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Fiscal Commission Plan
December 1, 2010
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President's FY 2013 Budget
February 13, 2012
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Second Democratic Super Committee Offer
November 9, 2011
Defense
  • Caps 2012 spending at 2011 levels, returns to 2008 levels in 2013, then limits growth to half the rate of inflation
  • Offers illustrative cuts to achieve savings
  • Adheres to the discretionary spending caps in the Budget Control Act by:
    • Reducing troop levels in the Army and Marines
    • Eliminating or delaying some acquisitions, such as the F-35 Joint Strike Fighter and the Army Ground Combat Vehicle
    • Reforming military compensation, by capping military pay and increasing fees in TRICARE, among other changes
  • Repeals automatic trigger, which would cut $454 billion from defense spending through 2022
  • Cuts $200 billion below the levels of the Budget Control Act spending caps
Domestic Discretionary
  • Caps 2012 spending at 2011 levels, returns to 2008 levels in 2013, then limits growth to half the rate of inflation
  • Makes Transportation Trust Fund mandatory and raises gas tax to finance costs
  • Adopts immediate spending and government efficiency reforms
  • Adheres to the discretionary spending caps in the Budget Control Act
  • Repeals automatic trigger, which would cut $294 billion from non-defense programs through 2021
  • Cuts $200 billion below the levels of the Budget Control Act spending caps
  • Increases infrastructure spending as part of jobs package
Social Security
  • Slows benefit growth for high and medium-income workers
  • Increases early and normal retirement ages and index for longevity (but creates “hardship exemption”)
  • Indexes COLAs to chained CPI
  • Includes newly hired state and local workers after 2020
  • Increases payroll tax cap to cover 90% of wages by 2050
  • Creates new minimum and old-age benefits
  • No changes but calls for Social Security reform
  • No changes
Health Care
  • Reforms the Sustainable Growth Rate (“doc fix”)
  • Reforms or repeals CLASS Act
  • Reduces federal health spending by:
    • Increasing Medicare cost sharing
    • Tort reform
    • Changes to provider payments
    • Increase drug rebates
    • Various other reforms
  • Establishes a long-term budget for total health care spending to limit health care cost growth after 2020 to GDP+1
  • Continues yearly doc fixes
  • Standardizes the Medicaid matching rate
  • Increases drug rebates from pharmaceutical companies in Medicare
  • Restricts Medicaid gaming by states
  • Modestly increases Medicare cost-sharing
  • Increases Medicare premiums for high earners
  • Reduces Medicare hospital reimbursements for bad debts
  • Reduces Medicare payments for graduate medical education
  • Reduces payments for certain post-acute care providers
  • Strengthens IPAB by lowering its target rate of Medicare growth from GDP per capita plus 1% to GDP per capita plus 0.5%
  • Repeals automatic trigger, which would cut $123 billion from Medicare through 2021
  • Continues yearly doc fixes
  • Extends Disproportionate Share Hospital (DSH) payment cuts through 2021
  • Reduces reimbursement of durable medical equipment
  • Restricts Medicaid state gaming
  • Cuts Prevention and Public Health Fund by $8 billion
  • Increases Medicare Part D drug rebates
Other Mandatory
  • Uses chained CPI for all inflation-indexed programs
  • Reforms military and civil service retirement
  • Reduces farm subsidies
  • Reduces student loan subsidies
  • Various others
  • Reduces farm subsidies
  • Maintains maximum Pell Grant award and lowers interest rate on Stafford subsidized loans
  • Eliminates in-school student loan interest subsidies for certain undergraduate students
  • Increases various user fees such as aviation security
  • Increases federal employee retirement contributions
  • Reforms the Postal Service
  • Institutes a "financial crisis responsbility fee" on banks
  • Increases the unemployment insurance tax base
  • Increases IRS funding to tackle the tax gap
  • Repeals automatic trigger, which would cut $47 billion from other mandatory programs through 2021
  • Saves $200 billion from other mandatory programs and fee increases
Tax Expenditures
  • Eliminates all tax expenditures as starting point, and then allows them to be added back in exchange for higher rates
  • Presents illustrative plan which turns mortgage and charitable deductions into 12% credit, caps retirement plans, retains child tax credit and EITC, phases out health exclusion, and eliminate most other tax expenditures
  • Uses threat of across-the-board cut in tax expenditure cuts if comprehensive reform is not enacted
  • Limits itemized deductions and certain above-the-line deductions and exclusions for upper-income taxpayers
  • Closes various international and corporate tax loopholes
  • Extends American Opportunity tax credit, research and experimentation tax credit, EITC for larger families, and other individual and corporate credits and deductions
  • Various others
  • Enacts tax reform trigger which raises $325 billion by limiting itemized deductions for high-income taxpayers
Tax Reform
  • Assume2001/2003 tax cuts under $250,000 extended
  • Indexes tax code to chained CPI
  • Increases gas tax by $0.15 to finance highways

Calls for comprehensive reform, which:

  • Reforms or repeals most tax expenditures
  • Eliminates AMT, PEP, and Pease
  • Consolidates 6 Individual Rates into 3
  • Reduces top corporate and individual rate to between 23% and 29%
  • Maintains or increases progressivity of the tax code
  • Moves to a territorial tax system
  • Extends 2001/2003 tax cuts for people under $250,000
  • Taxes capital gains at 20%
  • Sets estate tax at 2009 parameters
  • Calls for tax reform that reduces tax expenditures, lower tax rates, maintains progressivity, and replaces the current AMT with the "Buffett Rule," requiring a minimum level of taxes of 30% on millionaires and of 10% on multinational companies
  • Calls for corporate tax reform that eliminates loopholes, reduces distortions, and levels the playing field in order to lower the corporate tax rate to 28%
  • Raises $350 billion as a "down payment" for tax reform from miscellaneous revenue provisions
  • Calls for tax reform that includes:
    • Corporate tax reform to improve competitiveness
    • A top individual tax rate of no higher than 35%
    • Distributional effects that ensure a tax code at least as progressive as current law
    • An additional $650 billion in revenue on top of the down payment, to be enacted by January 1, 2013
  • Enacts tax reform "trigger" which raises $650 billion by limiting itemized deductions for high-income taxpayers and putting in place an income tax surcharge if tax reform is not enacted
Budget Process
  • Relies on discretionary caps
  • Caps revenues at 21% of GDP
  • Calls for tax expenditure failsafe if revenue targets are not met
  • Establishes a debt stabilization process which creates a fast track procedure for deficit reduction if the debt to GDP ratio is not declining after 2015
  • Creates a Transportation Trust Fund and makes it a mandatory program
  • Caps war spending
  • Creates enhanced rescission authority
  • Calls for a debt failsafe which triggers automatic spending and tax expenditure reductions if debt-to-GDP is not projected to be declining by the second half of the decade
  • Further reduces discretionary spending caps
  • Ties entitlement program cuts to enactment of tax reform or implementation of the trigger; the former only happens if the latter does
  • Caps war spending, uses it to pay for doc fixes and jobs package
Fiscal Metrics 2020*
Spending 22.0% 22.5% -
Revenue 20.5% 19.7% -
Debt 65% 77% -
Long-Term Debt 40%
(2035) 
93%
(2035) 
-

