Selected Deficit Reduction Options That Appeared in Previous CBO Reports

Selected Deficit Reduction Options That Appeared in Previous CBO Reports
  Savings, 2015-2023b
    Original Publicationa
(Option number)
Less Than
$10 Billion
$10 Billion
$50 Billion
$50 Billion
Mandatory Spending Options
Budget Function 270: Energy        
  Transfer the Tennessee Valley Authority's electric utility functions and associated assets and liabilities K (2) x    
  Reduce the size of the Strategic Petroleum Reserve K (3) x    
  Eliminate funding for the Ultra-Deepwater and Unconventional Natural Gas and Other Petroleum Research Program M (270-2) x    
Budget Function 300: Natural Resources and Environment        
  Revise and reauthorize the Bureau of Land Management's land sales process M (300-3) x    
  Reassign reimbursable costs for the Pick-Sloan Missouri Basin Program to the beneficiaries it serves M (300-8) x    
Budget Function 350: Agriculture        
  Impose new limits on payments to producers of certain agricultural commodities M (350-1) x    
  Reduce payment acreage by 1 percentage point M (350-2) x    
  Eliminate the Foreign Market Development Program M (350-4) x    
  Reduce funding for the Market Access Program M (350-5) x    
  Limit the repayment period for export credit guarantees M (350-6) x    
Budget Function 370: Commerce and Housing Credit        
  GSEs choose between the standard HAMP and the HAMP Principal Reduction Alternative B (1) x    
  GSEs choose between the standard HAMP and principal forgiveness that would reduce the outstanding loan balance to 100 percent of a home's current assessed value B (2) x    
  GSEs choose between the standard HAMP and principal forgiveness that would reduce the outstanding loan balance to 90 percent of a home's current assessed value B (3) x    
  Permanently extend the Federal Communications Commission's authority to auction licenses for use of the radio spectrum M (370-3) x    
Budget Function 600: Income Security        
  Decrease the maximum benefit for the Supplemental Nutrition Assistance Program to 97 percent of the cost of the Thrifty Food Plan H   x  
  Eliminate the exclusion for unearned income under the Supplemental Security Income program M (600-7) x    
  Create a sliding scale for children's Supplemental Security Income benefits based on the number of recipients in a family M (600-8) x    
  Remove the ceiling on the collection of overpayments from the Supplemental Security Income program M (600-9) x    
Budget Function 650: Social Security        
  Reduce DI benefits for people age 53 and older G   x  
  Increase the age at which disability requirements become less restrictive G x    
  Raise the earliest eligibility age for Social Security K (29)     x
  Apply the Social Security benefit formula to individual years of earnings K (32)     x
  Extend the waiting period for DI benefits from 5 months to 12 months G     x
  Reduce the top two PIA factors by roughly one-third L (13)     x
  Reduce COLAs by 0.5 percentage points L (29)     x
  Reduce the spousal benefit in Social Security from 50 percent to 33 percent M (650-5)   x  
  Eliminate the Social Security lump-sum death benefit M (650-6) x    
  Require children under age 18 to attend school full time as a condition of eligibility for Social Security benefits M (650-7) x    
  Eliminate Social Security benefits for children of early retirees M (650-8) x    
  Require state and local pension plans to share data with the Social Security Administration M (650-9) x    
Budget Function 700: Veterans Benefits and Services        
  Reduce veterans' disability compensation to account for Social Security DI payments M (700-1)   x  
Budget Function 800: General Government        
  Require the IRS to deposit fees for its services in the Treasury as miscellaneous receipts M (800-2) x    
Discretionary Spending Optionsc
Budget Function 050: National Defense        
  Purchase the Israeli Namer armored personnel carrier C (1) x    
  Upgrade the Bradley Infantry Fighting Vehicle C (2) x    
  Purchase the German Puma Infantry Fighting Vehicle C (3)   x  
  Enhance GPS using the Iridium satellite system I (2) x    
  Consolidate the Department of Defense's retail activities and provide a grocery allowance to service members K (6) x    
  Consolidate and encourage efficiencies in military exchanges M (050-18) x    
  Substitute dependent education allowances for domestic on-base schools M (050-20) x    
  Ease restrictions on contracting for depot maintenance M (050-22) x    
Budget Function 150: International Affairs        
  Eliminate the Overseas Private Investment Corporation M (150-1) x    
Budget Function 250: General Science, Space, and Technology        
  Eliminate National Science Foundation spending on elementary and secondary education M (250-1) x    
  Reduce funding for research and development programs in the Science and Technology Directorate of the Department of Homeland Security M (250-3) x    
Budget Function 300: Natural Resources and Environment        
  Reduce funding for timber sales that lose money M (300-4) x    
  Eliminate the Energy Star program M (300-10) x    
  Eliminate the Environmental Protection Agency's Science to Achieve Results Grant program M (300-11) x    
  Eliminate the National Park Service's local funding for Heritage Area grants and statutory aid M (300-15) x    
Budget Function 370: Commerce and Housing Credit        
  Eliminate the Hollings Manufacturing Extension Partnership and the Baldrige National Quality Program M (370-2) x    
  Impose fees on the Small Business Administration's secondary market guarantees M (370-4) x    
Budget Function 400: Transportation        
  Eliminate the Essential Air Service program M (400-5) x    
Budget Function 450: Community and Regional Development        
  Eliminate NeighborWorks America M (450-2) x    
  Eliminate the Community Development Financial Institutions Fund M (450-3) x    
  Create state revolving funds to finance rural water and waste disposal M (450-4) x    
  Eliminate regional development agencies M (450-5) x    
  Restrict first-responder grants to high-risk communities M (450-6) x    
Budget Function 500: Education, Training, Employment, and Social Services        
  Restrict Pell grants to students who meet more stringent academic eligibility requirements A   x  
  Restrict Pell grants to students who meet academic progress requirements A   x  
  Eliminate the Even Start program and redirect some funds to other education programs M (500-5) x    
  Eliminate administrative fees paid to schools in the campus-based student aid and Pell grant programs M (500-8) x    
  Eliminate the Leveraging Educational Assistance Partnership program M (500-9) x    
Budget Function 600: Income Security        
  Reduce rent subsidies for certain one-person households M (600-5) x    
Budget Function 750: Administration of Justice        
  Eliminate the Legal Services Corporation M (750-2) x    
Budget Function 800: General Government        
  Eliminate general fiscal assistance to the District of Columbia M (800-1) x    
  Eliminate the Presidential Election Campaign Fund M (800-3) x    
  Eliminate the National Youth Anti-Drug Media Campaign M (800-4) x    
Health Options
Budget Function 550: Health        
  Adopt a voucher plan and slow the growth of federal contributions for the Federal Employees Health Benefits Program K (Mandatory-14)   x  
  Repeal the individual health insurance mandate K (Revenues-32)     x
  Repeal the expansion of health insurance coverage under the Affordable Care Act F     x
Budget Function 570: Medicare        
  Consolidate and reduce federal payments for graduate medical education costs at teaching hospitals K (Mandatory-17)     x
  Reduce Medicare's payment rates across the board in high-spending areas K (Mandatory-23)   x  
  Eliminate the critical access hospital, Medicare-dependent hospital, and sole community hospital programs in Medicare K (Mandatory-24)     x
Revenue Optionsd
Individual Income Tax Base        
  Convert the deduction for charitable giving to a nonrefundable 25 percent credit J (6–8)      
  Convert the deduction for charitable giving to a nonrefundable 15 percent credit J (9–11)      
  Gradually eliminate the mortgage interest deduction K (4)      
  Limit or eliminate the deduction for state and local taxes K (5)      
  Limit the tax benefit of itemized deductions to 15 percent K (7)      
  Replace the tax exclusion for interest income on state and local bonds with a direct subsidy for the issuer K (13)      
  Limit deductions for charitable gifts of appreciated assets to the gifts' tax basis M (11)      
  Eliminate tax subsidies for child and dependent care M (13)      
  Eliminate the additional standard deduction for elderly and blind taxpayers M (14)      
  Eliminate the tax exclusion for employment-based life insurance M (16)      
  End the preferential treatment of dividends paid on stock held in employee stock ownership plans M (22)      
Individual Income Tax Credits        
  Eliminate the refundable portion of the child tax credit K (14)      
  Eliminate the child tax credit K (14)      
  Eliminate the EITC for people who do not live with children M (23)      
  Include Social Security benefits in calculating the phase-out of the EITC M (24)      
  Consolidate tax credits and deductions for education expenses M (26)      
  Lower the age of dependent eligibility to 13 for the child tax credit M (27)      
Corporate Income Tax Rates        
  Set the corporate income tax rate at 35 percent for all corporations K (19)      
Taxation of Income From Businesses and Other Entities        
  Treat large pass-through entities as C corporations E      
  Eliminate the subchapter S option and tax limited liability companies as C corporations E      
  Tax large credit unions in the same way as other thrift institutions M (32)      
  Tax the income earned by public electric utilities M (34)      
  Cap nonprofit organizations' outstanding stock of tax-exempt bonds M (39)      
  Tax the Federal Home Loan Banks under the corporate income tax M (42)      
  Tax qualified sponsorship payments to postsecondary sports programs M (43)      
Taxation of Income From Worldwide Business Activity        
  Eliminate check-the-box rules D      
  Defer interest deductions related to deferred income D      
  Tax the worldwide income of U.S. corporations as it is earned K (25)      
Taxation of Payroll Income        
  Raise the DI tax rate by 0.4 percentage points G      
  Require self-employed people and employees to pay the same amounts in payroll taxes M (46)      
Other Taxes and Fees        
  Impose a 5 percent value-added tax K (27)      
  Reinstate the Superfund taxes K (34)      
  Impose a tax on emissions of sulfur dioxide M (55)      
  Impose a tax on emissions of nitrogen oxides M (56)      
  Charge for examinations of state-chartered banks M (61)      
  Finance the Food Safety and Inspection Service solely through fees M (65)      

