Committee for a Responsible Federal Budget
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CBO Releases 2016 Budget Options

Dec 8, 2016 | Budgets & Projections

The Congressional Budget Office released a report Options for Reducing the Deficit: 2017 to 2026, with 115 budget options that either increase revenues or decrease spending over the next decade.

As CBO notes:

To put the federal budget on a sustainable long-term path, lawmakers would need to make significant policy changes—allowing revenues to rise more than they would under current law, reducing spending for large benefit programs to amounts below those currently projected, or adopting some combination of those approaches.

To help Congress, CBO's options cover a variety of areas such as defense, energy, Social Security, health care, and others. They also lay out numerous options to increase revenue from various sources. The report also outlines the pros and cons of each option.  

The table below highlights just a few of the debt-reducing options in each budget category. See the report for more options.

Policy Option 10-Year Savings (billions)
Health Care
Repeal the Affordable Care Act's individual mandate $416 billion
Reform Medicare cost-sharing rules $18-66 billion
Increase manufacturer rebate for Medicare Part D drugs $145 billion
Enact medical malpractice reform $62 billion
Social Security
Make Social Security's benefit formula more progressive $8-36 billion
Use price-indexing for initial benefits instead of wage-indexing $72-114 billion
Increase the maximum taxable earnings for Social Security payroll tax $633-$1,008 billion
Expand Social Security to new state and local government employees $78 billion
Other Mandatory
Reduce crop insurance subsidies $27 billion
Stop disabled veterans from "double dipping" in retirement and disability compensation $139 billion
Limit forgiveness of graduate student loans $19 billion
Eliminate the mandatory portion of Pell Grants $60 billion
Discretionary
Limit highway funding to expected highway revenues $40 billion
Reduce the size of the federal workforce through attrition $50 billion
Cancel additional F-35 Joint Strike Fighters $23 billion
Reduce defense to satisfy "sequestration" caps $251 billion
Tax Expenditures
Limit the value of itemized deductions to 28% instead of the Pease limitation $172 billion
Convert the mortgage interest deduction to a 15% credit $105 billion
Eliminate exemption for new "private activity bonds" (read more) $28 billion
Limit the deduction for charitable donations to those above 2% of adjusted gross income $229 billion
Additional Revenue
Set a 19% minimum tax for foreign earnings of U.S. companies $301 billion
Increase taxes on alcohol to $16 per proof gallon $70 billion
Impose a financial transactions tax $707 billion
Other
Utilize Chained-CPI across the federal budget, for both revenues and mandatory programs $338 billion
($217 billion outside Social Security)

Check out the CBO report to see all of the options, along with arguments for and against each.