else.”

The Penny Plan doesn’t mandate any specific cuts. Congress would have the authority to make targeted cuts and focus on the worst first as long as they cut 1 percent overall each year. When a balanced budget is achieved, the bill would place a cap on total spending each year at 18 percent of gross domestic product.

The Senate legislation is also cosponsored by Senators David Vitter, R-La., Johnny Isakson, R-Ga., and Marco Rubio, R-Fla.

The House legislation is cosponsored by Representatives Scott DesJarlais, R-Tenn., Jeff Duncan, R-S.C., Louie Gohmert, R-Texas, Paul Gosar, R-Ariz., Raúl Labrador, R-Idaho, Mark Meadows, R-N.C., Mick Mulvaney, R-S.C., Gary Palmer, R-Va., and Reid Ribble, R-Wis.

The text of the bill can be viewed here