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house Bill H.R. 5637

The Penny Plan: Should Federal Spending be Cut by 1 Percent for Five Years then Capped?

Argument in favor

Cutting federal spending is a necessity if the U.S. is going to avoid descending into a debt crisis. Spending one percent less on the federal government for five years will allow the budget to balance and stay that way. It’s a sensible approach that will put the nation’s fiscal house in order.

Garth's Opinion
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08/04/2016
Every cut is a good cut. The government should be doing less, spending less, bombing less, and stealing less of my hard earned federal reserve notes
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operaman's Opinion
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08/04/2016
It's about time. Simple solution for a monstrous debt. It's a step towards a solution, but liberal pigs will squeal about the poor, the unborn awaiting their abortion, transgenders awaiting their physical change or drugs addicts missing a government methadone treatment. God gave man legs to stand upright. So America, stand up and act like the man God created.
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Carly's Opinion
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08/03/2016
Voting yes doesn't mean that we vote for cuts on education or other favorable government programs. Voting yes helps ensure the government, regardless of wether we are right or left, makes a habit of spending more efficiently. The idea is for you to vote for offices based how they will spend that smaller budget.
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Argument opposed

Reducing federal spending by one percent per year for five years will have a negative impact on the economy and the government’s ability to meet its obligations. Rather than cutting spending, a tax increase could bring in more revenue to help reduce the deficit and the national debt.

Robert's Opinion
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08/03/2016
Given that congress is so right leaning at the moment, instead of cutting the overly bloated military, all the cuts would end up going to the social programs we need.
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aliamcc's Opinion
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08/04/2016
Mandatory cuts without guidance only ensures that the vulnerable will be the first on the chopping block. That's not what our country is about. No.
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Vaughn's Opinion
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08/04/2016
Until defense spending is specifically targeted for reductions, no to any & all mandated cuts. We all know that archaic & obsolete weaponry is still being manufactured to the tune of tens of billions of dollars, so that congress members can save face with their constituents in the districts where those archaic & obsolete weapons are manufactured (same is true of costly post offices that congress won't allow to be closed). As with sequestration, mandatory cuts without specificity do more disservice to the American people.
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What is House Bill H.R. 5637?

This bill would establish new spending caps for the federal budget by requiring one percent of the budget to be cut each of the next five years (through fiscal year 2021), after which total spending would be limited to 18 percent of U.S. GDP. It wouldn’t mandate spending cuts in any particular area, but it would give Congress the ability to make targeted cuts as long as total spending is reduced by one percent each year.

Starting in fiscal year 2023, total projected spending could not be less than the previous year’s projection, meaning that the federal budget would stop shrinking, but its growth would be constrained by the 18 percent of GDP cap. If the U.S. economy were to enter a recession and shrink, the budget wouldn’t get smaller along with it, instead remaining at or above the level it had been the year prior.

The Office of Management and Budget (OMB) would be required to sequester funding that exceeds these budget caps through automatic cuts. Most existing exemptions from sequestration would be eliminated, other than interest payments on the national debt so as to avoid default.

If the OMB projects that a sequestration will occur, congressional budget committees would be allowed to report a resolution that requires congressional committees to change existing law to make the needed spending cuts.

Impact

Federal agencies and other entities receiving funds from the government; Congress; and the OMB.

Cost of House Bill H.R. 5637

A CBO cost estimate is unavailable.

More Information

In-Depth: Sponsoring Rep. Mark Sanford (R-SC) introduced this bill in the hopes of staving off an impending debt crisis by cutting the growth of government spending continues to allow the budget to balance and prevent the national debt — which tops $19 trillion — from increasing:

“The idea is simple: cut a single penny from every dollar that the federal government spends for the next five years. By 2021, the budget would be balanced and would remain balanced with federal spending capped at 18 percent of Gross Domestic Product (GDP) from then on… Spending in Washington is out of control, and the impending financial trainwreck continues to get closer and more devastating.”

This legislation currently has the support of nine cosponsors — all of whom are Republicans.


Of Note: The cost of servicing America’s $19 trillion national debt threatens to exceed the amount that the federal government spends on defense as soon as 2021 (at a level of $600 billion per year), and by 2022 it is forecast to exceed nondefense spending as well. Currently, the U.S. spends over $200 billion annually servicing its debt.

This spike is anticipated because interest rates have been relatively low in recent years, and if they return to their historic levels the cost of repaying what the federal government borrowed will increase.


