Skip to main content

roserepublicans.com

ROSE REPUBLICANS THE VOICE OF GEN Z IN THE GOP
Issue 04 · Fiscal Responsibility

Balance the Budget.

This year, interest on the national debt will cost about $1.04 trillion. That is more than we spend on our entire military, and it is on track to double within a decade. We can't continue like this. Here is our eight-year plan to cut it down, phased in so it doesn't shock the economy.

  • Cut Military Spending 20%
  • Tax Foreign Inflows & Outflows
  • Uncap the Social Security Tax
  • Restore a 28% Corporate Rate
  • Top Earners Pay Their Share
  • Close Loopholes for the Wealthy
  • Reform Social Security Benefits
  • Hand Medicaid to the States
Where Your Money Goes · Fiscal Year 2026

Interest now costs more than our military.

Projected federal spending by category, in billions of dollars.

Out of every $100 Washington spends

  • Social Security $22
  • Medicare $14
  • Interest $14
  • Military $12
  • Medicaid $10
  • Everything else $28

Source: Congressional Budget Office, The Budget and Economic Outlook: 2026 to 2036 (February 2026). Total outlays $7,449B; revenues $5,596B; deficit $1,853B. Medicaid estimated from CBO's 2025 actual ($668B) plus its projected 2026 increase.

Why It Matters

We can't continue like this.

In 2026, Washington will spend $7.45 trillion and collect $5.60 trillion. The $1.85 trillion gap goes on the national credit card, and the interest bill alone is now over $1 trillion a year.

Left alone, it gets worse. The CBO projects another $24.4 trillion in deficits over the next ten years, with interest doubling to $2.1 trillion a year by Year 10. Interest builds no roads, trains no soldiers, and treats no patients.

Our generation is inheriting the bill, and it grows every year we wait. A party that claims to stand for fiscal responsibility has to put real numbers on the table.

Why We're Doing This

We don't want to raise taxes or cut what Americans rely on.

No one runs for office hoping to raise taxes or trim programs that families depend on. We don't either. Every change in this plan is a hard choice, and we treat it that way.

But a country that spends over a trillion dollars a year on interest, and is on track to double it, is borrowing against its own children. Young Americans deserve something to build on: a home they can afford, a career with a future, a country that keeps its promises. That takes hope, and a bankrupt future offers none.

A bankrupt future gives no one hope. A balanced budget gives everyone a future.
The Answer

Eight moves, phased in over eight years.

Savings shown once each reform is fully phased in, in projected dollars for that year.

01

Cut Military Spending 20%

We cut the defense budget by 20%, phased in at 5% a year from Year 1 to Year 4. We get there by going after the defense contractors who have been gouging American taxpayers, and by bringing our bases in Europe and the Middle East home.

≈ $193Bin Year 4
They can play ball, or they will have no ball.
How we'd do it
  • Aggressively renegotiate every major defense contract
  • Move U.S. bases out of Europe and the Middle East, and stop paying to defend wealthy allies who can defend themselves
  • Investigate every contract on the books, line by line
  • Make contractors justify every penny, or lose the money
  • Phase in: 5% in Year 1, 10% in Year 2, 15% in Year 3, 20% in Year 4
02

Tax Foreign Inflows & Outflows

Foreign investors poured nearly $3 trillion into American stocks, bonds, and businesses in 2025. They profit from the strongest economy in the world. A modest tax on that money coming in, and on money sent out, should help pay down the debt of the country that made it possible.

≈ $55Bin Year 4
How we'd do it
  • Inflows: a 2% tax on foreign investment flowing into the U.S. Foreign stock, bond, and direct investment came to about $2.07 trillion in 2025
  • Collect it at the point of purchase, when a foreign buyer acquires an American stock, bond, or business
  • Keep the rate modest so America stays the best place in the world to invest
  • Outflows: a 5% tax on remittances sent abroad, with an exemption for American citizens using verified channels
  • Phase in: 1% on inflows in Year 1, 2% from Year 2
03

Uncap the Social Security Tax

Today the 12.4% Social Security payroll tax stops at $184,500 of income. A nurse pays it on every dollar she earns, while a CEO stops paying in by early spring. Apply it to high earners and help save the program.

≈ $152Bin Year 4
How we'd do it
  • Apply the payroll tax to earnings over $250,000 (the CBO scores this at $130 to $190 billion a year over the decade)
  • Phase out the cap completely over time, which Social Security's actuaries say closes 58% of the program's long-term shortfall
  • Phase in: half-year in Year 1, fully in place in Year 2
04

Restore a 28% Corporate Tax Rate

In 2017, Washington cut the corporate tax rate from 35% to 21%, and the deficit kept growing. We would bring it back to 28%: halfway back, and still well below the rate corporations paid for decades.

