Committee for a Responsible Federal Budget

Sen. Rand Paul Proposes $500B in Annual Spending Cuts

Senator Rand Paul (R-KY) released his plan for cutting federal spending earlier this week in the latest in a wave of Republican spending cut proposals, joining plans released in the last week from Rep. Michele Bachmann (R-MN) and the House Republican Study Committee. However, Senator Paul's proposal is the most aggressive plan released to date. The cuts he advocates amount to a $507 billion reduction in annual federal spending.

In his press release, Sen. Paul said:

I am proud to introduce my own solution to the mounting debt our spendthrift, oversized government has accrued. By rolling back to 2008 levels and eliminating the most wasteful programs, we can still keep 85 percent of our government funding in place. By removing programs that are beyond the constitutional role of the federal government, such as education and housing, we are cutting nearly 40 percent of our projected deficit and removing big-government bureaucrats who stand in the way of efficiency in our federal government.

Paul pledged to take a fresh look at the budget and certainly found many things he was interested in cutting. Most of his proposals to trim the size of the federal government centered on either privatization or devolving authority to the states. He wants to eliminate the Department of Education (except for Pell Grants), eliminate the Department of Energy, and also eliminate the Department of Housing and Urban Development (which he calls a "failure" to improve the lives of poor people and also "played a key role fostering subprime lending that brought the financial system to its knees in 2008"). He supports many of Secretary Gates' cuts to the Defense Department, but simultaneously gives it more authority by adding jurisdiction over the Coast Guard and the U.S. nuclear program. He wants to bring the Departments of Agriculture, Health and Human Services, Interior, Justice, and Transportation down to FY 2008 levels, or lower in some cases. There are additional significant cuts to international aid, federal expenses, and many programs.

 Program/Agency   Savings (Annual)*
 Radically Scale Back Dept. Education (Cut 83%) $78.0 billion
 Eliminate Dept. Housing and Urban Development $53.1 billion
 Cut Defense Department 6.5% $47.6 billion
 Eliminate Dept. of Energy $44.2 billion
 Cut Transportation Dept. 49% $42.8 billion
 Cut Dept. Agriculture 30% $42.5 billion 
 Cut Dept. Health and Human Services 26% $26.5 billion
 Eliminate International Assistance Program $24.3 billion
 Cut Dept. Homeland Security 43% $23.8 billion
 Cut State Department 71% $20.3 billion
 Cut Interior Department 78% $10.9 billion
 Cut Office of Personnel Management 12.3% $9.1 billion
 Cut Justice Department 28% $9.1 billion
 Reduce Federal Travel $7.5 billion
 Repeal Davis-Bacon $6.0 billion
 Cut Commerce Department 54% $5.3 billion
 Cut National Science Foundation 62% $4.7 billion
 End TARP $4.5 billion
 Cut NASA 25% $4.5 billion
 Cut EPA 29% $3.2 billion
 Collection of Delinquent Taxes $3.0 billion
 Cut Dept. of Labor 2% $2.8 billion
 Cut Judicial Branch 32% $2.4 billion
 Cut FCC 22% $2.2 billion
 Eliminate Other Independent Agencies $2.1 billion
 Federal Pay Freeze $2.0 billion
 Cut General Services Administration 85% $1.9 billion
 Cut Corps of Engineers 27% $1.9 billion
 Cut Legislative Branch 23% $1.3 billion
 Reduce the Federal Vehicle Budget $600 million
 Sell Unused Federal Assets $19 billion (one year savings)
 Total $507.1 billion (in the first year)

Note: Numbers rounded to the nearest tenth.

*Numbers from Senator Rand Paul.

These are some of the most aggressive discretionary cuts we have seen to date. We commend Sen. Paul for his enthusiasm to get serious about our deficits and debt. Just weeks into his first term in office, Sen. Paul is making an impact on the critical debate to get our deficits under control.

While domestic discretionary spending is important to address, much more needs to be done. We will also need to look at reforming revenues (especially tax expenditures) and entitlements to right our fiscal ship. The White House Fiscal Commission and other groups have put forth comprehensive plans that deserve consideration, compare them here.

We hope Republicans and Democrats will be able to work together and find a bipartisan consensus that can steer our country back on course. The clock is ticking.