Media:

Summary by Eric Revell

(Photo Credit: Public Domain / Pixabay)

AKA

One Percent Spending Reduction Act of 2016

Official Title

To prevent a fiscal crisis by enacting legislation to balance the Federal budget through reductions of discretionary and mandatory spending.

bill Progress


  • Not enacted
    The President has not signed this bill
  • The senate has not voted
  • The house has not voted
      house Committees
      Committee on the Budget
      Committee on Rules
    IntroducedJuly 6th, 2016
    Every cut is a good cut. The government should be doing less, spending less, bombing less, and stealing less of my hard earned federal reserve notes
    Like (36)
    Follow
    Share
    Given that congress is so right leaning at the moment, instead of cutting the overly bloated military, all the cuts would end up going to the social programs we need.
    Like (121)
    Follow
    Share
    Mandatory cuts without guidance only ensures that the vulnerable will be the first on the chopping block. That's not what our country is about. No.
    Like (80)
    Follow
    Share
    Until defense spending is specifically targeted for reductions, no to any & all mandated cuts. We all know that archaic & obsolete weaponry is still being manufactured to the tune of tens of billions of dollars, so that congress members can save face with their constituents in the districts where those archaic & obsolete weapons are manufactured (same is true of costly post offices that congress won't allow to be closed). As with sequestration, mandatory cuts without specificity do more disservice to the American people.
    Like (42)
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    Share
    I support a balanced budget, but they'll cut spending where it's needed the most on programs for folks who need them the most (Housing, Ed, Health, etc.). Increase taxes for those who can afford it. I don't get what the argument is!
    Like (31)
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    ONLY if those cuts are made primarily to the gluttonous military.
    Like (25)
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    It's about time. Simple solution for a monstrous debt. It's a step towards a solution, but liberal pigs will squeal about the poor, the unborn awaiting their abortion, transgenders awaiting their physical change or drugs addicts missing a government methadone treatment. God gave man legs to stand upright. So America, stand up and act like the man God created.
    Like (25)
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    I support balancing the budget. I do not support letting current Congressional leadership decide how.
    Like (20)
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    Voting yes doesn't mean that we vote for cuts on education or other favorable government programs. Voting yes helps ensure the government, regardless of wether we are right or left, makes a habit of spending more efficiently. The idea is for you to vote for offices based how they will spend that smaller budget.
    Like (16)
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    Instead of making cuts to unnecessarily enormous military spending, this bill will only work toward making cuts into necessary and important programs.
    Like (12)
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    1% is simply not enough. I truly believe that government is almost 80% waste and 20% necessity. I will not be pushed by fear that either terrorism will take over if defense is cut or that people will be laying dead in the street if social programs will be cut. We need to get back to the essentials of government and stop their over reach by limiting their pocket book.
    Like (9)
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    If we need more revenue, TAX CORPORATIONS at the level of the Eisenhower era! In your insane pledge to never raise taxes, you are destroying the country. Trickle down hasn't worked for 40 years, wake up & stop the insanity!!!
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    http://www.heritage.org/~/media/InfoGraphics/2012/10/SRfedspendingnumbers2012p12chart1_600.ashx Check out this graph showing how military spending has decreased and entitlement spending increased! There are ancient unused or unproductive programs that need to go, and the unproductive parts of government would go first. We need to stop spending beyond our means before we harm our kids and grandkids, so they don't have to pay for money we spend on ourselves.
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    What? Just arbitrarily cut programs? Cut military! Increase Corporate taxes! Tax the things that are bad for people! These are not revolutionary ideas!
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    How about we do this instead: Congress passes laws that prohibit the use of offshore tax havens, and therefore, forces the rich who use them to actually pay their fair share of taxes to help reduce the federal deficit. The U.S. loses about $110 billion EVERY YEAR because of these tax havens, so let us get rid of them!
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    Waste and inefficiency in the U.S. government are rampant. The federal government does too many things that would be done better by individuals or businesses in the private sector, or by state and local governments, or that should not be done at all. Moreover, unnecessary taxing, spending, and regulating distorts economic activity in numerous ways, leading to less growth and prosperity than if the government refrained from acting outside its proper constitutional domain. Ultimately, succeeding in eliminating waste and controlling government spending requires reducing the size and scope of the federal government.
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    Sounds good to the grossly uninformed but balancing the federal budget is nothing like balancing ones check book. Just stop with all the nonsensical campaign gimmicks and govern.
    Like (5)
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    Spending does need to cut. I fear that only 1 percent would still not be enough. To balance a budget fails government programs need to cut completely to make a bigger dent
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    if corporations actually paid their taxes, that would be a better start.
    Like (5)
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    Or we could act like adults and make responsible decisions based on requirements of the time, without handcuffing ourselves in advance. We don't need gimmicks. We need wisdom.
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