Budget Offsets Library

With the national debt on course to exceed its record as a share of the economy in the next two years, interest payments on the debt surging, and major trust funds approaching insolvency, policymakers will need to enact policies to reduce deficits and/or pay for new spending or tax cuts. To help policymakers achieve deficit reduction, the Committee for a Responsible Budget is publishing a series listing policy options to reduce the deficit or use as offsets.

This page will be updated as the Committee publishes new installments in the coming weeks and months. Readers can also contact us to learn more about specific policy changes.

Find each of our options within the tables below, or check out each piece here.

Last Updated: December 13, 2024

$700 Billion of Potential Deficit Reduction Options

Policy 2026-2035 Savings
Executive Spending Authority   
Require Future SNAP TFP Updates to be Budget Neutral $40 billion
Limit Executive Authority to Unilaterally Forgive Student Loans $30 billion
Limit Executive Power to Increase Agricultural Subsidies $10 billion
   
Health Care Spending  
Close Site-Neutral Loophole - End Grandfathering of Hospital-Owned Physician Offices^ $40 billion
Ban Spread Pricing by Pharmacy Benefit Managers (PBMs)  $5 billion
Ban “Facility Fees” for Telehealth and Certain Outpatient Services in Commercial Insurance $5 billion
Reform Medicaid Managed Care Contracts  $5 billion
   
Additional Mandatory Spending  
Extend Mandatory Sequester Cuts*^ $85 billion
Equalize Retirement Contributions for Newer and Older Federal Workers^ $40 billion
Close ‘married-filing-separate’ Student Debt Forgiveness Loophole^ $5 billion
Make Permanent Increase in Maximum Age for SNAP Work Requirements $5 billion
   
User Fees and Asset Sales  
Extend FCC Spectrum Auctions*^ $70 billion
Extend Expiring Customs and Border Patrol (CBP) User Fees*^ $20 billion
Extend Mandatory TSA Fees^ $15 billion
Extend Fannie Mae’s and Freddie Mac’s Guarantee Fees^  $5 billion
   
Tax Compliance  
Extend IRS Program Integrity Funding*^ $130 billion
End Excessive Employee Retention Credit (ERC) Payments $80 billion
Enact Policy Changes to Improve Tax Compliance to Reduce the Tax Gap*^ $10 billion
   
Additional Revenue  
Close the Electric Vehicle (EV) Credit Leasing Loophole $50 billion+
Close Tariff Loophole for 'De Minimis' Imports $25 billion
Treat Digital Assets Like Other Financial Assets $20 billion
Close Carried Interest Loophole $10 billion

All numbers rounded to the nearest $5 billion. Most estimates are based on Congressional Budget Office (CBO) scores and figures.
+We are unaware of any estimate of this policy. $50 billion represents a rough guess.
*Versions of this policy appeared in budgets proposed by Presidents Trump and Biden
^Versions of this policy appeared in budgets proposed by Presidents Trump and Obama
 

Savings from Reversing President Biden's Executive Actions

Policy 2026-2035 Savings
Health Care Actions  
Reverse Executive Expansion of State-Directed Payments in Medicaid $140 billion
Repeal Biden Administration Limits on Medicaid Eligibility Redeterminations $75 billion
Revert Definition of Negotiated Prices Used to Calculate Medicare Part D Rebates $65 billion
Revert ACA Affordability Definition to Self-Only Coverage (Family Glitch) $40 billion
Block Rule Covering GLP-1 Obesity Drugs under Medicare $0/$20/$40 billion*
Eliminate Medicaid Nursing Home Minimum Staffing Standards $25 billion
   
Student Debt Actions  
Repeal SAVE Income-Driven Repayment Program $0/$150/$275 billion+
Prevent Implementation of Interest and Other Debt Cancellation Rule $0/$75/$150 billion*
Prevent Implementation of Hardship Debt Cancellation Rule  $0/$55/$110 billion*’
Partially Repeal Borrower Defense and Closed-School Rules $15 billion
   
Other Biden Administration Actions  
Reverse Executive Actions Increasing SNAP by Modifying Thrifty Food Plan (TFP) $180 billion
Prevent Implementation of Rule Limiting Vehicle Carbon Emissions $150 billion
Revert SSDI Past Relevant Work Period to 15 Years from 5 Years $20 billion
Revert Definition of Public Assistance Household to Pre-2024 Definition for SSI $20 billion
Reverse Directive Limiting Use of IRS Enforcement Funding $20 billion
   
Restrict Future Executive Actions^  
Require Future SNAP TFP Updates to be Budget Neutral $40 billion
Limit Executive Authority to Unilaterally Forgive Student Loans $30 billion
Limit Executive Power to Increase Agricultural Subsidies $10 billion