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Second Republican Super Committee Offer
November 8, 2011
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FY 2013 House Republican Budget Resolution
March 20, 2012
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Gang of Six Plan
July 19, 2011
Defense
  • Cuts $240 billion from discretionary spending below Budget Control Act caps (defense proportion of cuts is unknown)
  • Alters discretionary spending caps to "re-prioritize" sequester defense cuts to non-defense programs
  • Increases inflation-adjusted defense spending above the original caps set by the Budget Control Act
  • Enacts discretionary caps on security spending for ten years, with five-year caps enacted upfront as part of downpayment
  • Requires Budget Committee to create proposal to extend caps through 2021
Domestic Discretionary
  • Cuts $240 billion from discretionary spending below Budget Control Act caps (non-defense proportion of cuts is unknown)
  • Alters discretionary spending caps to "re-prioritize" sequester defense cuts to non-defense programs
  • Enacts discretionary caps on non-security spending for ten years, with five-year caps enacted upfront as part of downpayment
  • Freezes congressional pay
  • Instructs specific Committees to identify specified savings
  • Requires Budget Committee to create proposal to extend caps through 2021
Social Security
  • Indexes COLAs to chained CPI
  • Proposes a process where the President, in conjunction with the Board of Trustees, and Congress must put forward plans to restore solvency if the program is projected to be insolvent
  • Instructs Congress to enact Social Security reform that ensures 75-year solvency
  • Indexes COLAs to chained CPI
  • Creates new minimum benefit
Health Care
  • Increases Medicare retirement age to 67
  • Increases Medicare premiums for high earners
  • Various others
  • Assumes continuation of yearly doc fixes are fully offset
  • Repeals the tax and coverage provisions from health care reform, but keeps most Medicare savings (not IPAB)
  • Block grants Medicaid and holds growth to rate of inflation plus population growth
  • Enacts tort reform
  • Transforms Medicare to premium-support program in 2023 and limits per beneficiary growth of premium support to GDP+0.5%
  • Reforms the Sustainable Growth Rate ("doc fix")
  • Repeals the CLASS Act from the health care reform legislation
  • Requires additional $202 billion in health care savings
  • Instructs the Judiciary Committee to identify savings from tort reform
  • Sets target for health care spending after 2020 at GDP+1% per beneficiary, and requires action by Congress and President if not met
Other Mandatory
  • Uses chained CPI for all inflation-indexed programs
  • Increases various user fees
  • Sells government assets
  • Various others
  • Reduces and block grants food stamps in 2016, limits growth to inflation and eligibility
  • Reduces farm subsidies
  • Reforms civil service retirement
  • Reduces student loan subsidies
  • Various others
  • Instructs the Agriculture Committee to identify $11 billion in savings (protecting food stamps)
  • Use chained CPI for all inflation indexed programs
  • Requires GAO and Department of Labor to design more effective unemployment insurance trigger
  • Sells excess federal property
  • Reduces waste, fraud, and abuse
  • Various others
Tax Expenditures
  • Calls for tax reform that eliminates or reduces many tax expenditures
  • Calls for unspecified base broadening as part of a revenue-neutral tax reform plan
  • Reforms tax expenditures for health, charitable giving, homeownership, and retirement
  • Retains support for low-income workers
  • Retains EITC
Tax Reform
  • Assumes extension of the 2001/2003 tax cuts
  • Calls for tax reform that lowers the top rate to 28%, eliminates or reduces many tax expenditures, and raises $250 billion of revenue
  • Indexes tax code to chained CPI
  • Assumes 2001/2003/2010 tax cuts extended for all earners
  • Consolidates six income tax brackets with a top rate of 35 percent to two brackets of 10 and 25 percent
  • Reduces the corporate tax rate to 25 percent
  • Repeals the AMT
  • Switches to a territorial system of international taxation
  • Calls for unspecified base broadening as part of a revenue-neutral tax reform plan
  • Instructs the Finance Committee to propose tax reform within six months that would lower tax rates, broaden the tax base, and produce economic growth
  • Calls for three tax brackets of ranges from 8-12%, 14-22%, and 23-29%
  • Permanently repeals the AMT
  • Calls for tax reform that raises $1 trillion over ten years, plus additional additional $133 billion by 2021 (not from a gas tax) for the Highway Trust Fund
  • Establishes single corporate tax rate between 23-29%
  • Moves to a territorial tax system
Budget Process
  • Further reduces caps on discretionary spending
  • Relies on discretionary caps
  • Establishes a binding cap on total spending as a percentage of the economy (enforced by sequester)
  • Creates a budget point of order against legislation that would increase net mandatory spending beyond the ten-year window
  • Establishes a regular review process for mandatory programs
  • Uses fair-value accounting for credit programs
  • Requires dynamic scoring of major legislation
  • Relies on discretionary caps
  • Restricts use of emergency designations to circumvent the caps
  • Creates 2/3 point of order to waive discretionary caps
Fiscal Metrics 2020*
Spending - 19.5% -
Revenue - 18.5% -
Debt - 65% 71%
Long-Term Debt - 38%
(2040) 
-

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President's Submission to the Super Committee
September 19, 2011
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FY 2012 House Republican Budget Resolution
April 5, 2011
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Rep. Paul Ryan's Roadmap
January 27, 2010
Defense
  • Adheres to discretionary spending caps in the Budget Control Act
  • Adopts security proposals in President’s FY 2012 budget, holding defense spending growth near inflation
  • Limits all spending growth in 2020 and beyond (excluding Social Security, Medicare, Medcaid, and interest) to inflation + population growth
Domestic Discretionary
  • Adheres to discretionary spending caps in the Budget Control Act
  • Increases infrastructure spending
  • Creates a national infrastructure bank
  • Includes aid to states for retention of teachers and first responders
  • Cuts non-security funding (including spending on international affairs) back to FY 2006 levels in 2012, freezes for five years, and holds growth thereafter to inflation
  • Adopts immediate spending and government efficiency reforms
  • Freezes non-defense, non-stimulus at 2009 levels until 2020
  • Starting in 2020, assumes spending growth limited to inflation plus 0.7%
  • Rescinds all unused ARRA funds
Social Security
  • No changes, but calls for Social Security reform
  • Proposes a process where the President, in conjunction with the Board of Trustees, and Congress must put forward plans to restore solvency if the program is projected to be insolvent
  • Slows benefit growth for high and medium-income workers
  • Indexes normal retirement age to longevity until it reaches 70
  • Creates optional personal accounts of 2% for the first $10,000 and 1% of income between that and payroll tax cap, eventually increasing to 8 percent up to the inflation-adjusted level, and 4% of payroll above that, for those under 55
  • Uses general revenue to replenish trust funds
  • Creates new minimum benefit
Health Care
  • Reduces Medicare hospital reimbursement of bad debts
  • Cuts payments for graduate medical education
  • Increases rebates from pharmaceutical companies for Medicare Part D
  • Reduces certain provider payments, including for skilled nursing facilities, certain post-acute care providers, and rural providers
  • Increases Medicare premiums for high earners
  • Restricts Medigap coverage of cost-sharing
  • Modestly increases Medicare cost-sharing
  • Restricts state Medicaid gaming
  • Standardizes Medicaid matching rate
  • Includes Social Security benefits in income calculation for Medicaid and exchange subsidy eligibility
  • Strengthens IPAB by lowering its target Medicare growth rate from GDP per capita plus 1% to GDP per capita plus 0.5%
  • Assumes continuation of yearly doc fixes are fully offset
  • Repeals the tax and coverage provisions from health care reform, but keeps most Medicare savings (not IPAB)
  • Block grants Medicaid in 2013 and holds growth to rate of inflation plus population growth
  • Enacts tort reform
  • Transforms Medicare to premium-support program in 2022 and limits per beneficiary growth of premium support to inflation
  • Allows interstate purchasing, small business pools, and state based exchanges
  • Enacts tort reform
  • If 45% or more of Medicare funding is from general revenues, a 1% reduction in provider payments applies starting in 2020
  • Increases Medicare cost sharing
  • Creates a new system of vouchers to replace Medicare and Medicaid. Medicare vouchers would grow by 2.7% over the long-term, but Medicaid vouchers would grow at an undetermined rate
  • SCHIP population eligible for health care tax credits
Other Mandatory
  • Reduces farm subsidies
  • Increases federal employee retirement contributions
  • Increases Fannie/Freddie guarantee fees
  • Increases various user fees, such as aviation security and air traffic services
  • Reforms the Postal Service
  • Auctions spectrum
  • Sells federal property
  • Increases the unemployment insurance tax base
  • Increases funding for the IRS to improve tax collection
  • Enacts “financial crisis responsibility fee” on banks
  • Extends unemployment insurance benefits for one year
  • Reduces and block grants food stamps, limits growth to inflation and eligibility
  • Reduces farm subsidies
  • Reforms civil service retirement
  • Reduces student loan subsidies
  • Various others
  • Limits spending growth in 2020 and beyond to inflation plus 0.7%
  • Improves job training
Tax Expenditures
  • Limits itemized deductions and certain above-the-line deductions and exclusions for high earners
  • Closes various international and corporate tax loopholes
  • Extends American opportunity tax credit, research and experimentation credit, EITC for lager families, and other individual and corporate credits and deductions
  • Creates a tax credit for hiring veterans
  • Calls for revenue neutral tax reform that reduces the top individual and corporate rate to 25%, paid for by reforming or repealing most tax expenditures
  • Eliminates health care exclusion with refundable credit as part of health reform
  • Clears out nearly all of the existing tax deductions and credits
Tax Reform
  • Extends the 2001/2003 tax cuts for people making under $250,000
  • Taxes capital gains at 20% and dividends at ordinary income rates
  • Calls for tax reform that lower tax rates, maintains progressivity, and raises revenue
  • Extends payroll tax cut for one year, expands it to 3.1 percent, and expands it to employers
  • Assumes 2001/2003 tax cuts extended for all earners
  • Calls for revenue neutral tax reform that reduces the top individual and corporate rate to 25%, paid for by reforming or repealing most tax expenditures
  • Caps total revenue at 19% GDP
  • Assumes all 2001/2003 tax cuts extended
  • Offers individual taxpayers a choice -current tax system or new Simplified Tax: 10% rate for <$50,000 single filers ($100,000 for joint filers) or 25% rate for >$100,00 single filers ($200,000 joint filers)
  • Eliminates taxes on estates, dividends, capital gains
  • Repeals AMT
  • Increases standard deduction
  • Eliminates corporate income tax and replaces it with a business consumption tax of 8.5% on goods and services
Budget Process
  • Relies on discretionary spending caps
  • Caps war spending
  • Relies on discretionary caps
  • Establishes a binding cap on total spending as a percentage of the economy (enforced by sequester)
  • Creates a budget point of order against legislation that would increase net mandatory spending beyond the ten-year window
  • Establishes a regular review process for mandatory programs
  • Establish binding cap on total government spending as a % of GDP
  • Every five years, evaluates to see if spending will increase at an “out of control” manner, faster growing programs would be slowed by no more than 1%
  • Institutes 3/5’s majority requirement to increase taxes
Fiscal Metrics 2020*
Spending - 20.0% 22.5%
Revenue - 18.0% 18.5%
Debt 74% 70% 69%
Long-Term Debt - 48%
(2040) 
93%
(2035) 

