Donald Trump Endorses a Modified Penny Plan

September 16, 2016
Demian Brady
Donald Trump

NTUF has long encouraged politicians and candidates to consider budget reforms to address Washington’s chronic over-spending and exploding debt levels. During this campaign season, we challenged Donald Trump and Hillary Clinton to support the Penny Plan – a proposal to cut one cent out of each dollar spent. This week, Trump officially endorsed this simple budget savings mechanism.

Trump’s modifications to the Plan include protecting the defense budget (elsewhere he has called for increasing military spending by at least $16 billion per year) and “safety net” entitlement spending.

Total outlays in FY 2016 will total $1.068 trillion excluding net interest payments on the debt, defense, Social Security, Medicare, and Medicaid. Cutting this spending by 1 percent annually would reduce outlays relative to FY 2016 levels by $11 billion in the first year and $21 billion in the second year.

Additional savings could be achieved in subsequent years, but given how Congress and the President frequently override budget controls; NTUF is skeptical that restraints would be adhered to over the long-term.

The possible savings could be lower. This estimate assumes that Trump would only preserve Social Security, Medicare, and Medicaid from one percent reductions. It is unclear if he would also set aside additional programs like the Children’s Health Insurance Program ($14 billion in FY 2016), agriculture safety nets ($14 billion in FY 2016), or veterans’ income security benefits ($89 billion in FY 2016).

While $16 billion in annual savings is a significant amount, it falls short of offsetting the overall spending Trump has proposed on the campaign trail. This savings brings the annual price tag of his spending agenda down to $18 billion.

There are still several items on his agenda whose cost could be significant but cannot yet be determined due to lack of information. For example his recent child care plan would increase spending through “refundable” credits, and he has vowed to replace the so-called Affordable Care Act but has not yet presented enough details to calculate even a rough cost estimate.

NTUF updates its running tally of each candidate’s spending agenda

Demian Brady

Director of Research

Demian Brady is the Director of Research for the National Taxpayers Union Foundation. His responsibilities include producing commentaries and studies on fiscal issues, as well as managing NTUF's BillTally program (which tracks the impact of legislation on the size of the federal budget), State of the Union analysis, and more. Demian's research has been cited in the New York Times, the Wall Street Journal, and the Washington Times. In addition, he has written on a number of budget-related issues for both NTU and NTUF. Mr. Brady resided and worked in Columbus, Ohio before moving to Washington, DC in 1998. He earned an M.A. in Political Science from American University. He received a B.A. in Russian Area Studies from Bowling Green State University, Bowling Green, Ohio, where he graduated Magna Cum Laude and was inducted into Phi Beta Kappa. 

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