Sen. Rand Paul (R-Ky.) pushed a sweeping federal spending-cut proposal as the U.S. national debt surpasses $40 trillion, arguing that Washington must rein in spending to restore fiscal balance.
Paul’s Six Penny Plan Targets Federal Spending
On Saturday, Paul promoted his “Six Penny Plan” on X, saying, “The only way to address our $40 trillion national debt is by reining in spending across the board.”
“My Six Penny Plan does just that,” he said, outlining a proposal to “Cut 6 cents out of every $1 the federal government spends” and “Pay down the national debt and balance the budget in 5 years.”
The proposal would reduce spending to 94% of projected levels in the first year, with 6% annual cuts continuing until the budget was balanced in the fifth year.
Paul said that when he introduced a similar “penny plan” in 2017, a spending freeze was enough to balance the budget, but years of higher spending and rising interest costs now required deeper cuts.
Sen. Mike Lee (R-Utah) said, Paul’s Six Penny Plan would work, while criticizing the “Uniparty” for opposing the proposal.
US Debt Surpasses $40 Trillion
On Tuesday, Economist Michael A. Peterson called the $40 trillion U.S. debt an “urgent problem,” warning that excessive government spending and rising interest costs were shifting the burden to younger generations.
Last month, Market strategist Ryan Detrick highlighted the debt’s massive scale, saying $40 trillion in $1,000 bills would form a stack 72 times higher than Mount Everest. Treasury data showed the debt exceeded $40.09 trillion as of Aug. 25, 2026.
Economist Peter Schiff warned that the growing debt could fuel higher inflation, arguing that increased Federal Reserve purchases of Treasuries and money creation could push consumer prices higher.
Debt Hits 100% of GDP
In July, publicly held U.S. debt had surpassed 100% of GDP, marking the first time since 1946 that federal debt exceeded the size of the American economy.
Analyst Steve Rattner highlighted the historic milestone, while Maya MacGuineas attributed the borrowing surge to decades of bipartisan inaction on spending and tax policy.
Rising debt-servicing costs had also put increasing pressure on the federal budget and fueled concerns over Washington’s fiscal management.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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