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President's Framework
April 13, 2011
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President's FY 2012 Budget
February 14, 2011
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Steven Pearlstein's Plan
May 12, 2010
Defense
  • Calls for reductions in security spending to hold annual defense growth to below inflation
  • Cuts $78 billion over the 2012-2016 period, including cuts to unneeded weapons systems and small reductions in Army and Marine personnel
  • Limits growth of defense spending to inflation, excluding funding for wars
Domestic Discretionary
  • Holds non-security spending to levels consistent with Fiscal Commission (real 2008 levels)
  • Freezes non-security spending for five years over the 2011-2015 period, achieved through over 100 specified terminations and reductions
  • Limits growth of discretionary spending to inflation, excluding natural disasters and safety-net spending
Social Security
  • No changes, but calls for Social Security reform that:
    • Restores long-term solvency
    • No privatization or weakening of the Social Security system
    • No current beneficiaries should see benefits reduced
    • Strengthens retirement security for most vulnerable
  • No changes, but calls for Social Security reform
  • Raises retirement age by one month for each two-month increase in life expectancy
  • Gradually reduces COLAs for high earners
  • Reduces payroll tax slightly to 12%
  • Increases payroll tax cap to $150,000
Health Care
  • Assumes continuation of yearly doc fixes
  • Proposes health care savings from standardizing the Medicaid matching rate, prescription drug reforms, patient safety initiatives, and anti-fraud measures
  • Strengthens IPAB by broadening its mandate and limiting Medicare growth to GDP+0.5% per beneficiary instead of GDP+1%
  • Offsets doc fix with specific policies for two years, including reducing Medicaid gaming by states and prescription drug reforms, but assumes all future costs offset too
  • Enacts limited tort reform
  • Raises Medicare eligibility age by one month for each two-month increase in life expectancy
  • Holds federal health spending increases to GDP growth plus 1% each year
  • Gradually increases Medicare premiums for high earners
  • Raises Medicare payroll tax slightly to 3% and applies it to all income
Other Mandatory
  • Sets a mandatory savings target and calls for building on mandatory savings in President’s FY2012 budget
  • Reduces farm subsidies
  • Reforms student loans
  • Various others
Tax Expenditures
  • Supports the model of tax reform proposed by the Fiscal Commission – eliminating individual and corporate tax expenditures to lower rates and reduce the deficit
  • Limits itemized deductions to pay for 3-year AMT patch
  • Closes various international and corporate tax loopholes
  • Extends American opportunity tax credit, research and experimentation credit, EITC for lager families, and other individual and corporate credits and deductions
  • Various others
  • Increases standard deduction and personal exemptions so that no family of four making less than $50,000 would pay federal income tax
  • Closes certain corporate tax loopholes
Tax Reform
  • Assumes 2001/2003 tax cuts under $250,000 extended
  • Supports efforts to build on the Fiscal Commission’s goal of reducing tax expenditures to lower rates and lower the deficit
  • Calls for corporate tax reform that eliminates loopholes, reduces distortions, and levels the playing field in order to lower the corporate tax rate
  • Extends 2001/2003/2010 tax cuts under $250,000
  • Enacts new financial and energy taxes
  • Taxes capital gains and dividends at 20% for high earners
  • Reduces tax gap
  • Reforms unemployment taxes
  • Calls for revenue neutral corporate tax reform that closes loopholes and lowers rates
  • Taxes wages, salaries, and capital gains at three marginal rates: 17%, 27%, and 37%
  • Taxes interest, dividends, and long-term capital gains at 20%
  • Imposes VAT of 6% with rebates for lower-income households
  • Reduces corporate rate from 35% to 25%
  • Replaces gas tax with carbon tax (all revenue to fund new transportation infrastructure fund)
  • Eliminates inheritance tax, but requires all estates to pay any deferred and unpaid capital gains taxes on all assets before distribution
Budget Process
  • Calls for a debt failsafe which triggers automatic spending and tax expenditure reductions if debt-to-GDP is not projected to be declining (2.8% of GDP deficits) the second half of the decade
  • Renews statutory PAYGO
  • Makes Transportation Trust a mandatory program
  • Creates enhanced rescission authority
Fiscal Metrics 2020*
Spending 22.5% 24.0% -
Revenue 19.5% 19.0% -
Debt 76% 86% -
Long-Term Debt - 103%
(2035) 
-

