Sen. Dr. Rand Paul introduces Six Penny Plan to balance federal budget

WASHINGTON, D.C. – U.S. Senator Dr. Rand Paul (R-Ky.) has introduced the Six Penny Plan, a federal budget resolution that will balance on-budget outlays and revenues within five years by cutting six cents off every dollar projected to be spent over the next five fiscal years.

During the first 11 months of the current fiscal year, the federal government has already run a deficit of about $2 trillion. Gross national debt is now over $40 trillion. If FY2026 finishes near $2.1 trillion, that would be the third-largest nominal deficit on record, behind only the pandemic years of 2020 and 2021, according to the Congressional Budget Office (CBO).

Interest payments on the debt now exceed what America spends on national defense, a sign of how borrowing is crowding out core priorities. With the national debt above $40 trillion, it is roughly twice the $19.5 trillion sitting in U.S. commercial bank deposits. 

Even if every one of those accounts were emptied to pay down the debt, the money would cover only about half of what Washington owes.

When Dr. Paul first introduced a penny plan in 2018, a simple spending freeze was enough to balance the budget within five years. Today, because of years of reckless spending, achieving balance requires reducing projected spending by six percent annually. 

Under the Six Penny Plan, the first year would result in spending at 94 percent of current levels, with annual reductions of six percent continuing until balance is achieved in year five. After the fifth year, spending would be allowed to rise at the same pace as revenues over the next five years.

“At more than $40 trillion, the national debt now costs every household nearly $300,000 and adds $7 billion a day, with interest payments larger than the defense budget,” said Dr. Paul. “My Six Penny Plan is the right step toward fiscal sanity. Neither party has shown the spine to finish the job, but $40 trillion ought to be the moment they finally do.”

Read the plan at: https://www.hsgac.senate.gov/wp-content/uploads/pennyplan.pdf