+The SAVE plan was recently stayed in federal court, which will rule on its legality. The high number assumes SAVE is ruled legal and it is reversed both prospectively and retroactively. The middle number assumes it is ruled legal and reversed only prospectively (so those already enrolled are grandfathered). The low number assumes it is ruled illegal by the courts.
*These rules from the Biden Administration have not been finalized and some may be ruled illegal by the courts. The highest savings figure assumes the rules are finalized and ruled fully legal, the middle savings represents savings if enacted today given the Congressional Budget Office (CBO)’s “50% rule” for preliminary rules, and the $0 represents savings if these changes are withdrawn or struck down by the courts.
‘This is based on estimates from the Department of Education. CRFB estimates costs, and thus savings, would be much larger.
^These options appeared in an earlier CRFB analysis on easy deficit reduction options.
 

Options for Reducing the Deficit Impact of TCJA Extensions

Policy Reduction in Deficit Impact 
of TCJA Extensions 
(2026 – 2035) 
Family Parameters  
Reduce standard deduction by 5% $240 billion
Eliminate additional standard deduction for elderly $100 billion
Phase out standard deduction above $200k/$400k of income $100 billion*
Phase out Child Tax Credit starting at $150k instead of $400k $180 billion
Require valid child and parent SSN for Child Tax Credit  $20 billion
Eliminate Head-of-Household filing status $280 billion
Restrict Head-of-Household status to single parents of kids under 17 $100 billion
   
Minimum Taxes  
Fully restore AMT revenue collection’ $630 billion
Restore AMT revenue collection above $400k’ $320 billion
Restore Pease limitation on itemized deductions $130 billion
   
SALT Deduction  
Repeal SALT deduction in full $240 billion
Eliminate SALT marriage penalty by reducing to $5,000 for single taxpayers $70 billion
Phase out SALT deduction above $400k of income $50 billion*
Apply SALT cap to corporate income taxes $300 billion
Restrict SALT pass-through workaround $180 billion
Disallow business deduction for state and local employer payroll taxes $40 billion
   
Mortgage Interest Deduction  
Repeal full mortgage deduction $360 billion
Reduce $750k cap to $500k on primary residences $130 billion
Replace mortgage deduction with $10,000 first-time homebuyer credit $200 billion
Replace mortgage deduction with 10% credit $40 billion
   
Other Itemized Deductions  
Limit charitable deduction to cash donations $250 billion
Limit ‘double deduction’ for appreciated assets $150 billion*
Set 2% of AGI floor on charitable deduction $210 billion
Repeal deduction for out-of-pocket health costs $200 billion
   
Broader Itemized Deduction Reforms   
Repeal all itemized deductions $1,200 billion
Limit tax benefit of itemized deductions to 15% $700 billion
Limit value of itemized deductions to 24% tax bracket  $250 billion*
Limit value of all deductions to 24% tax bracket $300 billion*
Limit value of all deductions and major exclusions to 24% tax bracket $500 billion*
Limit tax benefit of itemized deductions to 28% $150 billion
   
Pass-Through and Other Business Provisions  
Let 199a pass-through deduction expire $780 billion
Phase out 199a above $200k/$400k $470 billion
Reform 199a to finance investment returns (Greenberg reform) $500 billion
In place of 199a, tax 23.7% of pass-through income as capital gains (Holtz-Eakin reform) $350 billion*
Let Opportunity Zones expire $70 billion
Strengthen pass-through loss limit by disallowing conversion to NOLs $20 billion
   
Estate Tax   
Let estate tax cut expire to 2017 level $190 billion
Reset estate tax to 2018 (post-TCJA) parameters w/ $11m exemption and freeze $80 billion*
Close various estate tax loopholes, restrict use of trusts, improve valuations $50 billion*
Adopt carry-over basis for capital gains at death $200 billion*
   
Tax Rate Schedule  
Let tax rate cuts expire $3,400 billion
Set rates halfway between pre- and post-TCJA levels (at post-TCJA brackets) $1,600 billion
Set top rate to 39.6% above $400k $650 billion
Freeze indexation of tax parameters between 2025 and 2027 (two years) $700 billion*
Freeze indexation of tax parameters between 2025 and 2026 (one year) $400 billion*
Reduce bracket thresholds for top three individual income tax rates by 10% $100 billion
   
Individual Tax Rates  
Raise top (37%) bracket $150 billion/point
Raise sixth (35%) bracket $60 billion/point
Raise fifth (32%) bracket $40 billion/point
Raise fourth (24%) bracket $150 billion/point
Raise third (22%) bracket $270 billion/point
Raise second (12%) bracket $470 billion/point
Raise bottom (10%) bracket $240 billion/point

Sources: Committee for a Responsible Federal Budget and CRFB adjustments of estimates from Congressional Budget Office, Joint Committee on Taxation, Internal Revenue Service, Tax Foundation, Pomerleau-Schneider, as well as underlying estimates from Solutions Initiative 2024 plans (using scores from Tax Policy Center) from American Enterprise Institute, Manhattan Institute, Bipartisan Policy Center, and American Action Forum.
* Represents very rough estimates
’ This would involve adjusting the AMT rates to achieve specific revenue collection targets.
 