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Galston-MacGuineas Plan
September 30, 2010
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Esquire Commission
October 13, 2010
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National Taxpayers Union/USPIRG
October 28, 2010
Defense
  • Cuts unneeded weapons systems
  • Reforms military pay and TRICARE
  • Reforms contracting
  • Scales back R&D
  • Creates war surtax after 2015
  • Enacts President’s cuts
  • Reverses “Grow the Army” Initiative
  • Restructures military on strategic lines
  • Assumes war costs decline
  • Scales back or eliminates outdated, ineffective, and wasteful military programs
  • Implements acquisition reforms indentified by the bipartisan Defense Acquisition Panel
Domestic Discretionary
  • Freezes non-defense spending for 3 years through caps, then limits growth to inflation
  • Delays some NASA missions
  • Eliminates earmarks
  • Limits discretionary growth to inflation
  • Rescinds unused TARP funds
  • Sells excess government property
  • Eliminates many programs and subsidies
  • Implements program integrity measures
Social Security
  • Slows benefit growth for high and medium-income workers
  • Increases normal retirement age and indexes for longevity
  • Indexes COLAs to chained CPI
  • Includes newly hired state and local workers
  • Creates new minimum and old-age benefits
  • Creates mandatory add-on accounts
  • Reduces and makes the payroll tax more progressive (replaces revenues with some of the proceeds from energy tax)
  • Increases retirement age to 70 before 2021
  • Indexes COLAs to chained CPI
  • Increases years used to calculate benefits from 35 to 38 years
  • Includes new state and local workers
Health Care
  • Creates a budget for health care
  • Reduces new health care subsidies from health care reform law
  • Enacts tort reform
  • Increases Medicare cost sharing
  • Strengthens IPAB
  • Indexes eligibility age for Medicare to longevity
  • Assumes no yearly doc fixes, meaning doctors would face 30% cut in Medicare reimbursements and additional cuts over the next decade
  • Enacts tort reform
  • Recalibrates Medicare payments to cover actual costs for its graduate education program
  • Recalibrates Medicare reimbursement rates in high-cost regions
Other Mandatory
  • Uses chained CPI for all inflation-indexed programs
  • Phases out farm subsidies and replaces them with catastrophic insurance
  • Various others
  • Indexes federal and military pensions to chained CPI
  • Cuts federal workforce by 5%
  • Reforms farm subsidies
  • Removes ceiling on the collection of overpayments for the SSI
  • Reduces farm subsidies
  • Various others
Tax Expenditures
  • Calls for reducing tax expenditures by 10% (then indexing to inflation); divides proceeds between lower tax rates and deficit reduction
  • To meet the 10% goal, suggests limiting mortgage interest deduction for expensive homes, phasing out state & local deduction, replacing health exclusion with a credit, and consolidating various tax breaks for education and savings
  • Repeals health care exclusion and replaces with credit
  • Limits itemized deductions to 28% and phases out personal exemptions for high earners
  • Curtails state and local tax deduction
  • Eliminates subsidies for bio-fuels
  • Eliminates refundable tax credits for ethanol
Tax Reform
  • Assumes 2001/2003 tax cuts under $250,000 extended
  • Indexes all of tax code to the chained CPI
  • Institutes a carbon tax (some proceeds go toward reducing the payroll tax)
  • Revenue neutral corporate tax reform to broaden base and lower rate
  • Uses most revenue savings to keep current tax rates set to expire at end of 2010 “at or near their current levels”
  • Increases gas tax by $1 per gallon
  • Reinstates increased AMT exemptions in the 2009 stimulus that expired at the end of 2009
Budget Process
  • Institutes fiscal goal of 60% debt-GDP by 2020
  • Relies on discretionary cap
  • Enacts cap and PAYGO rules for tax expenditures
  • Relies on discretionary caps
Fiscal Metrics 2020*
Spending 22.0% 21.0% -
Revenue 21.5% 21.0% -
Debt 60% 52% -
Long-Term Debt - - -

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Fiscal Commission Co-Chair Proposal
November 10, 2010
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Rep. Jan Schakowsky's Plan
November 16, 2010
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Debt Reduction Task Force (Domenici-Rivlin)
November 17, 2010
Defense
  • Caps 2012 spending at 2010 levels, cuts 1% each year from 2013-2015, then limits growth to inflation
  • Creates enforcement mechanism for caps
  • Cuts various military projects
  • Reduces military to pre-war levels
  • Reduces contracting
  • Reduces strategic nuclear arsenal
  • Freezes defense spending for 5 years through caps, then limits growth to GDP
Domestic Discretionary
  • Caps 2012 spending at 2010 levels, cuts 1% each year from 2013-2015, then limits growth to inflation
  • Creates enforcement mechanism for caps
  • Moves the Transportation Trust Fund to mandatory spending
  • Budgets for disasters
  • Eliminates Overseas Private Investment Corporation
  • Sells excess federal property
  • Reduces unnecessary printing costs
  • Reduces inefficient and improper payments by 5%
  • Implements other efficiencies
  • Freezes non-defense spending for 4 years through caps, then limits growth to GDP
Social Security
  • Slows benefit growth for high and medium-income workers
  • Increases early and normal retirement ages and index for longevity (but create “hardship exemption”)
  • Indexes COLAs to chained CPI
  • Includes newly hired state and local workers after 2020
  • Increases payroll tax cap to cover 90 percent of wages by 2050
  • Creates new minimum and old-age benefits
  • Eliminates tax cap on employer side, raises to 90% on employee side
  • Enacts a 3-4% tax on all earnings above the tax cap
  • Treats other salary reduction plans like 401(k)s
  • Reduces benefit formula for highest earners
  • Indexes benefits for changes in longevity
  • Indexes COLAs to chained CPI
  • Includes newly hired state and local workers
  • Increases payroll tax cap to cover 90% of wages
  • Creates new minimum and old-age benefits
  • Broadens the payroll tax base to cover health and other employer benefits
Health Care
  • Reforms the “doc fix”; paid for by:
    • Increasing Medicare cost sharing
    • Enacting tort reform
    • Replacing SGR with modest reductions and make new schedule
    • Various others
  • Expands successful payment reform pilots
  • Strengthens IPAB
  • Identifies an additional $200 billion in savings
  • Establishes long-term target for total health care spending, and limits health care cost growth after 2020 to GDP+1%
  • Establishes a public option
  • Ensures that costs of drugs for individuals in both Medicare and Medicaid are no higher than Medicare costs
  • Bans "Pay-for-Delay" patent settlements
  • Requires Medicare to negotiate for lower prescription drug prices
  • Establishes Medicare-administered Part D program
  • Assumes continuation of yearly doc fixes
  • Creates new premium support (voucher) program in 2018, limiting growth to GDP+1%
  • Limits Medicaid growth after 2018, reducing annual growth by 1%
  • Enacts tort reform
  • Increases Medicare premiums from 25% of costs to 35% of costs
  • Increases drug rebates
Other Mandatory
  • Indexes programs to chained CPI
  • Reforms military and civil service retirement
  • Reduces farm subsidies
  • Reduces student loans
  • Various others
  • Cuts farm subsidies in half and eliminates Market Access Program
  • $200 billion stimulus for job creation
  • Uses chained CPI for all inflation-indexed programs
  • Reforms military and civil service retirement
  • Reduces farm subsidies
  • Various others
Tax Expenditures

Option 1 (Zero Plan):

  • Eliminate all tax expenditures as starting point 

Option 2 (Wyden-Gregg Style):

  • Eliminate some tax expenditures (some business tax expenditures, S&L deduction, cafeteria plans, others); limit others (mortgage deduction, charitable deductions, health exclusion, others)
  • Triple standard deduction
  • Permanently extend R&D tax credit

Option 3 (Trigger):

  • Enact tax reform by 2012 or impose gradually growing across-the-board haircut for certain tax expenditures
  • Replaces corporate interest deduction with a 25% credit
  • Closes active financing tax deferral for financial firms
  • Repeals tax subsidy for corporate mergers and acquisitions
  • Closes dividend loophole for foreign source income
  • Eliminates the deduction for business meals and entertainment expenses
  • Eliminates most tax expenditures, including phasing out the employer health exclusion
  • Restructures tax benefits for low-income families with an earnings credit equal to 21.3% of first $20,300 of earnings.
  • Restructures tax benefits for families with children with universal $1,600 credit per child 
Tax Reform
  • Assumes 2001/2003 tax cuts under $250,000 extended
  • Indexes all of tax code to chained CPI
  • Increases gas tax by $0.15 starting in 2013
  • Eliminates AMT, Pease, PEP

Option 1 (Zero Plan):

  • Lowers individual and corporate income tax rates to 8%, 14%, and 23% (26% corporate) and increases rates if any tax expenditures are added back
  • Taxes capital gains and dividends as normal income

Option 2 (Wyden-Gregg Style):

  • Lowers income tax rates to 15%, 25%, 35%, and 26% (corporate)
  • Moves to a territorial tax system

Option 3 (Trigger):es

  • Enacts tax reform by 2012 or imposes gradually growing across-the-board haircut for certain tax expenditures
  • Assumes 2001/2003 tax cuts under $250,000 extended
  • Taxes capital gains and dividends as ordinary income
  • Reforms estate tax with a progressive schedule of marginal rates
  • Cap and trade with 50% rebated
  • Auctions off SO2 permits
  • Limits royalty relief for offshore oil and gas production
  • Auctions radio spectrum licenses
  • Assumes 2001/2003 tax cuts under $250,000 extended
  • Introduces a 6.5% “Debt Reduction Sales Tax” or VAT
  • Indexes all of tax code to the chained CPI
  • Imposes taxes on alcoholic and sweetened beverages

Reforms the income tax structure:

