Paul's 5-year plan calls for deeper cuts, military reductions and Medicaid block grants

03/17/2011 05:57 PM

Freshman U.S. Sen. Rand Paul has proposed reworking the Medicaid health care program into block grants for states and calls for slashing spending to most agencies, including the Department of Defense, over the next five years.

Paul has repeatedly called for balancing the federal budget as soon as possible and released his five-year plan at a press conference in Washington on Thursday.

Overall, the 5-year plan incorporates many of the same type of cuts to agencies that Paul included in a one-year budget plan, which can be seen here.

In that one-year budget, Paul eliminated the U.S. departments of education and energy, reduced the budgets of most other agencies to fiscal year 2008 levels and eliminated many programs. That budget hasn’t received a hearing in the Senate.

But Paul does include some differences in the five-year plan. Here’s a breakdown of the differences:

Department of Agriculture:

  • The Food Stamps and Child Nutrition programs would be turned into block grants that would be at 2008 spending levels and would grow with the Consumer Price Index.

Defense:
*Would reduce military personnel, procurement, operations and maintenance and research and development funding to 10 percent less than 2008 levels. War funding would be available only at the request of the president.
*The Coast Guard and Strategic Petroleum Reserves are preserved.

Education:
*Pell grants are preserved at ’08 levels and grow with the CPI and population.

Commerce
*Department is eliminated in the five-year plan.
*National Oceanic and Atmospheric Association is moved to National Science Foundation. Patent and Trademark Office to Department of Justice. International Trade Association to U.S. Trade Representative.

Health and Human Services
*The following departments are reduced an extra 20% from ’08 level funding: Food and Drug Administration, Health Resources and Services, Indian Health Service, Centers for Disease Control and Prevention, National Institute of Health, Substance Abuse and Mental Health.
*Low Income Home Energy Assistance Program is eliminated
*Medicaid is turned into a block grant program and funded at ’08 levels. The State Children’s Health Insurance Program also follows that formula. Both would grow at CPI and population.

Homeland Security
*Transportation Security Administration is reduced 20% from ’08 levels. Homeland Security Grants are eliminated.

Paul’s plan would also greatly reduce programs in the State Department and Department of the Interior. It reduces NASA’s funding an extra 25% from ’08 levels. It requires all unspent funds to be pulled back after three years.

The plan also requires the federal government to sell its equity stakes in three companies it took over amid the recession: General Motors, Chrysler and AIG.

And it allows for the inclusion of royalties the federal government would received by opening up the Alaskan National Wildlife Refuge for oil drilling.

Overall, Paul says his five-year plan would reduce currently projected deficits by $2.6 trillion.

-Reporting by Kenny Colston

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