Florida Republican congressman Connie Mack has put forward an ingenious approach to deficit reduction: cut one penny (1%) from every dollar spent for six years. This modest across the board reduction would be in place of the percentage increases every year that have become the norm (so that even talk of reductions are actually reductions in the rate of growth). Even some liberals are coming out in favor of this option. One of them, ex-Clinton official Lanny Davis, explains how it would work:
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% 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% of GDP to 18% of GDP by 2019, after which the budget would be in surplus.
There is an automatic spending cut “trigger” under Mr. 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 one-percent-actual-spending cut required under Mr. Mack’s measure, then there would be automatic, across-the-board actual cuts in all federal programs to meet the one percent reduction, and that means all: in defense, Social Security, Medicare, Food Stamps, defense and national security spending, everything.
Mr. Mack’s plan may seem draconian to some. It would cut the accumulated budget deficits by an estimated $7.5 trillion over ten years – more than three times the amount achieved by the debt ceiling deal congress approved last Tuesday. . . .
Democrats need to find a spending cut formula that they can live with. 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.
What do you think of this idea?