The so-called "Penny Plan" would, according to its sponsors, balance the federal budget in 2 years by using just a 1% reduction in spending. The 1% cut would last 2 years, followed by a cap on total annual spending -- equal to roughly 19% of GDP. Supporters say it also will cut spending over roughly 10 years by about $5.8 trillion, based on currently projected levels. The lawmakers are pitching the plan in the simplest terms -- cutting a penny from every dollar the government spends so that spending will soon equal revenue. However, the bill singles out only entitlements. "Absent reform, the growth of Social Security, Medicare, Medicaid and other health-related spending will overwhelm all other federal programs," the bill states. The senators say only that the plan takes a "worst first" approach to the cuts -- in other words, leaving it to lawmakers to cut what they deem the most wasteful items first -- as long as the overall 1% cut is achieved. The idea is backed largely by conservative groups including FreedomWorks and the Tea Party Patriots. It also garnered support during its Capitol Hill debut from former Clinton administration aide Lanny Davis, who said the plan also needs a revenue-raising component but was "practical" and seemed like "a good place to start." Still, the plan does not appear to enjoy widespread support among progressives.
Posted on: Wed, 07 Aug 2013 22:22:10 +0000
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