NYcarbineer
Diamond Member
The One Cent Solution Penny Plan balances the federal budget by 2019.
The Three Keys
1. A Plan that Works
The One Cent Solution is beautifully simple: If the government cuts one cent out of every dollar of its total spending (excluding interest payments) each year for five years, and then caps overall federal spending at 18 percent of national income from then on, we can:
Moreover, instead of using inflated budget “baselines” to claim nonexistent spending “cuts” a common practice in Washington, the One Cent Solution calls for real cuts. Under the One Cent plan, the sum of all discretionary and entitlement spending will have to go down from one year to the next, by one percent or more.
- Reduce federal spending by $7.5 trillion over 10 years.
- Balance the budget by 2019.
2. Legislative Strategy
The One Percent Spending Reduction Act of 2011 embodies the principles of the One Cent Solution. Also known as the “Penny Plan” on Capitol Hill, this legislation was introduced by Congressman Connie Mack (R-FL) and Senator Mike Enzi (R-WY) and is currently supported by 71 Members of the House and 13 Members of the Senate. Visit our current legislation page to view the list.
The “Penny Plan” legislation would cap overall spending to fit within the One Cent Solution targets. The legislation then calls on Congress to evaluate all areas of the federal government to make certain that future spending fits under the caps.
Under the One Cent Solution or “Penny Plan”, not all programs must be cut by one percent. Congress may determine that some programs are too critical to cut, but that would require that other programs be reduced more so that the total amount cut is equal to one cent for every dollar each year for six years.
For example, let’s say the federal budget only had three programs, each with an annual budget of $1.00. How might Congress meet the One Cent mandate?
In this example, Congress is able to make program-by-program decisions to bring spending within the One Cent Solution caps. If Congress fails to make those tough decisions, then automatic, across-the-board cuts would be imposed to make sure the caps were enforced. The One Cent Solution is a “belt and suspenders” approach to making certain spending is brought under control and the budget is balanced.
- Congress cuts Program A by one cent every year for six years. That means the annual budget for Program A is $0.99 in year one and then $0.98, $0.97, $0.96, $0.95 and finally $0.94.
- Program B is found to be essential and efficient — Congress chooses not to cut Program B.
- Program C is outdated and needs to be restructured — Congress cuts two cents each year for six years from Program C.
3. Public Support
That's a fascinating pipe dream. How will it solve poverty and create good paying jobs?