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.

^{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.