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Republicans Revive ‘Penny Plan’ as Sequester Alternative to Balance Budget

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Photo Credit: APAs Congress faces a fast-approaching deadline on passing a federal spending bill, Republican lawmakers are reviving a Tea Party-backed plan with a catchy title that they claim could balance the budget.

The so-called “Penny Plan” would, according to its sponsors, balance the federal budget in two years by using just a 1 percent reduction in spending.

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. They cast the plan as a pick-and-choose alternative to the sequester’s across-the-board budget cuts.

“Everybody should be able to live with one percent less in order to help bring this country back from the brink of catastrophic failure,” bill sponsor and Wyoming Republican Sen. Mike Enzi said in submitting the legislation just before August recess.

Enzi is joined by fellow GOP Sens. Rand Paul, of Kentucky; John Barrasso, of Wyoming; Jim Risch, of Idaho; David Vitter, of Louisiana; Johnny Isakson, of Georgia; and Marco Rubio, of Florida. Republican Georgia Rep. Austin Scott introduced similar legislation in the House.

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Conservative House Republicans Propose Balancing Budget In Four Years

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Photo Credit: Jacquelyn Martin

As Republicans and Democrats try to find middle ground between the budgets that each side has proposed, the most conservative members of the House are throwing another budget into the mix, one that would balance the budget in four years.

The Republican Study Committee’s “Back to Basics” budget proposes some of the same things as the budget introduced last week by House Budget Committee Chairman Paul Ryan, but it proposes to balance the budget by 2017, rather than 2023.

It does so by returning discretionary spending to $950 billion, lower than 2008 levels, cutting non-defense discretionary spending by $6 billion over 10 years and making serious cuts to entitlements.

Under the RSC budget, the retirement age at which people could receive Social Security payments would go up to 70, a change that would “slowly phase in” for people 51 and younger, and it would also adopt the chained CPI cost of living adjustment.

The budget would also raise the age at which people become Medicare eligible for individuals who are currently younger than 55. Like the Ryan budget, it would turn Medicare into a premium support system, but the RSC budget would enact this reform for persons under age 60, while Ryan’s budget changes it for people younger than 55.

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Germany Defies Calls For Stimulus

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Photo Credit: European University Institute

Germany has ignored calls from its eurozone partners for more economic stimulus by tabling plans to cut spending and balance its budget ahead of schedule on the eve of an EU summit dedicated to growth.

Wolfgang Schäuble, German finance minister, said on Wednesday that his budget for 2014, involving spending cuts of more than €5bn to trim the total below €300bn, was “a strong signal for Europe”.

The plan means Germany will reach budget balance in 2015, a year earlier than required under the “debt brake” written into its constitution.

He described the 2014 spending plan as “growth-friendly consolidation”, intended to prove to the rest of the eurozone that “consistent sustainable budgeting and growth are not mutually exclusive”. Philipp Rösler, economy minister, said Germany’s public finances were the “envy of the world”.

Publication of the budget was deliberately brought forward by a week to bring out the figures before the EU summit, according to German officials. In spite of tough cuts for health, social security and environment, the plan was rushed through the cabinet well ahead of schedule.

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Stossel: The Sequester Is Not Even A Cut

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Photo Credit: Human EventsIf you’re reading this, you’ve survived the “sequester” cuts!

That may surprise you, since President Obama likened the sequester to taking a “meat cleaver” to government, causing FBI agents to be furloughed, prosecutors to let criminals escape and medical research to grind to a halt!

The media hyped it, too. The NBC Nightly News said, “The sequester could cripple air travel, force firefighter layoffs — even kick preschoolers out of child care!” The truth is that the terrifying sequester cuts weren’t even cuts. They were merely a small reduction in government’s planned increase in spending. A very small reduction.

After a decade, the federal government will simply spend about $4.6 trillion a year instead of $4.5 trillion (in 2012 dollars).

And still members of Congress, Republicans included, look for ways to delay the cuts, like spreading them out over 10 years instead of making any now. Sen. Rand Paul, R-Ky., asked, “If we cannot do this little bit … how are we ever going to balance the budget?” Actually, we don’t even need to balance the budget. If we just slowed the growth of government to 1 or 2 percent a year, we could grow our way out of unsustainable debt.

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House Passes Bill Requiring Obama Submit Plan To Balance Budget

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On Wednesday, the House passed legislation that demands President Barack Obama produce a balanced budget or submit a supplemental budget plan by April 1, 2013 that outlines how and in what fiscal year he aims to achieve a balanced budget.

The Require a PLAN Act passed the House in a 253-167 vote, with 26 Democrats supporting the legisation.

Rep. Tom Price (R-GA), the fiscal conservative who introduced the Require a PLAN Act, said, “there is no way our nation can secure a future of growth and opportunity if the spending habits in Washington are allowed to continue to produce massive deficits while chasing every higher spending with ever higher taxes.”

“By passing the Require a PLAN Act, the House of Representatives is taking the next step in making sure Washington puts in place a plan to balance the budget so that we can begin to pay off the debt,” Price said. “All we are asking of President Obama today is that he tell the American people when and how he would balance the budget.”

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Barney Frank on Balancing the Budget: ‘I Don’t Think Balance is Logical’

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(CNSNews.com) — Rep. Barney Frank (D-Mass.) does not think it is “logical” to achieve a balanced federal budget “from the standpoint of a whole economy” because the relationship between budget and government is different from that of budget and individual.

At the U.S. Capitol on Thursday, CNSNews.com asked Frank about the “fiscal cliff” talks between President Barack Obama and House Speaker John Boehner (R-Ohio): “During these ongoing negotiations would you like to see an attempt to balance the federal budget? And if so,in what year?”

Frank said, “I don’t think balance is logical from the standpoint of a whole economy. One of the problems with balancing the budget, if you’re talking about a private individual you get credit for the things you report and that you own, your assets. The federal government has enormous assets. We have buildings and roads and ships.”

“So I think that you ought to be able to get to a point, 7 or 8 years from now, where in a good economic year you can hit a balance,” he said. “It’s important to reduce the deficit but the analogy between an individual entity and the federal government makes no sense.”

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