Where the Penny Plan is simple and honest, the President’s budget is complicated and duplicitous. Where the Penny Plan takes on the fiscal crisis by focusing on spending, the budget avoids making tough choices by pretending the problem doesn’t exist. And while the Penny Plan sets out the clear goal of balance, the President’s plan takes the budget in the opposite direction.
The strength of the Penny Plan is its clarity — cut one percent off federal spending each year for six years, and you can balance the budget. It’s an approach Americans can understand and get behind, and it’s the reason we’ve gained so much support over the past year.
On the other hand, the dominant feature of the President’s new budget is its opaqueness. Does it cut spending, or increase it? Does the deficit go down, or up? Are those tax cuts, or tax hikes? The more you look into it, the less you know.
Fortunately for our readers, we’ve taken a tough look into the budget and can report the facts. Over the next ten years, the President’s budget:
- Keeps spending at more than 22 percent of our national income. That’s a record–significantly higher spending than at anytime since WWII.
- Raises taxes to more than 20 percent of national income, far higher than the 40-year average of 18 percent.
- Allows federal debt held by the public to double from $1 trillion last year to nearly $20 trillion in 2022.
So there you have it, higher spending, higher taxes, and more debt.
Why are these numbers so different than those reported by the Administration? They use a different baseline to hide the fact that they’re increasing the deficit, not cutting it.
The Congressional Budget Office (CBO) uses a “current law” baseline. They assume current law will stay the same for the next ten years, and measure any changes against that. On the other hand, the Administration uses a “current services” baseline that prices population growth and inflation into spending projections, so that any reduction in either would count as a cut. Spending still goes up, but they talk about it like they’re making reductions.
The One Cent Solution gets past this budget gimmick by making it simple. If the government spent $3 trillion last year, it will need to spend $30 billion less in 2012, etc. That’s how we control spending, and that’s how we balance the budget.
The benefit of this approach is everybody knows that it’s achievable. Every family in American can reduce their spending by one penny out of every dollar, and they know the federal government can too.
So a big raspberry to the Administration and their budget. And three cheers to the Penny Plan and all those Representatives and Senators who support it. As this budget demonstrates, we could use a little clarity in federal budgeting, and the Penny Plan will deliver.