  • Eliminates AMT, PEP, and Pease
  • Consolidates 6 Individual Rates into 2 of 15% and 27% (27% for corporations)
  • Taxes capital gains and dividends as ordinary income
Budget Process
  • Institutes fiscal goals of primary balance by 2015 and debt stabilization thereafter
  • Relies on discretionary caps, with enforcement mechanisms
  • Caps revenues at 21% of GDP
  • Creates annual review to determine if budget on sustainable path; if not, requires lawmakers to fill gap
  • Budgets for disaster funds; tougher limits and transparency for emergencies
  • Moves to biennial budgeting
  • Creates supermajority enforcement for spending and revenues
  • Weak economy would suspend process
  • Institutes fiscal goal of primary budget balance by 2015
  • Relies on discretionary caps
  • Moves to biennial budgeting
  • Enacts explicit long-term budgets for entitlement programs
  • (From updated version of D-R plan from Peterson Foundation Solution's Initiative) Creates new process of SAVEGO if lawmakers cannot agree to a comprehensive plan, mandating annual savings in different budget categories
Fiscal Metrics 2020*
Spending 22.0% - 23.0%
Revenue 20.5% - 21.5%
Debt 65% - 60%
Long-Term Debt 43%
(2035) 
- 52%
(2040) 

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Americans for Tax Reform
November 17, 2010
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Our Fiscal Security (EPI, Demos, and Century Foundation)
November 29, 2010
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Citizens' Commission on Jobs, Deficits, and America's Economic Future
November 30, 2010
Defense
  • Rolls back and caps at 2008 levels with no growth rate
  • Illustrative options taken from Sustainable Defense Task Force proposal
  • Reduces strategic weapons
  • Draws down overseas contingency operations
  • Reduces procurement and R&D
  • Enacts Sustainable Defense Task Force (established by Rep. Barney Frank, Rep. Walter Jones, Rep. Ron Paul, and Sen. Ron Wyden) recommendations for defense savings
Domestic Discretionary
  • Rolls back and caps at 2008 levels with no growth rate
  • Increases early childhood care and education, infrastructure, and fundamental R&D by $2.5 trillion over the next decade
  • Implements a $1 trillion two-year investment program to create jobs (prevents state and local layoffs, etc.)
  • Increases infrastructure and general investment spending
  • Eliminates and reduces various programs
  • Reduce improper payments
Social Security
  • No changes in short-term

Long term: (Paul Ryan’s Plan)

  • Slows benefit growth for high and medium-income workers
  • Indexes normal retirement age to longevity until it reaches 70
  • Creates optional personal accounts of 2% for the first $10,000 and 1% of income between that and payroll tax cap, eventually increasing to 8 percent up to the inflation-adjusted level, and 4 percent of payroll above that, for those under 55
  • Uses general revenue to replenish trust funds
  • Creates new minimum benefit
  • Eliminates tax cap on employer side, raises to 90% on employee side
  • Does not make specific recommendations, but suggests:
    • Increasing payroll tax to cover 100% of wages
    • Dedicating revenue to trust fund from estate taxes, taxing stock transfers, or a bank speculation tax
    • Giving trust tund more investment flexibility
Health Care
  • Repeals health care reform legislation
  • Rolls back Medicaid to 2008 levels, freeze, then gives as block grants to the states
  • No changes to Medicare in short-term

Long term: (Paul Ryan’s 2010 Plan)

  • Allows interstate purchasing, small business pools, and state based exchanges
  • Enacts tort reform
  • If 45% or more of Medicare funding is from general revenues, a 1% reduction in provider payments applies, starting in 2020
  • Increases Medicare cost sharing
  • Improves accountable care organizations
  • Bundles Medicare payments to providers
  • Creates incentives to increase patient safety in hospitals
  • Implements comparative effectiveness research
  • Strengthens and increases use of IP AB
  • Uses more health information technology
  • Establishes a public option
  • Increases federal medical assistance
  • Enacts a public option
  • Enacts a Medicare Part D public option
  • Allows HHS to negotiate prices for prescription drugs
  • Implements cost containment studies
  • “Medicare for All” if cost containment goals not met
  • Consider reducing Medicare eligibility age to 55 if certain cost containment measures for private spending not met
Other Mandatory
  • Rolls back to 2008 levels, freezes, and then gives as block grants to the states
  • Increases food stamps
  • Extends unemployment insurance
  • Reduces farm subsides
  • Sells excess government property
Tax Expenditures
  • Reforms corporate tax expenditures in a revenue-neutral way to broaden the tax base and lower rates
  • Simplifies some individual tax expenditures in a revenue-neutral way, including simplification of child tax benefits, retirement savings, and education tax expenditures
  • Taxes capital gains and dividends as ordinary income and expands charitable giving credit
  • Caps the benefit on itemized deductions at 15%
  • Permanently expands EITC
  • Makes Child Tax Credit fully refundable
  • Permanently extends Making Work Pay tax credit
  • Various others
  • Caps itemized deductions at 15% and expands charitable giving
  • Repeals tax subsidy for mergers and acquisitions
  • Expands the EITC
  • Makes the child tax credit fully refundable
  • Permanently extends the Making Work Pay tax credit
Tax Reform
  • Assumes all 2001/2003 tax cuts extended
  • Eliminates estate tax
  • Permanently patches AMT
  • Repeals 2009 Tobacco Tax
  • Repeals new taxes from health care reform legislation
  • Revenue neutral corporate tax reform, with goal of a 15% corporate tax rate
  • Revenue neutral personal income tax reform
  • Assumes 2001/2003 tax cuts under $250,000 extended
  • Reforms estate tax with a progressive schedule of marginal rates
  • Enacts cap and trade with 50% rebated
  • Decreases tax gap
  • Enacts a financial crisis responsibility tax
  • Enacts a financial speculation tax
  • Enacts a surtax on high-earners
  • Various others
  • Assumes 2001/2003/2010 tax cuts under $250,000 extended
  • Taxes capital gains and dividends as normal income
  • Reforms estate tax with a progressive schedule of marginal rates
  • Surtax on high-earners
  • Enacts a financial speculation tax
  • Enacts a cap and trade or carbon tax
  • Increases the gas tax
  • Calls for additional revenues from corporate income and dividends
Budget Process
  • Relies on discretionary caps
  • Stabilizes debt-GDP at 90% over the long-term
  • Applies “progressive PAYGO” to revenue and mandatory spending, but excludes mandatory education programs
  • Enacts cap and creates annual review process for tax expenditures
Fiscal Metrics 2020*
Spending 18.0% 25.0% -
Revenue 18.0% 21.5% -
Debt - 83% -
Long-Term Debt - 90%
(2035) 
70%

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Andy Stern's Plan
December 1, 2010
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Center For American Progress 50/50 Plan
December 6, 2010
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Republican Study Committee
March 27, 2012
Defense
  • Implements modified (less strict) version of Bowles-Simpson caps on defense
  • Implements all of the Sustainable Defense Task Force recommendations
  • Implements Sen. Coburn audit requirements in 2015 so that future spending is frozen at 2015 levels
  • Cuts overhead
  • Cuts military personnel stationed in Europe and Asia
  • Various weapons cuts
  • Reforms military pay and TRICARE
  • Adheres to the discretionary spending caps and sequester in the Budget Control Act for FY 2013
  • Freezes discretionary spending at 2013 levels through 2017
Domestic Discretionary
  • Implements modified (less strict) version of Bowles-Simpson caps on non-defense
  • Creates “Invest in America Trust Fund” to invest in infrastructure, smart grid, education, broadband, etc.
  • Moves the Transportation Trust Fund to mandatory
  • Budgets for disasters
  • Cuts energy supply programs
  • Cuts international security assistance
  • Cuts federal highway assistance
  • Cuts immigration and customs enforcement
  • Cuts Federal Aviation Administration
  • Cuts NIH funding
  • Cuts international development and humanitarian assistance
  • Cuts customs and border protection
  • Cuts NASA
  • Various others
  • Adheres to the discretionary spending caps and sequester in the Budget Control Act for FY 2013
  • Freezes discretionary spending at 2013 levels through 2017
Social Security
  • Increases tax cap on employer and employee side to cover 90% of wages (eliminates employer tax cap after 2030)
  • Includes new state and local workers in 2020
  • Progressive price indexing with bend point at $150,000 of 5%
  • Creates new minimum and old-age benefits
  • Indexes COLAs to chained CPI
  • Treats all salary reduction plans like 401(k)s
  • Allows for more flexible investing of up to 15% of the trust fund
  • Creates flexible retirement age
  • Creates mandatory add-on accounts
  • Removes cap on employer side of Social Security
  • Indexess COLAs to chained CPI
  • Gradually increases normal retirement age to 70
Health Care
  • Requires payment for any “doc fixes”
  • Holds health care spending beyond 2020 to GDP+1% per beneficiary

