Politics & Policy

Deroy Murdock’s Call for Candidate Engagement: We Hear You

(HOOKMEDIA Design/Dreamstime)
Trump should endorse this straightforward plan for reducing deficits — and so should Clinton.

Invoking the Beatles’ plea in “Hey Jude” to “take a sad song and make it better,” National Review columnist Deroy Murdock recently issued a friendly challenge to several think tanks. He urged them to pitch specific policy reforms to Donald Trump. National Taxpayers Union Foundation (NTUF) was given the mission of convincing Trump to support a balanced-budget proposal known as the Penny Plan. We’re up for it.

The Penny Plan is a simple reform to cut spending by one cent for each dollar spent and limit outlays to the amount of incoming revenues. It was last introduced in Congress as the One Percent Spending Reduction Act of 2014. That bill would have reduced outlays by 1 percent for three consecutive years. Starting in the fourth year after passage, a spending cap would be instituted. At 18 percent of GDP, it would match the average level of tax receipts to the federal government, setting a path for a balanced budget.

When pressed about the Penny Plan back in March, Trump told Sean Hannity that he liked the concept of it, but he has not given it an explicit endorsement. There are a number of reasons why not only Trump should support the plan, but so should Hillary Clinton, along with Libertarian-party nominee Gary Johnson.

The biggest reason is the worsening fiscal outlook. The Congressional Budget Office (CBO) projects that the government is on pace to spend $544 billion more in fiscal year 2016 than it will collect in taxes. Worse is to come without a change of course: CBO foresees deficits rapidly exceeding $1 trillion per year by 2020.

As the Treasury continues to borrow to maintain this excessive spending, the debt held by the public alone (irrespective of deceptively named “trust fund” debt) will rise from 75 percent of GDP this year to over 86 percent in a decade. And the next president will need a solution quickly next year: A budget agreement in 2015 suspended the limit on the level of public debt the government can issue, but the debt ceiling will be reset in March 2017, just two months after the inaugural. The long-term budget picture is even worse. Without reform, entitlement programs will impose an immense burden: Trillions of dollars of unfunded liabilities will loom over taxpayers.

Without reform, entitlement programs will impose an immense burden: Trillions of dollars of unfunded liabilities will loom over taxpayers.

Trump should be worried about this outlook, but Clinton might also recognize a threat here: absent massive, economy-crushing Sanders-style tax increases, many of her poll-tested spending promises will be difficult to fund in a budget swamped by debt service and out-of-control benefit programs.

Another reason this plan should be supported is that the government spends too much through too many overlapping or ineffective programs. And the candidates acknowledge this. In the primary debates, Clinton, Sanders, and Trump each made at least one statement about the problem of wasteful or duplicative government programs.

This is not a new issue: The past several administrations have been engaged in a seemingly endless war on budgetary waste. President Obama’s and George W. Bush’s budget submissions to Congress included lists of programs to reduce or terminate due to performance or overlap. President Clinton sought to “reinvent government” so it could perform better and cost less. In the 1980s, President Reagan’s Grace Commission issued a report on rooting out federal inefficiencies. Under President Carter, there was a National Conference on Fraud, Abuse and Error. This “war” on waste goes back at least to the 1970s.

The fact that the problem persists is a sign that a new strategy is needed.

On CandidateCost.org, NTUF is tracking the cost of the spending-related policy promises of the candidates. We have yet to see a great deal of specifics regarding what they would do to cut outlays. The Penny Plan would bring a fresh approach to reining in the federal budget. It would increase fiscal responsibility without imposing new or higher taxes that could hamper economic growth, costing jobs and opportunities for Americans.

Moreover, linking spending levels to the size of the economy will incentivize lawmakers to pursue pro-growth policies, which should include tax reform and open trade.

Perhaps most important — given a recent Gallup poll that found the number of Americans who think they pay too much in taxes has reached a 15-year high of 57 percent — the Penny Plan would help protect Americans from the grasping hand of the taxman. The Beatles sang a “sad song” about him too.

— Demian Brady is the director of research for the National Taxpayers Union Foundation.

Most Popular

Sports

Hurray for the NBA

Last month, just before the Final Four, I did a Q&A on college basketball with our Theodore Kupfer. Teddy K. is back, by popular demand, joined by two other experts: Vivek Dave, an old friend of mine from Michigan, who has long lived in Chicago, and David French, National Review’s Kentucky Kid, now ... Read More
Economy & Business

Trade Misunderstandings

I was distracted by other policy topics last week but not enough not to notice Peter Navarro’s article in the Wall Street Journal, headlined “China’s Faux Comparative Advantage.” Considering Navarro’s position in the White House, it is unfortunate that it demonstrates some serious misunderstandings ... Read More
Culture

Monday Links

A Supercut of Epic Movie Explosions. Can You Solve These 10 Medieval Riddles? The cost to make a Margherita pizza: $1.77. How much restaurants charge on average for a pizza: $12. The actual costs of restaurant foods. Vintage animation lessons -- how to make things cute. London's "Great ... Read More
World

On Trade, No One Is Waiting for Washington

President Donald Trump’s flips and flops on trade are now as ubiquitous as his 5:00 a.m. tweets. Many predicted that trade-expansion efforts would come to a standstill and world commerce would suffer amidst all the uncertainty. Instead, the precise opposite has happened. In the last few months, it’s become ... Read More
National Security & Defense

Trump’s Syria Quandary

President Trump raised eyebrows recently when he ended a tweet lauding the airstrikes he’d ordered against chemical-weapons facilities in Syria with the words “mission accomplished.” The phrase, of course, became infamous in the aftermath of the invasion of Iraq, when President Bush used it in a speech ... Read More