Options for Reducing the Deficit, 2023 to 2032--Volume I: Larger Reductions
CBO issues a volume describing 17 policy options that would each reduce the federal budget deficit by more than $300 billion over the next 10 years or, in the case of Social Security options, have a comparably large effect in later decades.
Summary
At the request of the House and Senate Committees on the Budget, the Congressional Budget Office periodically issues a compendium of budget options to help inform federal lawmakers about the implications of possible policy choices that would reduce the deficit. This year, the report is presented in two volumes. This volume, Options for Reducing the Deficit, 2023 to 2032—Volume I: Larger Reductions, contains detailed descriptions of 17 options that would each reduce the deficit by more than $300 billion over the next 10 years or, in the case of Social Security options, have a comparably large effect in later decades. A second volume, Options for Reducing the Deficit, 2023 to 2032—Volume II: Smaller Reductions, contains short descriptions of 59 options that would each reduce the deficit by less than $300 billion over that 10-year period.
The options come from a variety of sources, including legislative proposals, budget proposals from various Administrations, Congressional staff, other government entities, and private groups. The options are intended to reflect a range of possibilities rather than to rank priorities or present a comprehensive list. The inclusion or exclusion of a particular option does not represent an endorsement or a rejection by CBO. In keeping with CBO’s mandate to provide objective, impartial analysis, this report makes no recommendations.
Summary Table of Options
| Title | Savings, 2023–2032 (Billions of Dollars) |
|---|---|
| Establish Caps on Federal Spending for Medicaid | 501 to 871 |
| Limit State Taxes on Health Care Providers | 41 to 526 |
| Reduce Federal Medicaid Matching Rates | 68 to 667 |
| Increase the Premiums Paid for Medicare Part B | 57 to 448 |
| Reduce Medicare Advantage Benchmarks | 392 |
| Reduce Tax Subsidies for Employment-Based Health Insurance | 500 to 893 |
| Reduce Social Security Benefits for High Earners | 40 to 184 |
| Set Social Security Benefits to a Flat Amount | 270 to 593 |
| Increase the Maximum Taxable Earnings That Are Subject to Social Security Payroll Taxes | 670 to 1,204 |
| Reduce Spending on Other Mandatory Programs | 580 |
| Reduce the Department of Defense's Annual Budget | 995 |
| Reduce Nondefense Discretionary Spending | 332 |
| Increase Individual Income Tax Rates | 502 to 1,329 |
| Eliminate or Limit Itemized Deductions | 541 to 2,507 |
| Impose a New Payroll Tax | 1,136 to 2,253 |
| Impose a Tax on Consumption | 1,950 to 3,050 |
| Impose a Tax on Emissions of Greenhouse Gases | 571 to 865 |
For options affecting primarily mandatory spending or revenues, savings sometimes would derive from changes in both. When that is the case, the savings shown include effects on both mandatory spending and revenues.
Data and Supplemental Information
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Corrections and Updates
CBO has corrected this report since its original publication online. Corrections are listed at the end of the report.