Considers various other options to improve and restructure current system, including:

  • Implementation of payment reform, prevention, chronic disease from health reform experiments
  • Public option
  • Requires Medicare to negotiate for lower prescription drug prices
  • Increases revenue or means test Medicare
  • “Medicare for All” with national budgeting
  • Repeals health care reform legislation
  • Transforms Medicare into a premium support program
  • Block grants Medicaid and freezes federal funding at 2012 levels
  • Gradually raises Medicare eligibility age to 67
Other Mandatory
  • Uses chained CPI for all inflation-indexed programs
  • Reforms military and civil service retirement
  • Uses chained CPI for all inflation-indexed programs
  • Reforms farm subsidies
  • Cuts veteran’s disability compensation
  • Cuts Universal Service Fund
  • Reduces other mandatory spending by $1.9 trillion by 2021
  • Reduces funding for Pell grants, food stamps, TANF, SSI, farm subsidies
  • Reforms unemployment compensation, federal retirement
  • Uses chained CPI for all inflation-indexed programs
  • Reduces farm subsidies
  • Privatizes Fannie Mae and Freddie Mac
  • Limits overall means-tested welfare spending to 2007 levels plus inflation growth
  • Various others
Tax Expenditures

Option 1:

  • Fiscal Commission Zero Plan, keeping EITC and child tax credit

Option 2:

  • Wyden-Gregg style reform

Option 3:

  • Caps deductions at 15%, tax capital gains and dividends as normal income with a $1,000 exemption
  • Permanently extends Making Work Pay, recent EITC, and Child Tax Credit parameters

Eliminates:

  • Deduction for business meals and entertainment
  • Exemption of credit union income
  • Capitals gains treatment of certain income from sales of agricultural items
  • Special Blue Cross/Blue Shield deduction
  • Exception from passive loss rules for $25,000 of rental loss
  • Various others

Reduces:

  • Exclusion of interest on life insurance savings
  • Exclusion of interest on private purpose bonds
Tax Reform

Option 1:

  • Fiscal Commission Zero Plan, consolidating and reducing 6 rates down to 3

Option 2:

  • Wyden-Gregg style reform

Option 3:

  • Payroll tax holiday (similar to Domenici-Rivlin plan)
  • Increases gas tax by $0.15 starting in 2013
  • Extends 2001/2003 Tax Cuts under $250,000

Option 4:

  • Moves to a hybrid consumption tax system with rebates for low-income

Options to fund “Invest in America Trust Fund”:

  • Short-term financial stock transfer fee
  • Taxes on internet gaming
  • New tax bracket on income over $1 million
  • Closes tax gap
  • Assumes 2001/2003 tax cuts under $250,000 extended
  • Enacts 2% surtax on income $1,000,000-$10,000,000
  • Enacts 5% surtax on income $10,000,000 and above
  • Enacts $5 per barrel tax on foreign imported oil
  • Assumes 2001/ 2003/2010 tax cuts are made permanent
  • Creates optional tax system with two tax brackets, generous standard deductions and dependent exemptions, and no other tax preferences
  • Eliminates AMT
  • Reduces corporate tax rate to 25% and moves to a territorial system
  • Repeals all taxes from health care reform legislation
  • Indexes capital gains basis for inflation
  • Eliminates estate tax
  • Enacts temporary repatriation holiday
Budget Process
  • Relies on discretionary caps
  • Other budget process reforms in Fiscal Commission plan:
    • Recommends biennial budgeting
    • Tighter rules for Overseas Contingency Operations
  • Caps advance appropriations
  • Defines emergency spending
  • Requires 2/3 majority to waive Budget Act points of order
  • Bans earmarks
  • Strengthens CUTGO
  • Establishes point of order against unauthorized spending
  • Relies on, and creates new, discretionary spending caps
Fiscal Metrics 2020*
Spending - - 18.1%
Revenue - - 18.5%
Debt 65% - 58%
Long-Term Debt - - -

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Sen. Rand Paul's Budget
March 17, 2011
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CATO's Downsizing Government Plan
April 1, 2011
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Congressional Black Caucus
March 27, 2012
Defense
  • Funds defense at President’s FY 2012 request for two years, then eliminates funding for wars
  • Reduces waste, fraud, and abuse
  • Draws down troops overseas
  • Assumes troop levels in Iraq and Afghanistan fall to 45,000 by 2015
  • Enacts Preble/Friedman reforms: numerous acquisition reductions, RDT&E reductions, reforming military pay and health care, overhead savings, reduce the size of the Army, Marines, and nuclear arsenal
  • Funds defense at President’s request
  • Reduces funding for Ballistic Missile Defense program, uses savings to implement further reforms
Domestic Discretionary
  • Freezes discretionary spending at 2008 levels, limits growth to inflation thereafter
  • Eliminates Departments of Commerce, Energy, Education, and Housing and Urban Development, and several sub-agencies
     
  • Eliminates Department of Housing and Education
  • Cuts state and local grant cuts in many departments
  • Eliminates SBA, CPB, Job Corps, among others
  • Reduces federal civilian compensation by 10%
  • Reduces foreign aid and NASA funding by 50%
  • Eliminates energy subsidies
  • Eliminates rail subsidies
  • Various others
  • Makes additional investments above President’s budget in transportation, education, and job training
  • Repeals automatic trigger, which would cut $294 billion from non-defense programs through 2021
Social Security
  • Requests committees of proper jurisdiction to reform program to achieve 75 year solvency
  • Price indexes initial benefits
  • Increases retirement age two months after 2010 until it reaches 70 for those born after 1971 increasing one month every other year after that
  • Reduces disability program by 10%
Health Care
  • Block grants Medicaid and SCHIP
  • Requests committees of proper jurisdiction to reform Medicare to achieve 75-year solvency
  • Reduces other health spending
  • Repeals health care reform legislation
  • Assumes yearly doc fixes
  • Block grants and freezes Medicaid spending
  • Reduces Medicare payment error rate by 50%
  • Enacts tort reform
  • Increases Medicare premiums
  • Increases Medicare deductibles
  • Reduces non-Medicaid state and local grants by 50%
  • Enacts a public option based on Medicare’s current reimbursement rates plus 5%
Other Mandatory
  • Block grants food stamps and the child nutrition program
  • Reduces food stamp
  • Eliminates farm subsidies
  • Reforms federal retirement benefits
  • Reduces student loans
  • Increases funding for income security programs
Tax Expenditures
  • Cuts EITC by 50%
  • Eliminates refundable portion of Child Tax Credit
  • Taxes US companies' foreign income as it is earned
  • Replaces corporate interest expense deduction with a smaller credit
  • Denies mortgage interest deduction for vacation homes and yachts
  • Repeals volumetric ethanol excise tax credit (VEETC)
Tax Reform
  • Makes 2001/ 2003/ 2010 tax cuts permanent
  • Patches AMT
  • Repeals all taxes from health care reform legislation
  • Assumes all 2001/2003 tax cuts and AMT extended
  • Eliminates tax increases in the health care reform legislation
  • Assumes 2001/2003/2010 tax cuts under $250,000 extended (and, presumably, patches AMT)
  • Institutes 5.4% millionaires surtax
  • Taxes capital gains and dividends as ordinary income
  • Institutes financial speculation tax
  • Reduces tax gap through better enforcement
Budget Process
  • Adds balanced budget amendment to Constitution
  • Rescinds unspent and unobligated discretionary balances after 36 months
     
Fiscal Metrics 2020*
Spending - 18.0% 22.3%
Revenue - 18.0% 21.7%
Debt - 64% 62%
Long-Term Debt - - -

