7-Year Economic RESCUE Plan
A Comprehensive Strategy to Balance the Federal Budget, Regain American Competitive Advantage, and Boost Economic Growth for the Sake of America’s Next Generation
Strategy to Balance the Federal Budget in 7 years
The recent downgrade of the U.S. government by Fitch Ratings is a wake-up call that our current runaway spending and broken budget process cannot continue. Our fiscal system is headed toward a crisis; we need a President who has the courage to set a new path.
I’ve put together a plan to attack the deficit and bring the budget back into balance in 7 years. Moreover, transparency and accountability must be restored to the way that Washington spends taxpayers’ money.
First, I’ll warn you right now, many critics – including many Republicans and likely some of my opponents in this primary – are going to say that trying to balance the federal budget in 7 years is, “too much, too fast.”
Let me remind you that those are the same people who watched the deficit more than double over the past 7 years from $620 billion to $1.375 trillion.
According to the U.S. Treasury, spending in FY 2023, through June, was 10 percent higher than in 2022. That’s another $455 billion, and the fiscal year isn’t over yet.
When is Washington’s out of control spending going to stop? When will our federal government’s excessive borrowing get under control?
The Nobel Prize winning economist Milton Friedman wrote a book almost 40 years ago entitled Tyranny of the Status Quo. Indeed, keeping Washington’s fiscal status quo in place has already saddled us with mountains of debt and mortgaged our children’s and grandchildren’s future. It is time to look at what we’re doing to the next generation.
Consider our country’s debt. The best way to look at federal debt and how Washington is living beyond its means – or our means as taxpayers – is to consider debt as a percent of the nation’s GDP. The federal debt-to-GDP was 118 percent at the end of Q1 2023
In simpler terms, the federal government owes more than the U.S. economy is worth!
Back when Dr. Friedman wrote his book, the debt was 4.7 percent of GDP. Moreover, America sacrificed and acted to save the world during World War II, yet the federal debt at its high point in 1943 was 29.6 percent of GDP – less than one-third of what it is now.
That’s a sobering thought given the state of the world today.
Reigning in spending and putting an end to our government’s excessive borrowing is fundamental to grow the U.S. economy, shore up our regional banks, and save the U.S. dollar’s role as the world’s reserve currency.
My 7-Year Economic RESCUE Plan is based on four pillars of action that I will take as President. It won’t be easy, but it has to be done.
Truth in Budgeting
First, we need to change the way the federal budget is written. Unlike household or small businesses, the federal budget is structured to automatically increase every year. The accounting system the government uses is called “baseline budgeting.” Under that system, the previous year’s level of federal spending is adjusted for inflation and the population growth rate each year.
According to the latest projection by the Congressional Budget Office (CBO) that baseline budgeting will add about $2.48 trillion in spending from FY2024 to FY2031 – that increase is already cooked into the books even if Congress never approves another penny increases for any federal program.
Obviously, it goes without saying, two things that would help slow this unchecked growth:
- rein in Biden’s out-of-control inflation, and
- gain control over the border.
Under the Biden Administration, inflation has skyrocketed. In 2022 inflation hit its highest level since March 1980. Moreover, according to the Federation for American Immigration Reform (FAIR), illegal immigration is adding about $150.6 billion in federal spending per year as of 2023 – and has added burdensome costs to border states, like my home state of Texas.
It’s time to make Washington operate under the same rules as every household and every small business in America when it comes to making an annual budget, and that is by starting with the resources that are at hand. Only in Washington is spending the same amount next year referred to as a “cut.”
We need truth in budgeting. Because right now by assuming there is an endless supply of money available through taxes and borrowing, we’re only fooling ourselves.
My first budget submission as President will start with reconciling government spending decisions with the resources we have, not by some automatically inflated baseline.
That’s a constructive place to start. Looking at the latest CBO baseline projections, freezing spending in 2024 actual levels would put the federal budget in balance by 2031 – that’s 7 years.
Further, the cumulative savings from a spending freeze would reduce the interest paid on the debt which is now the fastest growing category of federal spending. According to CBO, net interest payments on federal debt will more than double between 2022 and 2032.
As interest payments grow, some other category of spending has to be cut, eventually. Anyone who has managed a household budget already knows that. We can’t borrow our way into solvency.
Fiscal Leadership to Make Tough Choices
I’ll be the first to admit that writing a budget starting from a spending freeze baseline will require some tough choices, but making tough choices is what taxpayers expect of their elected officials. And they obviously have been let down. If Congress was a football team, it would be a roster made up of 535 punters!
That is why I am running for President – to provide leadership to solve one of the most pressing issues facing our country and its future. Our fiscal system in headed toward a crisis; we need a President who has the courage to set a new path. As a businessman I know we don’t need to cut everything, nor should we. What we need to do is to cut the things to don’t work and invest in the things that do work.
We need to be honest about the tough choices which need to be made, however. Yes, that means reducing discretionary spending, but it also means entitlement reform.