≈ $101Bin Year 4
How we'd do it
  • Raise the corporate income tax rate from 21% to 28%
  • Keep it below the old 35% rate so American companies stay competitive
  • Phase in: 24% in Year 1, 26% in Year 2, 28% in Year 3
05

Top Earners Pay Their Share

The 2017 tax law cut the top income tax rate from 39.6% to 37%, and the highest earners still write off far more through deductions than working families can. We would restore the old top rate, add a small surtax on high incomes, and cap what deductions are worth.

≈ $265Bin Year 4
How we'd do it
  • Top rate: return the top income tax bracket to its pre-2017 rate of 39.6%
  • Surtax: a 2% surtax on income above $200,000 for married couples ($100,000 for singles)
  • Deductions: limit the tax benefit of itemized deductions to 15 cents on the dollar, the same for everyone, so a deduction is not worth more to a millionaire than to a teacher
  • No change for working and middle-class families who take the standard deduction
  • Phase in: top rate in Year 2, deduction cap half in Year 2 and fully in Year 3, surtax 1% in Year 3 and 2% in Year 4
06

Close Loopholes for the Wealthy and Wall Street

Inherited fortunes that are never taxed. Hedge fund managers paying a lower rate than their secretaries. Corporations parking profits overseas. We close the loopholes that let the wealthiest skip out on what everyone else pays.

≈ $136Bin Year 4
How we'd do it
  • Tax capital gains on large inherited fortunes instead of wiping them out at death (about $20 billion a year)
  • Apply the 3.8% investment income tax to the owners of partnerships and S corporations who work in the business, the same as everyone else (about $42 billion)
  • Tax U.S. corporations' foreign profits at the full corporate rate (about $34 billion)
  • A small tax on stock and bond trades (about $30 billion)
  • A fee on the largest banks (about $9 billion), and tax carried interest as ordinary income
  • Phase in: half in Year 3, fully in place in Year 4
07

Reform Social Security Benefits

Social Security's trust fund runs short in the 2030s. Uncapping the payroll tax brings in new money; these changes slow the growth of benefits for those who need them least, without touching anyone already retired.

≈ $111Bin Year 8
How we'd do it
  • Current retirees keep their benefits. Future cost-of-living raises use chained CPI, a more accurate inflation measure
  • Trim the benefit formula for the top half of new retirees by lifetime earnings, phased in over five years
  • Raise the full retirement age by two months a year, reaching 70 for workers born in 1982 or later
  • Savings grow each year as new retirees enter under the new rules
08

Fund Medicaid, Then Hand It to the States

A planned handoff, not a cliff. Washington keeps Medicaid fully funded for 24 months while each state stands up its own program, then steps down to a permanent federal block grant so no state is left on its own.

≈ $674Bin Year 4
  1. Years 1–2Fully funded transition
  2. Year 3Federal share halved
  3. Year 4+State-run, with a federal block grant
How we'd do it
  • Keep Medicaid fully funded through a two-year transition period
  • Transfer the program to state-run systems built for their own populations
  • Step federal funding down by half in Year 3, then to a permanent block grant from Year 4: about one-sixth of today's federal funding, roughly $140 billion a year
  • Tie block grants to results, with clear accountability for waste and fraud
Our Pledge

We will investigate every contract, and they will justify every penny, until the budget is balanced.

The Eight-Year Plan

Steady steps, not a shock.

Projected federal deficit each year, without the plan and with it, in billions of dollars.