Options to Reduce Federal Medicaid Spending

Policy 2026-2035 Savings
Caps or Block Grants for Medicaid
Block Grant Medicaid Payments, Index to Inflation (CPI-U) $900 billion*
Block Grant Medicaid Payments, Index to Inflation+1% $550 billion*
Block Grant Medicaid Payments, Index to Gross Domestic Product $350 billion*
Cap State Medicaid Growth, By Category, to Inflation $950 billion
Cap State Medicaid Growth, By Category, to Inflation+1% $600 billion
Cap Per Capita State Medicaid Growth, By Category, to Inflation $1,100 billion
Cap Per Capita State Medicaid Growth, By Category, to Inflation+1% $750 billion
Establish a 'Soft' Medicaid Cap, w/Grace Period & Growth Beyond Inflation Reimbursed at 1/2 Normal Rate $400 billion* 
   
Changes to Federal Medical Assistance Percentage (FMAP) Matching Rate
Remove the 50% FMAP Floor $600 billion 
Reduce FMAP Floor to 45% $350 billion 
Reduce FMAP for Administrative Costs to 50% $80 billion 
Repeal 6% FMAP Bonus for Home- and Community-Based Care ("Community First Choice Option")  $20 billion 
Reduce Family Planning Services Match from 90% to Normal FMAP  $15 billion^
Reduce FMAP for Case Management Costs to 50% $5 billion^
Reduce Base FMAPs Across the Board $100 billion/point'
Reduce All FMAPs Across the Board $115 billion/point'
   
ACA Medicaid Expansion
Reduce Match on Expansion Population from 90% to Normal FMAP $650 billion 
Move Expansion Population Above Poverty Line to Exchanges $100 billion`
Adopt a Single "Blended Rate" for Each State's Medicaid Match $50 billion#
Reduce FMAP on Expansion Population $15 billion/point'
   
Medicaid Provider Taxes
Ban Medicaid Provider Tax Gimmicks $720 billion 
Limit Provider Taxes to 2.5% of Provider Revenue (Current Law=6%) $285 billion 
Limit Provider Taxes to 5% of Provider Revenue (Current Law=6%)  $55 billion 
Limit Provider Taxes to 5% of State General Funding $550 billion*
Limit Provider Taxes to 10% of State General Funding $350 billion*
   
Financing Schemes and Supplemental Payments
Restrict State Use of Supplemental Payments $500 billion*
Reverse Executive Action Expanding State-Directed Payments $140 billion
Make Scheduled Medicaid DSH Cuts Permanent $65 billion 
End Medicaid Graduate Medical Education (GME) Reimbursement $65 billion 
Restrict State Use of Intergovernmental Transfers (IGTs)  $50 billion^
   
Benefits and Coverage
Impose Work Requirements for Certain Medicaid Beneficiaries $140 billion 
Allow States the Option to Impose Work Requirements $30 billion 
Repeal Biden Administration Limits on Medicaid Redeterminations $75 billion 
Encourage States to Increase Frequency of Redeterminations $40 billion
Prohibit Federal Payments for Certain School-Based Administrative & Transportation Services $20 billion 
Restrict Medicaid Retroactive Coverage $10 billion 
Increase Allowable Medicaid Cost-Sharing  $10 billion*^
Strengthen Medicaid Asset Tests $5 billion 
Restrict Payments for Unauthorized Immigrants, Prisoners, Lottery Winners $5 billion 
   
Other Medicaid Changes
Rescind Medicaid Nursing Home Minimum Staffing Standards Rule $25 billion 
Lower Medicaid Drug Prices through Negotiations and Rebates $20 billion
Reform Medicaid Managed Care Contracts  $5 billion 
Limit durable Medical Equipment (DME) Reimbursement $5 billion 

Sources: Committee for a Responsible Federal Budget, Congressional Budget Office, Centers for Medicare and Medicaid Services, and Paragon Health Institute.
*Rough estimated provided by Committee for a Responsible Federal Budget. 
^Based on pre-2010 estimate, actual savings could differ substantially.
#Policy is Fully Scalable.
'Excludes possible effects on coverage.
`Blase and Gonshorowski estimate direct savings of $50 billion, but effects on coverage could increase savings to $150 billion.