Sen. Rand Paul (R-Ky.) is making a big ask as the U.S. national debt blows past $40 trillion: cut six cents out of every dollar the government spends. It's a simple idea, but the math behind it is anything but.
Rand Paul's 'Six Penny Plan': A Modest Proposal for a $40 Trillion Problem
MarketDash
As the national debt tops $40 trillion, Senator Rand Paul is pushing a plan to cut federal spending by 6% annually, aiming to balance the budget in five years.
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Paul's Six Penny Plan Targets Federal Spending
On Saturday, Paul took to X to promote his "Six Penny Plan," arguing that "the only way to address our $40 trillion national debt is by reining in spending across the board."
"My Six Penny Plan does just that," he said, outlining a proposal to "Cut 6 cents out of every $1 the federal government spends" and "Pay down the national debt and balance the budget in 5 years."
Here's how it would work: In the first year, spending would be reduced to 94% of projected levels. Then, each year, spending would be cut by another 6% until the budget is balanced in year five. It's a gradual, but relentless, squeeze.
Paul noted that when he introduced a similar "penny plan" back in 2017, a simple spending freeze would have done the trick. But times have changed. Years of higher spending and rising interest costs mean deeper cuts are now necessary.
Sen. Mike Lee (R-Utah) is on board, saying Paul's plan would work, while taking a swipe at the "Uniparty" for opposing it.
US Debt Surpasses $40 Trillion
The urgency of Paul's proposal is underscored by the sheer scale of the debt. On Tuesday, economist Michael A. Peterson called the $40 trillion U.S. debt an "urgent problem," warning that excessive government spending and rising interest costs are shifting the burden to younger generations.
Last month, market strategist Ryan Detrick put the debt's enormity into perspective: $40 trillion in $1,000 bills would form a stack 72 times higher than Mount Everest. Treasury data shows the debt exceeded $40.09 trillion as of Aug. 25, 2026.
Economist Peter Schiff has also weighed in, warning that the growing debt could fuel higher inflation. His reasoning: increased Federal Reserve purchases of Treasuries and money creation could push consumer prices higher.
Debt Hits 100% of GDP
In July, publicly held U.S. debt surpassed 100% of GDP for the first time since 1946. That means the federal government's debt is now bigger than the entire American economy. Analyst Steve Rattner highlighted the historic milestone, while Maya MacGuineas attributed the borrowing surge to decades of bipartisan inaction on spending and tax policy.
Rising debt-servicing costs are also putting increasing pressure on the federal budget, fueling concerns over Washington's fiscal management. As the debt grows, so does the interest bill, creating a vicious cycle that makes balancing the budget even harder.
Paul's Six Penny Plan is a bold proposal, but whether it can gain traction in a divided Congress remains to be seen. For now, it's a reminder that the national debt is a problem that isn't going away, and the longer we wait, the harder it will be to fix.
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