Today the Congressional Budget Office released Options for Reducing the Deficit: 2021 to 2030, the latest edition of a report that the agency publishes periodically. The report describes 83 policy options that would decrease federal spending or increase federal revenues over the next decade. Most of the options described in the report would save $10 billion or more in that period. CBO’s website includes a search tool that allows users to filter options from this report as well as options from other publications by savings amounts, major budget category, budget function, topic, and date.
This report aims to provide information to lawmakers as they confront the budgetary challenges facing the nation. At 14.9 percent of gross domestic product (GDP), the deficit in 2020 was the largest it has been since the end of World War II. Much of that deficit stemmed from the 2020 coronavirus pandemic and the government’s actions in response—but the 2020 deficit that CBO projected even before the pandemic (4.9 percent of GDP) was large by historical standards. As deficits accumulate in CBO’s baseline projections, debt held by the public grows to 109 percent of GDP (or $33 trillion) by 2030.
Beyond the coming decade, the fiscal outlook is daunting. In CBO’s projections, growing budget deficits boost federal debt dramatically: By 2050, debt is projected to reach 195 percent of GDP, far higher than any percentage previously recorded in the United States, and is on track to grow even larger.
To put the federal budget on a sustainable long-term path, lawmakers would need to make significant policy changes:
- Allow revenues to rise more than they would under current law,
- Reduce spending to amounts below those currently projected, or
- Adopt some combination of those approaches.
The report is meant to help inform federal lawmakers about the budgetary implications of such policy changes, but the options included do not constitute an exhaustive list. Moreover, they are not recommendations by CBO, nor does the inclusion or exclusion of any particular option imply that CBO endorses it or opposes it. Rather, the options are intended to reflect a range of possibilities.
The options in this report originally come from various sources. Some originated in proposed legislation or budget proposals of various Administrations, others come from Congressional offices or from entities in the federal government or the private sector. Each option entry includes brief background information, a description of the option, and estimates of how much it would save. All of the options in this report also appeared in the 2018 version of the report, and that volume included more detailed background information, a discussion of the basis of the estimates, a discussion of the largest sources of uncertainty, and arguments for and against the change.
The estimates in the report could differ from cost estimates for similar proposals that CBO or the staff of the Joint Committee on Taxation might produce later. The report does not contain comprehensive budget plans; however, it would be possible to devise such plans by combining certain options in various ways (although some would overlap and some would interact with others).
Phillip L. Swagel is CBO’s Director.