Source: Congressional Budget Office.

Notes: The effects that CBO would estimate for these options now might differ from the amounts shown in the original publication for one or more of the following reasons: The baseline budget projections against which the options would be measured have changed, CBO has revised its estimating methodology or its judgments about the effects of the options, or the estimates for the options span a different projection period.

GSE = government-sponsored enterprise; HAMP = Home Affordable Modification Program; DI = Disability Insurance; PIA = primary insurance amount; COLA = cost-of-living adjustment; IRS = Internal Revenue Service; GPS = Global Positioning System; EITC = earned income tax credit.

a. The options listed appeared originally in the following CBO publications:

b. The savings constitute the change in the primary budget category—mandatory outlays, discretionary outlays, or revenues—and do not necessarily encompass all budgetary effects.

c. To reduce deficits through changes in discretionary spending, lawmakers would need to reduce the statutory funding caps below the levels already established under current law or enact appropriations below those caps. The options listed here could be used to accomplish either of those objectives (although the savings shown for some of the defense options are measured relative to the Defense Department's plans rather than CBO's baseline projections). Alternatively, some of the options could be implemented to comply with the existing caps on discretionary funding rather than to reduce projected deficits.

d. No potential savings are shown for the revenue options because the previous estimates do not account for the significant changes in the tax code enacted early in January 2013 in the American Taxpayer Relief Act of 2012.