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Rep. Chris Van Hollen's Budget
April 13, 2011
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Congressional Progressive Caucus
March 26, 2012
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CBO Current Law Projections
April 15, 2011
Defense
  • Calls for $308 billion less in savings compared to President’s request
  • Provides no funding for overseas contingency operations past 2014
  • Reduces strategic capabilities, conventional forces, and R&D
  • Ends funding for overseas contingency operations after FY 2013
  • Defense and war spending grow with inflation, as projected by CBO
Domestic Discretionary
  • Freezes non-security funding for five years
  • Supports four program integrity initiatives
     
  • Repeals sequester and discretionary spending caps for domestic discretionary spending
  • Invests additional $1.56 trillion in domestic programs
  • Discretionary spending projected to grow with inflation, as projected by CBO
Social Security
  • No changes, but “rejects any proposals for privatization”
  • Eliminates payroll tax cap for both employees and employers
  • Credits benefits based on higher contributions on employee side
  • Encourages Congress to look at ways to increase Social Security benefits, or to switch to the CPI-E for cost-of-living adjustments
  • Grows as projected by CBO due to population continuing to age
Health Care
  • Calls for fully offset yearly doc fixes
  • Enacts a public option
  • Negotiates prescription drug payments with pharmaceutical companies
  • Adopts CMS program integrity and other Medicare and Medicaid savings in the President’s budget
  • Assumes yearly doc fixes
  • Grows as projected by CBO due to population continuing to age and health care cost growth
Other Mandatory
  • Strengthens funding for Pell grants and food stamps
  • Reduces farm subsidies
  • Creates an infrastructure bank
     
  • Increases funding for income security programs
  • Creates an infrastructure bank
  • Reduces farm subsidies
  • Grows as projected by CBO
Tax Expenditures
  • Makes R&D credit permanent
  • Encourages Ways and Means Committee to consider Fiscal Commission’s recommendations on reducing tax expenditures
  • Replaces tax exclusions for interest on state and local bonds with a subsidy for the issuer
  • Eliminates special credits and rules for oil, gas, and coal companies
  • Limits the rate at which itemized deductions can reduce tax liability to 28% for high earners
  • Makes permanent R&E tax credit
  • Provides numerous credits for manufacturers and clean energy producers
  • Currently total over $1 trillion annually, and grow as projected by CBO
Tax Reform
  • Assumes 2001/2003/2010 tax cuts under $250,000 extended
  • Patches AMT
  • Endorses magnitude (but not specifics) of revenue savings proposed in President’s FY 2012 budget
  • Encourages Ways and Means Committee to consider corporate tax reform proposals
  • Allows upper-income 2001/2003/2010 tax cuts to expire, and allows for other parts of the tax cuts to expire after 2015 (but extends marriage relief, credits, and incentives for children, families, and education)
  • Patches AMT
  • Calls for additional upper-income tax brackets
  • Taxes capital gains and dividends as ordinary income
  • Institutes progressive estate tax
  • Enacts a carbon tax
  • Taxes U.S. corporate foreign income as it is earned
  • Enacts a financial crisis responsibility fee
  • Enacts a financial speculation tax (derivatives, foreign exchange)
  • Enacts a wealth tax
  • Reinstates Superfund taxes
  • Federal revenues grow as projected by CBO
Budget Process
  • Repeals discretionary spending caps and sequester
Fiscal Metrics 2020*
Spending - 22.9% 24.0%
Revenue - 22.5% 20.5%
Debt - 66% 76%
Long-Term Debt - - 96%
(2035) 

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CRFB Realistic Projections
April 15, 2011
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Rep. Mike Quigley's Budget
May 2, 2011
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Sen. Pat Toomey's Budget
April 18, 2012
Defense
  • Base defense spending grows with inflation, as projected by CBO
  • War spending declines to reflect troop levels of 45,000 in overseas operations by 2015
  • Reduces troop levels in Iraq, Afghanistan, Europe, and Asia
  • Cuts unneeded weapons systems
  • Reduces Navy fleet
  • Reduces nuclear arsenal
  • Cuts 10% of commercial activities
  • Reduces R&D costs
  • Considers reforms to DoD health care
  • Assumes a full withdrawal of troops from Iraq and Afghanistan by 2015
  • Repeals sequester for defense spending
Domestic Discretionary
  • Discretionary spending projected to grow with inflation, as projected by CBO, and also incorporating lower discretionary spending from FY 2011 spending deal (CBO estimate)
  • Suggests reforming spending programs to reduce waste, fraud, and abuse
  • Cuts non-defense spending to FY 2006 levels in 2013, freezes through 2020, then limits growth to inflation
Social Security
  • Grows as projected by CBO due to population continuing to age
  • Increases payroll tax to cover 90% of wages
  • Indexes COLAs to chained CPI
  • Includes newly hired state and local government workers
  • Closes payroll tax gap
  • Increase normal retirement age to 68
  • Makes benefit formula more progressive
  • Creates new minimum benefit
Health Care
  • Grows as projected by CBO due to population continuing to age and health care cost growth, in addtion to lawmakers continuing to waive scheduled cuts to Medicare payments to physicians ("doc fix")
  • Strengthens IPAB
  • Adopts delivery system reforms, or “pay for quality”
  • Reduces drug costs
  • Recoups incorrect Medicare payments, waste, fraud, and abuse
  • Increases Part D drug rebates
  • Other reforms to lower costs
  • Enacts permanent doc fix
  • Repeals health care reform legislation
  • Transforms Medicare to premium-support program in 2023 and limits per beneficiary growth of premium support to GDP+0.5%
  • Block grants Medicaid, freezes it at 2012 levels through 2017, then limits growth to inflation
  • Enacts tort reform
  • Means tests Medicare premiums
Other Mandatory
  • Grows as projected by CBO
  • Reduces farm subsidies
  • Reforms civil service retirement
  • Sells excess government property
  • Block grants and reduces spending on many income security programs to $30 above 2007 levels by 2020
  • Reduces other mandatory spending by $300 billion over ten years
Tax Expenditures
  • Grow as projected by CBO, in addition to higher costs of refundable credits from extension of the 2001/2003/2010 tax cuts
  • Caps itemized deductions at 28%
  • Eliminates various fossil fuel and ethanol subsidies
  • Eliminates subsidies for private-activity bonds
  • Eliminates MID for vacation homes
  • Cut exclusion for income earned abroad
  • Tax employer-provided life insurance
  • Various others
  • Calls for revenue neutral tax reform that reduces tax expenditures, possibly through a cap on tax benefits
Tax Reform
  • 2001/2003/2010 tax cuts are fully extended after 2012
  • AMT patches continue
  • Estate tax extended at parameters from 2010 tax cut deal
  • Implements President Obama’s proposed international tax reforms
  • Calls for using some savings from cutting tax expenditures to lower individual and corporate tax rates
  • Extends 2001/2003/2010 tax cuts
  • Enacts revenue neutral tax reform that cuts marginal tax rates across the board by 20 percent
  • Reduces corporate tax rate from 35% to 25%
  • Moves to a territorial tax system
  • Pays for corporate tax changes with base broadening (unspecified)
Budget Process
  • Institutes a debt-to-GDP cap that would automatically cut spending and tax expenditures if targets not met
  • Relies on discretionary and mandatory caps
Fiscal Metrics 2020*
Spending 22.9% - 18.3%
Revenue 18.6% - 18.3%
Debt 82% - 61%
Long-Term Debt 150%
(2035) 
- -

