Mack’s ‘penny plan’ for budget-balancing could cost plentyby John Kennedy | October 5th, 2012
Republican U.S. Senate candidate Connie Mack’s signature “penny plan” for balancing the federal budget could force deep cuts in Medicare, Social Security and defense spending, the independent Congressional Research Service reported this week.
Mack spokesman David James, however, dismissed the findings as “one opinion.” He also said the goal of Mack’s plan is to force Congress and the president to reach agreement to avoid the kind of slashing included in the CRS findings.
“It’s only if agreement is not reached that 1 percent cuts across the board would occur,” James said Friday.
The CRS study was prompted by a request from Sen. Bernie Sanders, an independent from Vermont. Mack’s plan has 70 co-sponsors in the House and 14 supporters in the Senate. Sanders, who sides with Democrats on most issues, is among those who fear the legislation could gain new strength following the November elections.
Under the proposal, the federal government would reduce spending by 1 percent each year over six years. In the seventh year, federal dollars would be limited to 18 percent of gross domestic product, a measure of the overall economy’s size. By Year 8, the plan would balance the budget and save $7.5 trillion over 10 years, Mack and supporters say.
If Congress and the president couldn’t reach an agreement about what to cut, the plan would trigger automatic across-the-board spending cuts over a decade, beginning in 2013. CRS concluded that would force an almost $2.9 trillion reduction in defense spending; $1.1 trillion from Social Security; and $211 billion from Medicare.
For his part, Mack has been hitting his opponent, two-term Democratic U.S. Sen. Bill Nelson for supporting the Budget Control Act, part of last year’s debt ceiling fight. The measure’s central, sequestration tool would force across-the-board cuts that could hit veterans benefits and defense spending hard, especially in Florida and other military heavy states.
James, however, defended Mack’s blistering of his opponent – even though the Republican also advocates dangling the potential of deep cuts to balance the budget. The difference? Timing, he said.
“It’s huge. In terms of sequestration, that’s a $500 billion blow to the Defense Department in one year,” James said.