Posted on 08/07/2011 8:13:36 PM PDT by SeekAndFind
Now that the national debt-ceiling deal is done — and liberals like me are unhappy and conservatives deservedly have more to cheer about — Thanksgiving 2011 will be more than about good turkeys.
This is the deadline for the so-called “super” congressional committee of six Democrats and six Republicans from the House and Senate to cut at least $1.2 trillion in the projected budget deficit for the next 10 years.
I favor at least one-half of this $1.2 trillion to be funded by a combination of tax reform — closing tax loopholes — and increases in marginal tax rates of upper-income taxpayers (including me).
But if you are an anti-tax conservative who sincerely believes that you have to cut spending and not “feed the beast” with more revenues, then one approach on spending cuts for the super committee to consider is the simple and creative “Penny Plan” introduced by Rep. Connie Mack, R-Fla.
Mr. Mack’s bill, H.R. 1848, would cut one penny out of every dollar actually spent by the federal government from year to year for the next six years, from FY 2012-FY 2017.
Beginning in FY 2018, there would be a budget cap of 18 percent of GDP (the average federal revenue as a percentage of GDP over the past 30 years). And by FY 2019, America would finally have a balanced budget — that is, assuming revenues naturally increase from the current 14.8 percent of GDP to 18 percent of GDP by 2019, after which the budget would be in surplus.
There is an automatic spending cut “trigger” under Mack’s plan — one he came up with well before the trigger used in the recently passed national debt ceiling bill.
(Excerpt) Read more at newsmax.com ...
For those who forget who Lanny Davis is :
Lanny Davis is the principal in the Washington, D.C., law firm of Lanny J. Davis & Associates. He served as President Clinton’s Special Counsel in 1996-98 and as a member of President Bush’s Privacy and Civil Liberties Oversight Board in 2006-07.
FULD
DEFUND socialist collectives, foreign and domestic. NOW.
The Connie Mack Penny plan to Balance the Federal Budget has been endorsed by Senators Rand Paul, Jim DeMint and Marco Rubio.
Here is how it works for those unfamiliar with the plan...
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The first thing you have to understand about the current deficit crisis is the concept of baseline budgeting (BB), which our nation has practiced since 1974. Under BB the budget of every department in the federal government not only continues automatically into the next fiscal year, but gets increased!
The rate of automatic increase is substantial—7.5%, which is far beyond inflation or population growth. It is far beyond our current growth in GDP. The 7.5% is our official government growth rate (which Obama has actually managed to substantially exceed the last 2.5 years, a pretty incredible feat!) BB drives an enormous segment of our over-spending problems, but is almost never mentioned by the chattering class.
Have you heard about those terrible, horrific, excessive, irresponsible Republican/TeaParty attempts to slash government spending? To hear it said, you would think that at least the cruel, cold-hearted Boehner plan would eliminate this 7.5% growth factor.
Not so. The Boehner plan achieves less than $50 Billion (with a B please note) total spending reduction which will barely knock the rate of growth of spending down to 7.4%.
Understandably, conservatives with a Tea Party tilt to their feather-plumed wide brim hats want a much better plan. Even the vaunted Cut, Cap, and Balance plan would not return the USA to the balanced budget we last enjoyed in 1997, not for a long, long time. Democrats could not even tolerate CCB’s moderate measures.
A better conservative plan, probably the best conservative plan, has been proposed by Sen. Connie Mack of Florida after colloboration with Sen. Rand Paul of Kentucky. It is called the Mack/penny plan, after the notion that the federal government beginning next year would have to first reduce the BB rate of growth from 7.5 to zero, and then further reduce every department budget by one cent (a penny) for every dollar spent for six years in a row, hence Mack/penny.
The Mack/penny approach is an absolute spending reduction. With BB gone, this is a cut that draws real blood, not projected blood. The pain will be real. The good news for the Obama White House is that the executive branch can elect to decrease one department by 9% so that it can raise another department by 8% if it wants. The one per cent cut is not a flat rate for every department, but the total federal budget must go down one per cent.
