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Ron Paul’s Economic Plan: Slash $1 Trillion from Budget; Eliminate Department of Education and 5 Others

Jason Merritt/Getty Images(LAS VEGAS) -- A second presidential candidate has unveiled his economic plan in Nevada.

One month after Mitt Romney laid out his 59-point plan to create 11.5 million jobs, his fellow GOP presidential candidate Ron Paul put forth a plan that would slash $1 trillion from the federal budget in the first term of a Paul presidency.

But where Romney’s plan focused on job creation, Paul’s No. 1 goal is reducing the size of the federal government and balancing the budget, which his plan achieves by wiping out five cabinet departments and gutting funding to many others.

Paul claims his plan would produce a budget surplus by 2015.
Under a Paul presidency the departments of Energy, Education, Housing and Urban Development, Commerce and Interior would cease to exist. Their elimination would slice about $179 billion from the federal budget and cut about 134,000 federal jobs.

Paul said his plan would not lay people off, but would transfer them to other departments until they retire.

Paul would slash funding for the remaining departments, including a 40 percent cut for the Food and Drug Administration and a 30 percent budget reduction for the EPA. The Department of Defense would see $832 billion disappear from its budget during Paul’s first term in office, most of which would stem from Paul’s plan to end all foreign wars and foreign aid.

“The ideas that Congressman Paul espouses are not unique to him,” said Richard Parker, a lecturer in public policy at Harvard University’s Kennedy School of Government. “They are kind of standard fare for libertarians.”

Parker said Paul’s plans are aimed more at educating the public about Libertarian policies than laying out a solution that could feasibly get him elected. While Paul is running as a Republican this presidential campaign cycle, as he did in 2008, the Texas congressman campaigned as the Libertarian Party nominee during his 1988 bid for the White House.

Paul is the only candidate to call for such massive and immediate spending cuts, but on the revenue side of things his plan is quite similar to his GOP rivals. Just as Herman Cain, Michele Bachmann, Newt Gingrich and Jon Huntsman have proposed, Paul calls for eliminating taxes on capital gains and dividends as well as getting rid of the estate tax.

Paul’s plan cuts the corporate tax rate from 35 percent down to 15 percent. Romney wants to drop the rate to 25 percent, Gingrich said it should be 12.5 percent and Cain would put it at nine percent.

Paul also eliminates taxes on profits earned overseas and brought back into the country, as would Cain and Romney.

The Joint Committee on Taxation estimates this tax holiday on repatriated profits would give an initial boost to the economy but would cost the federal government $79 billion over the next decade in lost revenue.

Copyright 2011 ABC News Radio

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