Mack's 'Penny Plan' to Balance the Budget

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This is a rush transcript from "Hannity," July 29, 2011. This copy may not be in its final form and may be updated.

SEAN HANNITY, HOST: Now, that the Senate has tabled Speaker Boehner's debt bill attention is now turning to other possible legislation. Now one of the alternative proposals that is gaining momentum is called the One Percent Spending Reduction Act.

Now it's also known as the Mack-Penny plan. Now the plan aims to balance the federal budget within eight years through three simple steps, cutting spending by 1 percent every year for the next six years, capping spending at 18 percent of GDP in 2018 and reducing overall spending by $7.5 trillion over 10 years.

Now it's authored by Florida Congressman Connie Mack. Last spring, it was introduced by Wyoming Senator Mike Enzi just a few weeks ago. Now the bill is already enjoying the support of at least 43 co-sponsors in the House, a handful of senators including Tea Party caucus member, Kentucky Senator Rand Paul who insists this is the only plan currently on the table proposing real cuts.

So is the Mack one cent solution the one that could finally save us all? Joining me, the man behind the plan, Florida Congressman Connie Mack who decided that he would support -- you did or did not support Speaker Boehner's bill?

REP. CONNIE MACK, R - FL.: I voted no, Sean.

HANNITY: OK, that's what I thought. Now let me just explain to people. Cause this is what -- all the plans that we are talking about here, there is not one of them that solves or attacks the real problem because next year spending goes up 7.5 percent, the year after we spend 7.5 percent more. The year after we spend 7.5 percent more so am I correct in explaining this meaning the baseline?

MACK: That's correct. The baseline continues to go up at about 7 percent.

HANNITY: All right, and you were suggesting and I have been pushing this plan as you know all week because I think we have got to deal with reality here. They are spending too much money.

The country is going bankrupt. We're gonna have $25 trillion in debt. I like cut, cap and balance and I like your bill. So you are saying if we freeze spending at 2011 levels for six years and then cut 1 percent a year. I want you to say it in your own words?

MACK: Alright, well thank you very much, Sean. And also, I'd like to say that Senator Marco Rubio has also just signed on to the bill, so we're getting -- picking up some momentum and more members of the House.

But what the bill does is this. So we take one penny out of every federal dollar for a year for six years, 1 percent a year for six years. In the 7th year, we cap spending at 18 percent of GDP --

HANNITY: Which is historically what we spend?

MACK: That's right and then so we balance the budget in the 8th year and we cut $7.5 trillion. And this is what is so beautiful about this plan. We are taking one penny out of every federal dollar.

Everybody watching the show tonight has had to take more than one penny out of their home budget or out of their business' budget and the federal government should be able to do the same. It is common sense, whether you are Republican, Democrat, liberal, conservative, independent, it makes sense.

It's something you can agree with and understand that the way to get our fiscal house in order is to balance our budget and people are looking for real solutions.

HANNITY: You know, this is cut, cap and balance was great, too. I know you supported it. You voted for it when it came up, correct?

MACK: I voted no.

HANNITY: You voted no on that?

MACK: Yeah, I did, Sean.

HANNITY: Alright, I'm sorry. Well, I thought you did. But I like cut, cap and balance because you're dealing -- at least dealing structurally with this. But again, and I like the balanced budget amendment. I think it is important we have it.

MACK: I do, too.

HANNITY: What I like about your plan, is it's simple. This is it. Well everybody in America we are not going to cut the federal spending except 1 percent a year from this year's budget, which is, what $3.69 trillion?

MACK: That's right.

HANNITY: So we're going to only cut 1 percent next year. We won't increase at the projected 8 percent. We're going to cut 1 percent this year, 1 percent next year, every year 1 percent and then we can get to a balanced budget in eight years.

MACK: That's right. It is --

HANNITY: Then why are we voting on this? Why do we -- is every plan contingent on these projected increases?

MACK: Well, that is what I think people are so furious with. In Washington they hear about all these gimmicks and these numbers and these schemes, right?

So what is a baseline? Well, everybody thinks a baseline would be flat, but in Washington a baseline is an increase. And what I'm saying is enough is enough.

We have to stop and this is a real solution to balance our budget and we are only taking one penny out of every federal dollar.

HANNITY: What is the criticism because I've watched this week? I have come under fire, other conservatives. Tea Party members are called hobbits. The Weekly Standard suggests that in fact that this is helping Obama.

And meanwhile, all these plans are based on increasing spending 8 percent a year. This is like drunken sailors on anabolic steroids and nobody is talk about slowing or stopping all growth of this monster that has gotten out of control.

MACK: That is exactly the point, Sean and I'm glad that you couched it that way. So everything that we are talking about up to now is a decrease in the rate of growth. It is not -- we are not cutting spending.

HANNITY: Except 1 percent.

MACK: My bill would cut 1 percent, but every other plan that has been out there is still growing the size of government. It is spending more money than we have.

HANNITY: Like for example --

MACK: We have to get our fiscal house in order.

HANNITY: We're going to spend another $9 trillion in the period over this 10-year period. We're going to accumulate $9 trillion in new debt and over the 10-year period of time, we're going to have $1 trillion in savings based on the Boehner plan passed today, right?

MACK: That's right and Sean, we can't afford it and everybody back home knows we can't afford it. And what they are saying is, it is time for Washington to get its act in gear, to shoot straight with the American people, be honest, look them in the eyes, tell them we understand the problem and we can fix it. And one way to fix it is with the penny plan by taking one penny out of every federal dollar.

HANNITY: Well, tell Marco Rubio that I signed up before he did.

MACK: I'll make sure to tell him.

HANNITY: Look, I got to tell you this is a great idea and I hope you can advance this. I hope maybe we can get a vote on it because I think it's gonna be good for the country.

And I think Americans can wrap their arms around it because they have had to cut more than a penny out of every dollar that they take in because of the bad economic situation that Congress has now put on them over the years. So --

MACK: You're absolutely right, Sean.

HANNITY: All right, Congressman, good to see you.

MACK: Thank you. Good to see you, too.

HANNITY: And we're going to prove that the country wants this to happen. When we come back, Frank Luntz with an amazing poll that shows what you, the American people, think about this contentious debt ceiling negotiation and our great -- hang on -- Great, Great, Great American Panel is next.

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