July 8 — The Senate Budget Committee chairman reintroduced a bill that aims to balance the federal budget by cutting overall federal spending by 1 percent annually.
“The Penny Plan is a simple and smart solution that is designed to cut spending in order to balance the budget. Everyone should be able to live with 1 percent less in order to help bring this country back from the brink of catastrophic fiscal failure,” Sen. Michael Enzi (R-Wyo.) said in a July 7 announcement that he had filed the bill (S. 3140).
Enzi previously filed the bill during the 113th Congress. It would mandate that Congress cut spending—without specifying where—by 1 percent annually for five consecutive years. Once the budget was balanced, it would restrict overall federal outlays to 18 percent of GDP.
The bill would establish “outlay caps” to limit overall federal spending. Unlike the caps on discretionary spending in the 2011 Budget Control Act (Pub. L. No. 114-25), the caps would apply to the total of annually appropriated spending plus mandatory spending for programs like Medicare and Social Security. For fiscal 2017, the cap would apply to $3.645 trillion in spending, meaning cuts of $36.5 billion in spending would be needed to meet the cap.
A companion bill (H.R. 5637) was introduced in the House by Rep. Mark Sanford (R-S.C.).
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