U.S. Senator Rand Paul (R-KY) has introduced the Six Penny Plan, a budget resolution intended to balance federal spending and revenues within five years by reducing projected spending by six percent each year for the next five fiscal years.
The proposal comes as the federal government continues to run large deficits. This fiscal year, the government added $2.1 trillion to the gross national debt, increasing the burden on American households. The Congressional Budget Office projects that this year’s deficit will be the third largest in U.S. history.
Interest payments on the national debt now exceed military spending, highlighting how increased borrowing is affecting other priorities. The total national debt has surpassed $37 trillion, nearly double all bank deposits in the country. If every American bank account were emptied to pay down the debt, it would only cover about half of what is owed.
Senator Paul noted that when he first proposed a penny plan in 2017, a spending freeze could have balanced the budget within five years. Due to increased spending since then, he says a six percent annual reduction is now necessary. Under his new plan, federal spending would drop to 94 percent of current levels in the first year and continue declining until balance is reached after five years. Afterward, spending growth would match revenue increases for another five years.
“I introduced my first Penny Plan in 2018, prior to that, a spending freeze was all it took to balance the budget in five years,” Senator Paul said. “Today, runaway deficits and skyrocketing interest costs mean it will take a six percent reduction annually just to get us back on track. The math doesn’t lie. Either we take responsibility now, or we condemn our children and grandchildren to economic ruin.”
