An Unconventional Plan for Fixing the Federal Budget

I spoke to Marc Rowan, the C.E.O.of Apollo Global Management, about a provocative plan he believes could fundamentally reshape our economy and finally fix the federal budget.

Whether it has a chance of being implemented is an open question, but Rowan’s ties to President Trump and the chatter the plan is generating means it could factor into budget talks later this year.Several weeks after President Trump won the election, he invited Marc Rowan, the co-founder and chief executive of Apollo Group, the giant private equity and credit firm, to Mar-a-Lago for a job interview to become the Treasury Secretary.

Rowan, who was in Asia for meeting with investors at the time, canceled all his plans and flew across the globe to meet with Trump.Rowan, who is arguably one of the most powerful financiers in the world, spoke with Trump but ultimately did not get the job.

(Scott Bessent did.)But since then he has become an increasingly influential voice on economic policy in President Trump’s orbit and even among some Democrats — and he has been pitching a very specific plan.Rowan, the C.E.O.of Apollo, is a champion of a budget model for the federal government that he helped fund at the University of Pennsylvania’s Wharton School, where he is chair of the school’s board of advisers.

Called the “Penn Wharton Budget Model,” it involves cutting taxes, but also cutting almost every tax exemption; increasing the capital gains tax rate; creating a carbon tax and rewriting the rules of immigration and health care.Its suggestions — which according to the model could by 2054 create a 38 percent reduction in federal debt, a 21 percent increase in G.D.P., and a 7 percent increase in wages — are likely to draw both boos and applause from Republicans and Democrats alike.You’ll probably hear a lot more about the idea as crucial budget talks approach this summer.

With the federal debt ballooning to a record level that worries Republican and progressive economists alike,...