The Thing About Balancing the Budget Is It Requires Actual Substantive Cuts

And Republicans Aren't Willing to Reduce Spending Where It Really Counts

Republicans are trying to have a debt ceiling fight with President Biden, and they’re not really gaining any traction. For the past few months, Republicans have said they wanted to cut spending, but they’re not providing much in terms of actual substantive cuts they’re willing to make that would make a dent in the budget deficit, which, according to the Congress Budget Office, is projected to reach $1.4 trillion in FY 2023, or 5.4 percent of gross domestic product (GDP). For now, they’ve largely focused on “woke spending,” and it’s a sad joke.

As if this wasn’t bad enough, Republicans have recently discovered that they can’t balance the budget without making cuts to entitlement programs like Medicare, Medicaid, and Social Security. Republicans are unwilling to touch those programs. These programs represent 61.3 percent of all federal spending. With Republicans’ unwillingness to cut defense discretionary spending, that leaves only nondefense discretionary spending as the place to make cuts. As I explained in February, Congress could eliminate all nondefense discretionary spending in FY 2024 through FY 2033 and still run a budget deficit of 4 percent of GDP in FY 2033.

Several years ago, Sen. Rand Paul (R-KY) introduced the “Penny Plan”—a 1 percent across the board spending cut. Social Security was exempted from the cut. I can’t remember when Paul first introduced the Penny Plan. The first mention of the phase was in April 2018, so we’ll go with that, although he may have introduced it in prior years. In any event, Paul voted a vote on the proposal, S.Con.Res. 36 in May 2018, and it failed by a vote of 21 to 76.

Eventually, the Penny Plan became the “Pennies Plan.” Because federal spending had picked up the pace, a 1 percent cut wouldn’t balance the budget. Paul had to reintroduce the budget proposal in April 2019, S.Con.Res. 11, as a 2 percent cut. In February 2021, the Pennies Plan required a 3 percent cut. Just six months later, in August 2021, the Pennies Plan became a 5 percent cut. The most recent Pennies Plan required a 6 percent across the board cut, excluding Social Security, to balance the budget. Introduced in June 2022, the “Six Pennies Plan,” S.Con.Res. 41, was rejected by the Senate by a vote of 29 to 67.

Of course, the pace of the growth in federal spending was exacerbated by COVID-19. That said, the Penny Plan had to be changed in 2019 to the Two Pennies Plan. That was nearly a full year before COVID-19 hit the United States. The growth in federal spending was already frustrating to fiscal conservatives before COVID-19. This is why it’s really difficult—dare I say, impossible—for me to take Republicans seriously when they talk about spending cuts. I’ve heard this shit before.

Republicans have two problems. The first is credibility. There is none. It doesn’t exist. Seventy percent of House Republicans and 66 percent of Senate Republicans voted for the Bipartisan Budget Act of 2018, which increased discretionary spending by $143 billion in FY 2018 and $152 billion in FY 2019. That’s a $295 billion discretionary spending increase over two years when Republicans had full control of Congress and the White House. Now, in July 2019, only 33 percent of House Republicans voted for the Bipartisan Budget Act of 2019, but 55 percent of Senate Republicans, who had the majority in the chamber, voted for the bill. Republicans had the majority in the Senate at the time and were in the minority in the House. The Bipartisan Budget Act of 2019 increased discretionary spending by $169 billion in FY 2020 and $153 billion in FY 2021—$322 billion in total for two years.

I was on the Hill during the debate in the House over the Bipartisan Budget Act of 2019, which took place on July 25, 2019. I remember this vividly. I was sitting in the Subway in the Rayburn House Office Building, enjoying a turkey sub, and reading the captions on the TV. Rep. Steve Womack (R-AR), who was the ranking member of the House Budget Committee at the time, defended the budget. Womack said, “I am reminded of the old Bronx-born bank robber, Willie Sutton, Mr. Speaker, who when captured, legend has it, was asked, ‘Why do you rob banks?’ He said, ‘Because that's where the money is.’ If we are going to have a meaningful discussion, a constructive discussion about how we put the balance sheet of the U.S. Government back in order, we cannot have an intellectually honest conversation if we are ignoring the bottom line here. In 10 years, mandatory spending has grown 10 times the rate of discretionary spending, yet we are not talking about that today.”

Translation: It’s perfectly okay to increase discretionary spending even while we’re running massive budget deficits because the real problem is mandatory spending. Womack voted for the Bipartisan Budget Act of 2019, as did Minority Leader Kevin McCarthy (R-CA), Minority Whip Steve Scalise (R-LA), and Rep. Elise Stefanik (R-NY). Of course, these members are now the speaker, majority leader, and conference chair, respectively. The only member of the big four of the current leadership team who voted against the bill was Rep. Tom Emmer (R-MN), who’s now the majority whip.

That brings me back to looming failure of House Republicans to produce a budget resolution. At the end of the current budget window, FY 2033, the budget deficit is projected to exceed $2.8 trillion, or 7.3 percent of GDP. It’s impossible to balance the budget without reforming entitlement programs that Republicans have said they’re not going to touch. It’s such a wasted opportunity. The silver lining—if there is one—is that Republicans, if past is prologue, weren’t really going to stick by those cuts.