Paul Pushes Six Penny Plan to Cut Debt

Sen. Rand Paul promoted a plan to cut six cents from every projected federal spending dollar as the national debt topped $40 trillion.

Updated on Nov. 7, 2026 in Taxes

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Should the federal government cut spending across the board to balance the budget?

Sen. Rand Paul posted on X that the national debt costs $362,000 per taxpayer and promoted his Six Penny Plan to balance the federal budget within five years. The plan would reduce spending to 94% of projected levels in the first year, with annual 6% cuts continuing until the budget is balanced.

Why it matters

Net interest spending reached $1.052 trillion in the fiscal year ended Sept. 30, exceeding national defense spending of $965 billion. Paul said the plan's higher spending requirements now demand deeper cuts than his 2017 freeze proposal.

Treasury data put the national debt above $40.55 trillion as of November, with net interest spending of $1.052 trillion for the fiscal year ended Sept. 30. Whether the Six Penny Plan's five-year balance projection holds has not been independently tested.

The players

Rand Paul

Rand Paul is a Republican U.S. senator from Kentucky and a longtime advocate for reducing federal spending and deficits.

Peter Schiff

Peter Schiff is an economist and financial commentator known for warnings about U.S. government debt and monetary policy.

The details

Paul posted on X on a Friday that the national debt costs $362,000 per taxpayer, and said the Six Penny Plan would cut six cents from every projected federal spending dollar. Maturing debt with coupon rates of 0.5% to 2.5% must now be refinanced at 4% to 5%, raising borrowing costs.

September: Paul promoted the Six Penny Plan as the national debt passed $40 trillion.
Sept. 30: The fiscal year ended with net interest spending of $1.052 trillion.
November: Treasury data showed the national debt exceeded $40.55 trillion.
2017: Paul introduced a similar penny plan earlier.

Market Dynamics

Paul's Six Penny Plan extends his 2017 penny plan, which proposed a spending freeze, into a deeper cut because higher interest costs now consume more of the budget. Maturing debt carrying 0.5% to 2.5% coupons is being refinanced at 4% to 5%, which increases annual federal interest expense.

Rising Treasury borrowing costs put pressure on federal budgets, which can affect yields on government bonds that many savers hold. Individuals with fixed-income holdings should review how higher refinancing rates may influence the bonds in their portfolios.

The takeaway

Federal interest costs now rival major spending categories, which makes the trajectory of debt service a concrete budget question. Readers following federal fiscal policy can track future Treasury reports to see whether the national debt and interest totals move in the directions these proposals predict.