Rep. Connie Mack’s 'Penny Plan' Can Balance the Budget

Lanny Davis, although a liberal Democrat, has been a refreshing guest on FOX News. He acknowledges the problem and is willing to look at the solutions rationally and forgo politics to find what is right for the American people. I respect Lanny for recognizing that Rep. Mack's bill could be the answer to our debt situation.

Excerpt: Lanny Davis, a Democrat, states: 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.

If Congress failed to enact a budget implementing the 1 percent actual spending cut required under Mack’s measure, then there would be automatic, across-the-board actual cuts in all federal programs to meet the 1 percent reduction, and that means all: in defense, Social Security, Medicare, Food Stamps, defense, and national security spending. Everything.

Mack’s plan may seem draconian to some. It would cut the accumulated budget deficits by an estimated $7.5 trillion over 10 years — more than three times the amount achieved by the debt-ceiling deal that Congress approved last Tuesday.

But it actually has a rather modest impact on reducing our total national debt. It won’t be until eight years from now that the budget will be in balance and the national debt starts getting paid down.

The Mack Penny Plan seems a good place to start — it is simple, it makes common sense, and with some adjustments protecting the poor and the unemployed, it could be seen as fair even to many of the most liberal Democrats.

Despite our philosophical differences, I am a great admirer of Rep. Mack. I respect his deeply felt conservative philosophy and values. Most of all, I respect his ability to disagree agreeably.

In this time of crisis — and I believe our national debt is a genuine and historic crisis — we need members like Connie Mack who know how to reach across the aisle, as I have seen him do many times, to find common solutions.

The Mack Penny Plan deserves serious consideration — as serious as the man who proposed it.

Read full Newsmax.com report here.

THE ONE CENT SOLUTION:

The One Cent Solution contains three key distinctive elements.

The Three Keys

1. A Plan that Works

The One Cent Solution gradually reduces total government spending (excluding interest payments) by making cuts equal to one cent of every dollar each year for six years. It also caps overall spending at 18% of GDP beginning in 2018 and beyond. This simple solution balances the budget by 2019, reduces federal spending by $7.5 trillion over 10 years and restores America’s financial future.

2. Legislative Strategy

The One Cent Solution supports the One Percent Spending Reduction Act of 2011, which entails four key provisions.

Spending caps on total government spending (both discretionary and entitlement) equal to a one percent reduction in spending each year for six years.

Congressional action to reform spending programs to meet the One Percent caps. In meeting the caps, Congress may cut some programs more than 1 percent and some less, as long as total government spending is reduced by 1 percent each year for six years;

If Congress fails to enact the needed reforms, then mandatory, “across the board” spending cuts occur each year to bring spending reductions into line with the One Percent spending caps.

Starting in the seventh year (2018) and thereafter, the bill caps overall spending at 18 percent of Gross Domestic Product (GDP) to ensure that it is line with expected future revenues. (Historically, federal revenues have averaged 18 percent of GDP.)

3. Public Support

As citizens, we must own the problem. It’s just not right for us to pass on this debt to our children and grandchildren. Tough decisions are ahead. The key to balancing the budget and reducing the national debt is you.

If we sign on 1 million citizens with representation from every congressional district, we can get Congress to focus on this solution and give them the political will to act. The One Cent Solution is a true American grassroots movement, started by citizens who believe good ideas can originate outside of Washington.

Through the One Cent Solution campaign, we are not only insisting upon action, we are providing a nonpartisan, simple, equitable way to get the job done.

Go to The One Cent Solution site here.