In a Time of Universal Deceit, Telling the Truth is Revolutionary.
Saturday, April 20, 2024

Rand Paul’s impossible claim: Balancing the federal budget

Sen. Rand Paul, R-Ky. (AP Photo/Carolyn Kaster)
Sen. Rand Paul, R-Ky.
(AP Photo/Carolyn Kaster)

Sen. Rand Paul is campaigning for the 2016 Republican presidential nomination as a man who wants to upend the ways of Washington. In one way, though, he’s a creature of the capital: He carries on a long tradition of promising the implausible, if not the impossible, on the budget.

The Kentucky senator opened his campaign this week with the “extraordinary” thought that the federal government be forced to spend no more than it takes in. This, while cutting taxes, increasing military spending and asking people to imagine “what a billion-dollar stimulus could do for Detroit or for Appalachia” from his plan to establish “economic freedom zones.”

He is neither the first, nor certainly the last, to hold out the hope for a balanced budget — while at the same time glossing over what happens if the government is truly made to live within its means.

Some combination of Social Security, Medicare, the armed forces, domestic security, roads, medical research and much more wouldn’t look the same if that happened.

Paul told his campaign-kickoff crowd Tuesday: “Currently some $3 trillion comes into the U.S. Treasury. Couldn’t the country just survive on $3 trillion? I propose we do something extraordinary. Let’s just spend what comes in.”

What comes in: The government is projected to collect $3.5 trillion in revenue next year.

Where it goes: Of that money, nearly $2.5 trillion will go for Social Security, Medicare and other automatically paid benefit programs, and $277 billion to pay interest on the debt. That’s according to projections from the nonpartisan Congressional Budget Office.

What’s left: If spending no more than that $3.5 trillion, the government would have $800 billion left over to pay for the Defense Department, Homeland Security and the budgets of every other federal agency. That’s one-third less than the $1.2 trillion those agencies are currently projected to spend.

Lawmakers could make deeper cuts in some programs, while sparing others. But on average, every agency would get just $2 for every $3 it would have been expected to have next year. That’s a massive reduction by any standard, and one for which most budget-conscious Republicans have not had the stomach.

Perhaps the main question about Paul’s pledge, said Michael Strain at the conservative American Enterprise Institute, is “how literally do you take it?”

“It’s quite reasonable, as a general rule, under normal circumstances, to align spending and revenue,” Strain said. But the economy can run into a meltdown, a terrorist attack or other calamity, requiring the government to spend on things it did not expect.

Lawmakers do have the option of cutting the automatically paid benefits, because even entitlements like Medicare are not cast in stone. Yet those programs are quite popular among voters, and doing so would risk a political firestorm.

Paul drafted a 2013 plan meant to achieve a balanced budget in five years, and one of his proposed steps would be the partial privatization of Social Security. That’s something he did not mention in his campaign kickoff speech.

Instead of taking on the prime drivers of debt in his speech, Paul followed the familiar Washington path of criticizing a few spending items that are unpopular with some people but would not save much money if eliminated, such as foreign aid.

“Let’s quit building bridges in foreign countries and use that money to build some bridges here at home,” he said to applause.

As for big-ticket items, Paul’s earlier balanced-budget plan was predicated on a cut in military spending and in the number of troops, a position that distinguished him from others likely to seek the GOP nomination.

But as his campaign launch drew near, he proposed a more than $48 billion increase in the Pentagon budget as a member of the Senate, paying for that increase primarily by cutting refundable child-tax credits, supplemental security income and welfare.

“We need a national defense robust enough to defend against all attack, modern enough to deter all enemies, and nimble enough to defend our vital interests,” he told supporters at his campaign launch.

Paul also proposes to roll back President Barack Obama’s health care law, a step that actually would cost money. Repeal would reduce tax revenues by $1 trillion over a decade, the nonpartisan budget office said in 2012.

One way to balance the budget without making such dramatic cuts is to increase the amount of money that comes in.

But tax increases are a non-starter for Paul. He goes the other way, proposing a 17 percent flat tax and elimination of what his website calls double taxation, “including capital gains, dividend, estate, gift and interest tax.”


Associated Press writer Alan Fram contributed to this report.

A occasional look at claims by public officials that take shortcuts with the facts or don’t tell the full story


Copyright © 2015 Capitol Hill Blue

Copyright  © 2015 The Associated Press. All Rights Reserved

2 thoughts on “Rand Paul’s impossible claim: Balancing the federal budget”

  1. Sooner or later, balancing the budget will require cutting military spending – much more than the Sequester that Beltway conservatives got so enraged over. I have a hard time seeing them agreeing to that no matter how much they say they want to balance the budget.

  2. Just about every part of the tax code is there to make some economic activity pay their fair share of taxes. If you change it dramatically, some activities will benefit enormously and some will become unfeasible. This is one of those things you want to think about very carefully and run some computer models BEFORE you change it. Simple is good, but too simple just doesn’t work.

    Blindly jumping in with changes like a flat tax would have massively disruptive effects on the economy. I think some of Paul’s ideas are based on the assumption that he won’t win, so he can propose any nonsense he wants.

Comments are closed.