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Thread: Sen. Paul Calls on Senate to Cut Spending, Support His Balanced Budget - June 3, 2019

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    Sen. Paul Calls on Senate to Cut Spending, Support His Balanced Budget - June 3, 2019




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    Deficit about $1 trillion this year. Cut $183 billion (about four percent of spending) and get it to balance in five years. Right.. So how much would taxes be raised to make up the difference? (his last plan assumed that tax revenues rose 25% during the "balancing" time)

    https://www.politico.com/story/2019/...t-plan-1352443

    Sen. Rand Paul’s plan to slash federal spending by $183.1 billion in fiscal 2020 didn’t survive a procedural hurdle tonight, with the Senate failing to advance the measure in a 22-69 vote.

    The Kentucky Republican‘s bill aims to balance the federal budget in five years. Paul’s office said the proposal would yield a $913 billion surplus five years after the budget is balanced. Sixty votes were needed for the measure to advance.
    https://www.paul.senate.gov/news/dr-...udget%E2%80%99


    Dr. Rand Paul’s Balanced Budget:

    • Dr. Paul’s budget simply states that for every on-budget dollar the federal government spent in FY18, excluding the BBA, it spend one penny less for the next five years (at which point balance is reached), with spending then growing at one percent thereafter.

    • Reduces spending by $404.8B in FY19 and by $13.35T over 10 years relative to baseline.

    Total spending still increases by 14.6 percent over the ten-year window. Only in Washington could a 14.6 percent increase be characterized as a cut.

    • Balances without making any changes to Social Security.

    • Makes no specific policy assumptions – all the savings are reflected in a new budget function (Function number 930: New Efficiencies, Consolidations, and Other Savings). This budget sets a goal of balance and then calls on Congress to use the tools provided to make the changes in law needed to achieve that objective.
    Last edited by Zippyjuan; 06-05-2019 at 01:05 PM.
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    "There is always a tweet. That has become accepted fact in the Trump presidency: For every pronouncement the President makes, there is at least one tweet from his past that directly contradicts his current view." -CNN

    I am Zippy and I approve of this post. But you don't have to.

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    Numbers test. Spending $4.5 trillion. Cut $183 billion and reduce it to $4.3 trillion. Don't touch Social Security ($1.1 trillion). Can't touch interest on the debt- $400 billion (that will rise anyways). Doesn't say anything about Medicare/ Medicaid so we will give him the benefit of the doubt and let him cut it with his "penny plan". Taking out that Social Security and Interest on the Debt (a combined $1.5 trillion) and that leaves $2.8 trillion from which to cut one percent a year.

    for every on-budget dollar the federal government spent in FY18, excluding the BBA, it spend one penny less for the next five years
    Year one: $4.3 trillion spending. Under the One Penny plan we reduce spending $28 billion (interest on the debt may rise by more than that).
    $28 billion a year times five years and we have reduced spending $140 billion. Will that be enough to close the $1 trillion deficit? Will tax revenues increase by $860 billion to make up the difference? Or is it a "painless" way to not really balance the budget while pretending you want to do it? "Well, I offered a simple plan to balance the budget!" Except it won't balance the budget.
    Last edited by Zippyjuan; 06-05-2019 at 01:09 PM.
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    "There is always a tweet. That has become accepted fact in the Trump presidency: For every pronouncement the President makes, there is at least one tweet from his past that directly contradicts his current view." -CNN

    I am Zippy and I approve of this post. But you don't have to.

  7. #6

  8. #7
    Quote Originally Posted by Zippyjuan View Post
    Deficit about $1 trillion this year. Cut $183 billion (about four percent of spending) and get it to balance in five years. Right..
    I don't get why you see a problem there.

    We can't predict exactly what future revenues will be, but we can project it with reasonable accuracy and objectivity.

    The population is growing. The GDP trends upwards. Continuing to cut spending at that rate while revenues keep going up only at the projected levels seems to me not at all unlikely to balance the budget in 5 years. Even without increasing revenues, a $183 Billion cut each year for 5 years is over 90% of that $1 Trillion deficit.

    That said, balancing the budget shouldn't be the goal. Cutting spending and cutting taxes, regardless of deficits, should be.
    Last edited by Superfluous Man; 06-05-2019 at 02:29 PM.

  9. #8
    Quote Originally Posted by Superfluous Man View Post
    I don't get why you see a problem there.

    We can't predict exactly what future revenues will be, but we can project it with reasonable accuracy and objectivity.

