Representative Ron Paul, the libertarian seeking the Republican nomination for president, just unleashed his plan to cut $1 trillion from the federal budget in the first year of his administration. He claims he could balance the budget in just three years. It's a radical blueprint, and the scary part is that Paul believes it can be done -- without destroying the U.S. economy and its relationships with the rest of the world.
He would eliminate five Cabinet-level agencies: Commerce, Education, Energy, Housing & Urban Development and Interior. He would also end the Transportation Security Administration and zero-out all foreign aid. He would pare back most other programs to 2006 spending levels (pre-financial crisis).
The congressman wouldn't stop there. Medicaid would become a block grant to the states, as would food stamps, child nutrition and other income support programs. In fact, no one escapes his budget ax: On the chopping block would be all corporate subsidies and all spending for the Iraq and Afghanistan wars. The Defense Department budget would shrink by more than $800 billion from 2013 to 2016.
If elected, Paul pledges to pay himself the same salary as the median personal income of American workers -- $39, 336. The federal workforce would be cut by 10 percent, and federal pay (including for lawmakers) would be trimmed.
Corporations would see tax rates drop to 15 percent from 35 percent. The Bush-era tax cuts would all be extended. Estate taxes would be abolished, as would taxes on personal savings. He wouldn't end Social Security, but he would let young people opt out of the retirement program. As for that $1 trillion sitting in corporate bank accounts overseas, Paul would allow those funds to be repatriated tax-free.
True to his libertarian principles, Paul would end the Dodd-Frank financial reform law and the Affordable Care Act (aka Obamacare), along with many federal regulations.
And, you guessed it, President Ron Paul would conduct a full audit of the Federal Reserve, and offer legislation to "strengthen the dollar and stabilize inflation." I wonder if he'd let the Fed keep the $80 billion in profit it annually hands over to the U.S. Treasury?