Mack/penny would run these 1% cuts for six years, then cap the rate and at 8 years institute an iron clad balanced budget law. Even doing all this, Sen. Mack thinks it would be ten years to achieve the balanced budget (like we had in 1997) once again.
A one per cent cut in spending every year can be presented to families as not something so extreme as to be unprecedented in their own household budgeting. Sometimes most of usl have to do that much, or much worse. It is a cut easy to explain, easy to visualize.
One major problem looming for Mack/penny will be Social Security and Medicaire. Because of the aging population social security costs can’t be easily contained and because of Obamacare we are essentially putting 30 million new people into a quasi private-public insurance wonderland. Probably the only way for Mack/penny to accommodate those challenges will be means testing. The one penny per dollar rubric could be maintained by only applying that reduction rate to the richest 10% of pensioners.
Do we really want to do anything about the National Debt reaching 16 Trillion dollars in this budget, and likely 30 Trillion by 2025? A mediocre plan that we begin this year will do immensely more good than a more meticulously-crafted plan (by politicians, so add grain of salt) than we don’t get around to for 5-8 years. That truth springs from the relentless crunching of irresistible numbers. What we were taught in business school about the miracle of compound interest is working very decidedly against us today.
The National Taxpayers Union also casts its support on the “One Percent Spending Reduction Act,” legislation – also known as the “Penny Plan”.
I never, ever thought I’d find anything with Lanny Davis to agree upon.
and occasionally he’s on fox news.
Lanny, I take my hate off to you but you'll probably be vilified by your former friends.
RE: Just when I thought there wasn’t an atom of honor left in the rat party...
I believe there still are such animals in existence, but you’ll REALLY HAVE TO LOOK HARD TO FIND THE RARE BIRD.
For those policy wonks out there who want to look at the figures, Rand Paul actually helped Congressman Mack out with the numbers.
The details are here for all to read in PDF format:
http://campaignforliberty.com/materials/RandBudget.pdf
I will say he has good manners in a debate.
Get on board Lanny!
This plan is going to save us.
When, in Jan of 2013, a republican House, Senate, and White House [or at least 2 of the three] will be faced with the same thing we were just faced with - cut dramatically and immediately or up the debt ceiling or some combination.
IMO we don’t want what would happen if we cut spending overnight by 45%. There will have to be yet another increase in the debt ceiling to avoid that.
But this plan can put us on the right track. It means no more baseline budgeting. It means _actual_cuts, not just reductions in the rate of growth.
Combine this plan with tax reform that lowers marginal rates AND makes many more people pay.
I saw Congressman Mack explain his bill on tv. It’s a good start and would balance the budget, I believe. However, we still need to go through the entire budget with a fine toothed comb to eliminate wasteful spending and failed programs. Every budget item should be tested for constitutionality. Every cost should be suspect. We need to know where the money goes. Right now, I don’t believe they have a clue.
The flat tax is the answer. Some of my liberal friends even like it because it means the super wealthy can't pay zero taxes.
Connie Macks plan is so picayune it borders snatching defeat from the mouth of victory..
Even Paul Ryans first plan was not austere enough..
Well, there’s more than one flat tax. There’s the flat income tax and there’s the flat retail sales tax.
Both are consumption taxes and both would be an amazing catalyst for growth.
RE: Connie Macks plan is so picayune it borders snatching defeat from the mouth of victory..
You have a better idea? We’re all ears.
Wow I disagree. The plan eliminates baseline budgeting. That in itself is big - it would be akin to eliminating withholding taxes.
I agree the the “cuts” of 1% are small. But when you compare 7 years of this plan to 7 years of our current mess, it’s astounding.
Old way: grow by 7.5% for 7 years results in a 69% growth from year 0. $100 grows to $169.
Mack way: cut by 1% each year for 7 years results in an almost 7% cut. $100 shrinks to $93.21.
The annual cut could be bigger... 3% cut annually results in a 20% cut - which is almost where we need to be...if we can get the economy growing. But there will also be cuts like EPA, NLRB, etc that will be symbolic and helpful.
So, should we tell Rep Mack to change it from the penny plan to the 3 cent plan?
my old eyes...
7.5% for 7 yrs is a 66% inc, not 69...
i miss my young eyes
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