    The population is growing. The GDP trends upwards. Continuing to cut spending at that rate while revenues keep going up only at the projected levels seems to me not at all unlikely to balance the budget in 5 years. Even without increasing revenues, a $183 Billion cute times 5 years is over 80% of that $1 Trillion deficit.

    That said, balancing the budget shouldn't be the goal. Cutting spending and cutting taxes, regardless of deficits, should be.
    The $182 billion was to be the first year's cuts. After that, reduce spending by one percent (he said he would not reduce Social Security so I took that and the interest on the debt and excluded it). That leaves $28 billion in cuts a year after that. $28 billion times five years is $140 billion in cuts.

    Population growing about one percent a year (0.7% last year). GDP growing at 2.3% a year and slowing. Tax revenues about $3.5 trillion. Let's grow then at 2.3% and see where we are after five years (assuming things don't slow down more).

    Year one: $3.5 trillion.
    Year two: $3.58 trillion
    Year three: $3.66 trillion
    Year four: $3.74 trillion
    Year five: $3.83 trillion.

    Our revenue started at $4.5 trillion. Took out $182 billion in the first year and $140 billion in the following five years. $4.178 trillion in spending. About $350 billion short.
    Last edited by Zippyjuan; 06-05-2019 at 02:39 PM.
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    "There is always a tweet. That has become accepted fact in the Trump presidency: For every pronouncement the President makes, there is at least one tweet from his past that directly contradicts his current view." -CNN

    I am Zippy and I approve of this post. But you don't have to.



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  11. #9
    Quote Originally Posted by Zippyjuan View Post
    The $182 billion was to be the first year's cuts. After that, reduce spending by one percent (he said he would not reduce Social Security so I took that and the interest on the debt and excluded it). That leaves $28 billion in cuts a year after that. $28 billion times five years is $140 billion in cuts.
    Good point. And how much is revenue projected to increase over that period?

    Note that these cuts are real cuts, not just reductions in previously projected increases in spending.

  12. #10
    Quote Originally Posted by Superfluous Man View Post
    That said, balancing the budget shouldn't be the goal. Cutting spending and cutting taxes, regardless of deficits, should be.
    Rand's strategy was to get people in the Republican party to vote against balancing the budget and condemning socialism so we can maybe send better people to congress who will cut spending.

    The reasonable man adapts himself to the world; the unreasonable one persists in trying to adapt the world to himself. Therefore all progress depends on the unreasonable man. -George Bernard Shaw

  13. #11
    Quote Originally Posted by Superfluous Man View Post
    Good point. And how much is revenue projected to increase over that period?

    Note that these cuts are real cuts, not just reductions in previously projected increases in spending.
    Updated post with my revenue projection but here it is again:

    Population growing about one percent a year (0.7% last year). GDP growing at 2.3% a year and slowing. Tax revenues about $3.5 trillion. Let's grow then at 2.3% and see where we are after five years (assuming things don't slow down more).

    Year one: $3.5 trillion.
    Year two: $3.58 trillion
    Year three: $3.66 trillion
    Year four: $3.74 trillion
    Year five: $3.83 trillion.

    Our spending started at $4.5 trillion. Took out $182 billion in the first year and $140 billion in the following five years- leaving $4.178 trillion in spending for year five. About $350 billion short.
    If you just want to do it with cuts and decide to leave off Medicare/ Medicaid along with Social Security, cut $1 trillion from this (If you want to allow for tax increases to help, add back in $330 billion- that gives you about $520 billion to spend):

    Last edited by Zippyjuan; 06-05-2019 at 06:05 PM.
    Quote Originally Posted by Swordsmyth View Post
    The quality seems to have dropped significantly since I came here, I guess you get what you pay for.
    "There is always a tweet. That has become accepted fact in the Trump presidency: For every pronouncement the President makes, there is at least one tweet from his past that directly contradicts his current view." -CNN

    I am Zippy and I approve of this post. But you don't have to.

  14. #12
    Kudos to Paul for not just talking the talk, but for walking the walk. He should be commended for pressing his Republican colleagues to live up to the campaign promises they all made to balance the budget. By doing the hard work of actually showing the federal government can reach a balanced budget if discipline is properly exercised, and then working with the Senate Republican leadership to get a floor vote on the measure, he proves his constituents were right when they sent him to Washington with the faithful belief that he would fight to restore fiscal discipline.
    https://thehill.com/opinion/finance/...-to-washington

  15. #13
    Quote Originally Posted by Warlord View Post
    if discipline is properly exercised




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