First, starting with nondefense discretionary spending, we need a two percent cut across the board. Our fiscal house is in disarray. We are not in a position to be paying for everything we want, instead we must focus on what we need.
Second, we must save Social Security. Social Security is projected to be insolvent by 2033. Social Security, technically, has two trust funds: the Old Age and Survivors Insurance (OASI) trust fund for retirees and survivors, and the Social Security Disability Insurance (SSDI) trust fund for disabled workers. Those trust funds on a combined basis will be exhausted in 10 years. If that happens, full benefits cannot be paid when they are due – it is estimated that will be a 20 percent cut. Politicians have been irresponsibly ignoring this issue for decades, but it can be ignored no longer. I won’t ignore it.
I will peg Social Security to the growth in GDP over the next seven years; growth will be capped at two percent and in no instance will spending drop below zero.
A new plan for legal immigration, adding more legally employed, and needed, taxpayers to pay into Social Security will also help shore up the system and the economy.
Third, we must enact comprehensive health care reform; we can’t balance the budget without getting health care costs under control. To begin, I will freeze Medicare and Medicaid spending, and then end the monopolies on insurance exchanges, health care providers, and Big Pharma. That will cut costs across the board and go a long way to bringing our entitlement spending under control.
As I said, we need to cut the things that don’t work. One example is Obamacare. That program, through its regulations and subsidies, has ballooned Medicaid costs and provided benefits to people that Medicaid was never intended to cover. For all the billions spent, coverage is now more expensive, and health care choices have decreased. We can’t allow this to continue.
While there are indeed tough budgetary choices to be made, by the same token, there are some easy decisions too. Take President Biden’s absurdly named $739 billion Inflation Reduction Act.
There is so much more unnecessary spending to look at – if our elected leaders would just take the initiative to do so. I will.
For example, programs that are best handled by the States; we don’t need to federalize everything. That’s not what our founders intended.
Programs that no longer serve their purpose; again, it was Milton Friedman in his book who coined the phrase, “Nothing is so permanent as a temporary government program.”
Finally, I’ll cut – and most importantly prevent – waste, fraud, and abuse. Of course, the more the government spends, the more waste, fraud, and abuse there is.
The more than $5 trillion in COVID era programs provide an object lesson in that. Michael Horowitz, Inspector General of the U.S. Department of Justice told Congress that fraud from COVID programs is “clearly in the tens of billions of dollars.” We cannot let that happen again.
Pro-Growth Tax Policy
A key pillar to getting our nation’s fiscal house in order is a pro-growth tax code.
Washington tries to micro-manage the economy with an economically lethal cocktail of high marginal tax rates, with tax credits, loopholes, and misguided incentives stirred in; that doesn’t work.
Too often these breaks are about crony capitalism, benefitting certain politically favored industries. Again, consider the Inflation Reduction Act. Goldman Sachs analyzed the tax credits for electric cars, hydrogen, green manufacturing and more, and concluded that the $391 billion in the IRA over the next 10 years for these provisions would actually cost $1.2 trillion. That’s because those tax credits are not capped.
The Inflation Reduction Act adds 43 new tax credits and deductions to a tax code that is already riddled with too many tax breaks.
The next President will see the 2017 Tax Cuts and Jobs Act – passed under a Republican President, Republican House, and Republican Senate – expire in 2025. At a minimum, those tax reforms must be extended.
But I won’t stop there. We need a flatter, fairer tax system to foster growth in the economy and allow taxpayers the opportunity to save and invest for the future. I will reform the tax code like Ronald Reagan did.
Be assured that a lack of revenue for the federal government is not the problem; too much spending is. Tax revenue to the federal government is more than 18 percent of the GDP; the problem lies in the fact that federal spending is more than 24 percent of the GDP.
Budget Process Reform
The final pillar to balance the budget in 7 years is the badly needed reform of our federal budget law, the 1974 Congressional Budget and Impoundment Control Act. Budget process reform is not the most exciting issue – which is why you don’t hear other candidates talk much about it – especially those who have been in Washington for years and done nothing to fix this broken system.
There is nothing more fundamental under Congress’ Constitutional “power of the purse.”
The 1974 Act created the House and Senate Budget Committees, established a process, and set a timeline for Congress to consider and produce a budget resolution and annual appropriations. Congress has virtually abandoned the process; no wonder the federal budget has grown out of control. Congress’ discarding the budget process is like throwing away your road map before going on a trip.
Consider, Congress is supposed to complete a budget resolution laying out the fiscal guidelines and setting appropriations levels by April 15. The last budget resolution that Congress even bothered to pass, for fiscal year 2022, was in August – four months later.
The federal government doesn’t let tax payers miss their April 15 deadline. In fact, the Inflation Reduction Act added $80 billion to hire new IRS agents to make sure they can’t. That’s another place to cut spending. The House Republicans trimmed around the edges with the Limit, Save Grow Act – but didn’t cut nearly deep enough.
