Sen. Rand Paul (R-Ky.) said the national debt “now costs $362,000 per taxpayer” and that his Six Penny Plan would balance the budget in five years: “It’s that simple.”
On Friday, Paul said on X, “The national debt now costs $362,000 per taxpayer. The way to address this crisis is with the Six Penny Plan. Make even, across-the-board cuts, and we will balance the budget in 5 years. It’s that simple.”
Paul’s Six Penny Plan
In an X post on Thursday, Paul noted that “No matter which party controls Congress, spending goes up. The uniparty is in the driver’s seat, and the bills keep getting bigger.”
He said the plan “would cut six cents off every projected dollar that the federal government spends.” “Washington just needs the will to do it,” he added.
Six Penny Plan Details
In September, Paul promoted the plan on X as the national debt passed $40 trillion. The plan proposes cutting six cents from every projected dollar of federal spending, reducing spending to 94% of projected levels in the first year, with annual cuts continuing until the budget is balanced within five years. Under the proposal, spending would fall 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 higher spending and rising interest costs now require deeper cuts. Treasury data showed the national debt exceeded $40.55 trillion as of November.
Schiff on Interest Costs
Earlier this week, veteran investor Peter Schiff said on X that interest on the national debt will pass Social Security next year, after passing defense spending a few months ago. On “The Peter Schiff Show” podcast, he said that would happen even if interest rates do not rise. He said interest payments are now 40% higher than defense spending, which he put at about $1 trillion, while Social Security spending is $1.7 trillion.
Schiff attributed the rise to maturing government debt with coupon rates of 0.5% to 2.5% that must now be refinanced at 4% to 5%. Separately, the Treasury Department reported net interest spending of $1.052 trillion for the fiscal year that ended Sept. 30, above the $965 billion spent on national defense.
Disclaimer: This content was partially produced with the help of AI tools and was reviewed and published by Benzinga editors.
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