Today, we face the most predictable - and preventable - crisis in American history. Consider the flashing warning signs: The U.S. has accumulated more than $5 trillion in new debt in less than four years; total debt recently surpassed our country's gross domestic product (more than $15 trillion), and the Congressional Budget Office forecasts that 2012 will be the fourth consecutive year of more than $1 trillion federal budget deficits.

There is no end in sight - unless we change direction.

After a tumultuous 2011, Congress and the White House still face the same challenge - to find a responsible, bipartisan way to reduce deficits by cutting spending. The 1 Percent Spending Reduction Act, or "Penny Plan," was introduced in the House by Rep. Connie Mack (R-FL) and by Sen. Mike Enzi (R-WY) in the Senate. I co-sponsored this bill because it illustrates how a modest, common-sense approach could be used to put our financial house in order.
The Penny Plan would reduce total federal spending 1 percent per year for six years. In the seventh year and thereafter, overall spending would be capped at 18 percent of the GDP.

Of course, not every program would be cut. But Congress would need to set budget priorities and cap annual spending by 1 percent overall.

Why stabilize spending at 18 percent of GDP? First, this is the average percentage of tax revenue as a portion of GDP since World War II. In contrast, federal spending has skyrocketed in recent years to a stratospheric 24 percent of GDP. Second, tax revenues are also expected to return to about 18 percent of GDP as our economy regains strength in coming years, according to the Congressional Budget Office. If spending is capped permanently at 18 percent of GDP, balanced budgets would follow.

Under the Penny Plan, if Congress and the White House fail to agree on the required 1 percent annual reduction in total spending, automatic, across-the-board spending cuts would be triggered. This can put constructive pressure on the president and members of Congress to do the jobs they were elected to do - and put our nation's financial house back in order.

The Penny Plan is not based on any political ideology but, rather, on the everyday common sense in every American home. When a family budget must be tightened, the adults figure out how to reduce spending by 1 percent per year. A little of that kind of reasonableness and discipline is what is needed to restore financial responsibility in Washington.

Continuing on our current path of record deficits is reckless and unacceptable. It assures that our weak economy will remain weak and that unemployment will stay at historically high levels. The fiscal status quo also keeps Social Security and Medicare on course for bankruptcy in the years ahead, threatening the financial security and health care of tens of millions of current and future retirees.

The Penny Plan - reasonable, nonideological and fair - is a way for Congress and President Barack Obama to come together to ensure that the federal government stops spending money it doesn't have - the most critical investment we can make in our future.

Combine that practical approach to financial responsibility with pro-growth tax reforms and sensible regulatory restraint, and we'll get our economy moving. Millions of unemployed Americans will again be able to find work to support their families and communities. And America can get back on the right track.

Click here to read Sen. Hutchison's op-ed in Politico