For Congress, missing budget deadlines, or worse, ignoring the responsibility to pass a budget at all is the norm.
- Since 1975 the Budget Act deadline has been met only 7 times.
- Since 2010, only four budget resolutions have been approved.
- For fiscal years 2019, 2020, and 2021 neither the House nor the Senate even considered a budget resolution.
As the Committee for a Responsible Budget notes, “Given our terrible fiscal situation, with near-record deficits and debt, this is a tremendous abdication of responsibility.” To that I say, amen.
But it gets worse, …
Congress is to complete 12 separate appropriations bills in June before the beginning of the next fiscal year on October 1. However, the last time Congress passed all its appropriations before the fiscal year actually began was in 1997, … 26 years ago. They will miss the deadline this year as well.
In fact, since 1974, Congress has only completed its appropriations process before the new fiscal year a total of four times: 1977, 1989, 1995, and 1997.
When Congress misses the deadlines of a new fiscal year, it passes a “continuing resolution” – which just keeps federal spending at its current level until the government finally gets around to making budget decisions it should have already. And then adds more spending.
Again, over the past 47 years Congress has passed continuing resolutions in all but 3 years. These continuing resolutions can last a day or an entire year. That’s why there have been 192 of them since 1974; there were 21 continuing resolutions in 2001 alone.
Imagine an American family telling their bank or their creditors they were just going extend their current spending and worry about adjusting their budget later.
In short, Congress won’t follow the law when it comes to budgeting. As President I will have a package of budget process reforms to bring accountability – and fiscal responsibility – back to the federal budget process.
On day one, I will issue an Executive Order directing the Office of Management and Budget to publicly call out every missed deadline on the part of Congress so American taxpayers know when Congress is not meeting its responsibilities. Sunshine is the best disinfectant for this unseemly business as usual.
My Administration will review every dollar of Congressional spending bills and will submit a list of unnecessary spending items for Congress to vote on again. This is known as “rescission authority” granted the President under the Budget Act.
Under the current process, however, Congress simply can ignore the President’s rescission requests for 45 days and then the money must be spent. My reform plan will require a Congressional vote on these rescission requests. Note the House of Representatives, under a Republican majority, passed a measure like this in 2012; it died in the Democrat controlled Senate.
I like to call this the Earmark Line Item Veto.
Congress has a practice of political log-rolling and vote trading by putting wasteful “ear marks” in spending bills that direct federal spending toward Members’ parochial pet projects and political cronies. Sunshine is the best disinfectant to clean up this unseemly business as usual.
Further, right now, the annual federal budget is considered a “concurrent” resolution – a Congressional document between the House and Senate. It never makes its way to the President’s desk. I’ll propose to change that to a “joint” resolution, which would make the budget an act of Congress that the President signs – or vetoes.
All too often in recent years, the budget situation has to come to a crisis point, such as a government shut down or threat of a debt limit default before Congress, who spends the money, and the Administration, who administers that spending, work together on a long term plan. By making the budget a joint resolution that the President signs, we don’t have to wait for a crisis.
Finally, I will pursue a Balanced Budget Amendment. Already, 46 states have some type of balanced budget requirement in place; 37 are in the State constitution. Even in the four states without formal balanced budget requirements have some sort of debt restriction and other provisions to effectively restrict their ability to run a deficit.
My package of budget process reforms will bring accountability – and fiscal responsibility – back to the federal budget process.
I believe that 50 years from now, if we don’t take action immediately, history will look back on this moment and consider us the generation that prospered most, and sacrificed the least, leaving the consequences to the future generations. That’s not how I want to be remembered. More importantly, however, it is our moral obligation to leave better future to the next generation, as previous generations left us.
Additional Facts & Figures
Federal Debt: Total Public Debt as Percent of Gross Domestic Product
U.S. Public Debt Levels and Annual Growth in Debt Burden
Federal Interest Rate Payments
Annual Change in Federal Interest Rate Payments
- FY 2022 deficit $1.375 trillion per Monthly Treasury Statement (MTS) | U.S. Treasury Fiscal Data and FY 2016 deficit of $620 billion per Historical Tables | OMB | The White House
- Federal Spending | U.S. Treasury Fiscal Data (accessed 24 July 2023)
- Federal Reserve Bank of St. Louis https://fred.stlouisfed.org/series/GFDEGDQ188S
- Budget and Economic Data | Congressional Budget Office (cbo.gov) May 2023 10-Year Budget Projections
- Consumer Price Index for All Urban Consumers: All Items in U.S. City Average | FRED | St. Louis Fed (stlouisfed.org)
- Microsoft Word – 2023 Illegal Alien Population Estimate for PDF.docx (fairus.org)
- Budget and Economic Data | Congressional Budget Office (cbo.gov) May 2023 10-Year Budget Projections
- CBO’s 2022 Long-Term Projections for Social Security | Congressional Budget Office
- Credits and Deductions Under the Inflation Reduction Act of 2022 | Internal Revenue Service (irs.gov)