$11.7Tless borrowing over eight years
82%smaller deficit by Year 8
89%debt-to-GDP in Year 8, instead of 116%
$373Ba year saved on interest by Year 8
YearWhat phases inSavingsWithout planWith plan
Year 1Military cut begins (5%) · payroll cap lifted · 1% inflow tax · corporate rate to 24% · Medicaid transition begins, fully funded · Social Security reforms start for new retirees$180B$1,887B$1,707B5.1% of GDP
Year 2Military 10% · payroll cap fully in place · inflow tax to 2% · corporate 26% · 39.6% top rate restored · deduction cap begins · Medicaid transition year two$458B$2,080B$1,622B4.7% of GDP
Year 3Military 15% · corporate rate reaches 28% · deduction cap fully in place · 1% high-income surtax · loophole closures begin · federal Medicaid funding halved$1,135B$2,020B$885B2.5% of GDP
Year 4Military cut reaches 20% · surtax reaches 2% · loophole closures fully in place · Medicaid becomes state-run with a permanent federal block grant$1,671B$2,201B$530B1.4% of GDP
Year 5Every reform fully in place · interest savings start compounding$1,807B$2,286B$479B1.2% of GDP
Year 6Social Security reforms keep growing as new retirees enter$1,963B$2,439B$476B1.2% of GDP
Year 7Interest savings pass $280 billion a year$2,129B$2,781B$652B1.6% of GDP
Year 8Deficit cut by 82% compared with doing nothing$2,311B$2,819B$508B1.2% of GDP
Where the Year 8 savings come fromYear 8
Medicaid handoff, net of block grant$774B
Lower interest from less borrowing$373B
Top earners: 39.6% rate, surtax, deduction cap$317B
Cut military spending 20%$211B
Uncap the Social Security tax$192B
Close loopholes for the wealthy and Wall Street$159B
Social Security benefit reforms$111B
Restore a 28% corporate rate$110B
Tax foreign inflows & outflows$64B
Total savings in Year 8$2,311B
Remaining deficit in Year 8$508B
New revenue43% · $841B
Spending cuts57% · $1,096B

Baseline: Congressional Budget Office, The Budget and Economic Outlook: 2026 to 2036 (Feb. 2026). Reform estimates: CBO Budget Options (Dec. 2024) for the payroll tax cap, corporate rate (scaled from CBO's 1-point option), high-income surtax, loophole closures, and Social Security benefit changes; top-rate estimate scaled from CBO's top-bracket option; deduction cap set at half of CBO's estimate to reflect current law; foreign tax bases from BEA U.S. International Transactions, 2025; Medicaid grown from CBO's 2025 actual at 3.5% a year. Interest savings apply CBO's average interest rate to the reduction in debt. Revenue and cut totals exclude interest savings. Estimates do not include economic feedback effects. Year 1 is fiscal year 2027.

After the Eight Years

On track, then balanced.

The eight-year plan gets the deficit down to about 1.2% of GDP and turns the rest of the budget into a surplus before interest. From there, a growing economy and a shrinking interest bill do the rest.

Year 13Balanced budget with 2.6% growth a year
Year 21Balanced even at the CBO's 1.8% forecast
73%Debt-to-GDP by Year 13, down from 116% on today's path
2.4%Of GDP: the surplus before interest the plan locks in
Growth at 2.6% a yearCBO forecast, 1.8% a year
1.2%0.9%0.6%0.3% BALANCED BUDGET Year 8: 1.2% of GDP Year 13 Year 21 Year 8Year 10Year 12Year 13Year 14Year 16Year 18Year 20Year 21

Deficit as a share of the economy, Year 8 to Year 21

YearDeficit at 2.6% growthDeficit at 1.8% growth
Year 90.9%1.1%
Year 100.7%1.0%
Year 110.5%0.9%
Year 120.2%0.8%
Year 13Balanced0.7%
Year 16Surplus0.4%
Year 21SurplusBalanced

Why it keeps shrinking

Once the plan is in place, the government takes in more than it spends on everything except interest. Every year the economy grows, the debt shrinks as a share of it, and so does the interest bill.

Why growth speeds it up

A bigger economy means more revenue without raising a single rate. The CBO's own numbers show growth of 2.6% a year would cut deficits by about 1.2% of GDP over a decade.

What we have to protect

Balance depends on holding the line: keeping the plan's savings growing with the economy and not letting new spending creep back in.

Projection by Rose Republicans. Starting point: the plan's Year 8 debt ($38.7 trillion, 89% of GDP) and deficit ($508 billion). Assumes the plan holds its 2.4%-of-GDP surplus before interest, an average interest rate of 4.0%, and inflation of about 2.2%. Growth case adds CBO's estimated revenue gain from faster growth, phased in at about 0.12% of GDP a year. Source for growth scenario: Congressional Budget Office, How Budgetary and Economic Outcomes Might Differ From CBO's February 2026 Projections (Feb. 2026). Long-run projections are uncertain and do not model rising costs from an aging population.

What It Means for You

Results you can feel.

1

Less debt and less interest passed on to your generation

2

Every defense dollar audited and accounted for

3

Medicaid run closer to home, with a funded transition

← PreviousAffordabilityAll Issues

Light the fire with us.

Help the Rose Republicans build a coalition that delivers results for every American.

Join the Movement →Read Our Mission