WASHINGTON, D.C. – U.S. Senator Rand Paul today announced plans to introduce the Cut, Cap, and Balance Act of 2015 once the U.S. Senate is back in session next week. Building off of the Cut-Cap-Balance effort in 2011, this legislation would cut the 2016 deficit in half, cap spending going forward on a path to balance by 2021, and require Congress to pass a balanced budget amendment to the Constitution before raising the nation’s debt limit.
“Bold action is needed to address our nation’s debt crisis – our national debt currently stands at $18.4 trillion. We cannot keep piling debt on top of debt forever,” Sen. Paul said.
Sen. Paul also plans next week to introduce the Default Prevention Act, which prevents a default whenever the United States has reached the national debt limit and prioritizes spending as revenue comes in.
Background information and top-line points can be found below.
The Cut, Cap, and Balance Act of 2015
Cuts the deficit in half this year.
- $207 billion in cuts this year
- Social Security, Medicare, military pay, veterans’ benefits, and interest are not subject to the additional cuts
Caps spending going forward at a balanced level of 18%.
- Provides a glide path to balance at 18% of Gross Domestic Product (GDP) in 5 years
- Caps spending at 18% of GDP going forward
Balances the budget permanently through a balanced budget amendment.
- No debt limit increase until Congress passes a balanced budget amendment and sends it to the states for ratification
The Default Prevention Act
Prevents a default whenever the United States has reached the national debt limit and prioritizes spending as revenue comes in.
- Gives debt service, military pay, Social Security, and Medicare payments priority over other spending as revenue comes in.
- Average monthly revenue is more than enough to cover these and other priorities.
- Average monthly revenue is $271 billion
- Average monthly spending on priority items is $158 billion per month
- On average there is $113 billion per month to spend on other programs