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Heritage Foundation
May 25, 2011
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American Enterprise Institute
May 25, 2011
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Center for American Progress
May 25, 2011
Defense
  • Assumes phase-down from wars will permit defense spending of 4% of GDP
  • Assumes future military personnel brought under broader proposals for health and retirement reform in the plan
  • Holds defense spending at 4% of GDP
  • Limits security spending to $700 billion in 2016. and limits growth to inflation+1%
  • Cuts unneeded weapons systems
Domestic Discretionary
  • Freezes non-defense spending at 2008 levels through 2015, and limits growth to inflation
  • Transforms federal highway program into state-run program
  • Reduces K-12 education spending to 2000 levels (inflation adjusted)
  • Various others
  • Cuts in community and regional development programs, energy and agriculture spending, and various others
  • Reduces federal employee compensation
  • Caps non-security discretionary spending
  • Increases discretionary spending in education, energy, infrastructure, and anti-poverty programs
Social Security
  • Gradually transforms outlays into a flat benefit for those who have worked over 35 years
    • Reduce benefits levels for modest-income earners and eliminate benefits for top earners
  • Reduce benefits levels for modest-income earners and eliminate benefits for top earners
  • Increases normal and early retirement ages and indexes them to longevity
  • Eliminates payroll tax, and replaces with flat tax
  • Creates add-on accounts up to 6% of a worker’s income
  • Changes benefit structure to flat monthly $850 benefit and indexes it to wage growth
  • Increases early retirement age to 65
  • Creates mandatory add-on accounts
  • Eliminates payroll taxes for workers aged 62 and older
  • Reduces initial benefits for higher earners
  • Increases benefits for lower earners and the very old
  • Eliminates payroll tax cap on employer side
Health Care
  • Repeals health care reform legislation
  • Enacts permanent doc fix
  • Transforms Medicare into premium-support program after 5 years, and limits growth to inflation
  • Block grants Medicaid in 2014 at 2007 levels, and limits growth to medical inflation
  • Increases Medicare eligibility age to 68 in 10 years and indexes it to longevity
  • Repeals health care reform law
  • Transforms Medicare into premium support program
  • Block grants Medicaid, and limits spending growth to GDP
  • Increases Medicare retirement age to 67
  • Enacts tort reform
  • Enacts a public option
  • Expands IPAB authority to include all Medicare providers
  • Makes other payment reforms
Other Mandatory
  • Reduces anti-poverty spending to 2007 levels (inflation adjusted), and limits growth to inflation
  • Reduces farm subsidies
  • Reforms student grants into loans
  • Sells excess government property
  • Reduces farms subsidies
  • Reforms federal civilian retirement
  • Reduces farm subsidies
  • Increases anti-poverty spending
Tax Expenditures
  • Eliminates health care exclusion, and replaces with new health tax credit that phases out for higher-earners
  • Institutes after-tax option for savings accounts
  • Gets rid of all other individual tax expenditures except for a higher education deduction, charitable donations, mortgage interest deduction, and EITC
  • Eliminates most corporate tax expenditures, but retains an R&D credit and investment deduction
  • Eliminates most individual and corporate tax expenditures
  • Retains and modifies some, including the mortgage interest deduction, charitable giving, and others for families and work
  • Eliminated refundable portion of child credit
  • Modifies R&D credit
  • Eliminates most individual and corporate tax expenditures, and replaces deductions and exemptions with credits
  • Extends R&D credit
Tax Reform
  • Replaces current tax system with single tax rate between 25% and 28% for both individual and corporate taxes
  • Eliminates the estate tax
  • Eliminates taxes on Social Security benefits and premium-support benefits
  • Repeals nearly all excise taxes
  • Transforms individual and corporate tax structure to a progressive consumption tax
  • Enacts a carbon tax
  • Repeals estate and gift taxes
  • Lowers low and moderate-income tax rates
  • Creates temporary millionaire surcharge
  • Enacts carbon tax
  • Increases gas tax
  • Enacts financial transactions tax, and one for large financial institutions
  • Modifies estate tax
  • Reinstates superfund tax
  • Increases other taxes, including on alcohol, cigarettes, and internet gaming
Budget Process
  • Caps total spending at 18.5% of GDP in 2021 and beyond
  • Relies on discretionary caps
  • Establishes additional dynamic scoring and longer-term cost estimates of policies
  • Relies on discretionary caps
Fiscal Metrics 2020*
Spending 18.0% 21.0% 24.0%
Revenue 18.5% 19.5% 22.5%
Debt 58% 63% 70%
Long-Term Debt 30%
(2035) 
60%
(2035) 
42%
(2035) 

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Roosevelt Institute Campus Network
May 25, 2011
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Economic Policy Institute
May 25, 2011
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Sen. Kent Conrad's Budget
July 11, 2011
Defense
  • Reduces troop levels in Iraq, Afghanistan, Europe, and Asia
  • Cuts unneeded weapons systems
  • Reduces strategic nuclear arsenal
  • Increases cyber security and R&D
  • Calls for defense savings equal to Sustainable Defense Task Force over ten years ($960 billion)
  • Limits spending growth after 2021 to inflation
  • Calls for security savings equal to the Fiscal Commission (caps 2012 spending at 2011 levels, returns to 2008 levels in 2013, then limits growth to half the rate of inflation)
Domestic Discretionary
  • Increases discretionary spending in education, energy, infrastructure, foreign aid, anti-poverty programs, and various others
  • Increases discretionary spending in education, energy, and infrastructure
  • Freezes lawmakers’ pay for three years
  • Freezes congressional and White House budgets for three years
  • Reduces printing, federal travel, and vehicle costs
  • Reduces number of contractors
  • Various others
Social Security
  • Increases payroll tax cap to cover 90% of wages, and creates 4% tax on wages above the cap
  • Reinstates student survivor benefit
  • Increases payroll tax cap on employee side to cover 90 percent of wages, and eliminates maximum on employer side
  • Full details not yet available
Health Care
  • Enacts a public option
  • Funds effectiveness research to reform delivery system
  • Enacts tort reform
  • Enacts a public option
  • Funds technology and effectiveness research to reform delivery system
  • Increases drug rebates
  • Reduces waste, fraud, and abuse
  • Makes other payment reforms
  • Full details not yet available
Other Mandatory
  • Reduces farm subsidies
  • Increases anti-poverty spending
  • Reduces farm subsidies
  • Full details not yet available
Tax Expenditures
  • Eliminates mortgage interest deduction
  • Reduces all other individual tax expenditures by half
  • Eliminates many corporate tax expenditures
  • Converts charitable giving and mortgage interest deductions into credits
  • Caps remaining deductions and exclusions
  • Extends and expands many refundable credits
  • Extends R&D credit
  • Eliminates or reduces many individual and corporate tax expenditures, saving $2 trillion over ten years (full details not yet available)
Tax Reform
  • Links individual tax rate structure to share of national income, reducing rates for all but high-income earners
  • Reduces all 3 corporate rates by 3 percentage points
  • Enacts a carbon tax
  • Repeals gas tax
  • Enacts financial transactions tax, and one for systemically risky financial institutions
  • Extends 2001/2003 tax cuts under $250,000
  • Creates millionaire surcharge
  • Limits preference for capital gains
  • Enacts carbon tax
  • Increases gas tax
  • Enacts financial transactions tax, and one for large financial institutions
  • Restores estate tax to pre-2001 levels
  • Enacts tax on sweetened beverages
  • Extends 2001/2003 tax cuts for people making under $500,000/$1,000,000
  • Patches AMT
  • Restores estate tax to 2009 levels
  • Taxes capital gains and dividends at 20%
  • Lowers corporate tax rate to 29%
Budget Process
Fiscal Metrics 2020*
Spending 23.5% 24.5% 22.0%
Revenue 21.5% 21.5% 20.7%
Debt 70% 77% 68%
Long-Term Debt 64%
(2035) 
82%
(2035) 
-

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Sen. Tom Coburn's Budget
July 18, 2011
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Comeback America Initiative's Plan
July 20, 2011
Defense
  • Reduces total defense spending by $1 trillion
  • Reforms TRICARE premiums, cost-sharing, and other expenses
  • Cuts unneeded weapons systems and other procurement
  • Consolidates and closes military grocery and retail stores and elementary schools
  • Reverses ‘Grow the Army Initiative’ and reduces personnel in Europe and Asia
  • Adopts Sec. Gates’s efficiency recommendations
  • Freezes DoD civilian pay and reduces size of workforce
  • Cuts R&D spending
  • Various others
  • Cuts total discretionary spending to 2008 levels by 2013
  • Adopts President Obama’s proposed defense reductions
  • Requires DoD to consider costs when determining requirements
  • Reduces bureaucracy costs by 25 percent
  • Reduces troop levels in Afghanistan and Iraq to 45,000 by 2015
  • Reduces overseas bases
  • Reduces number of carrier groups
  • Implements acquisition reforms
  • Restructures benefits for non-active duty National Guard and Reserves
Domestic Discretionary
  • Freezes pay for federal employees for three years
  • Reduce federal and contractor workforce by 15 percent
  • Reduces federal printing and vehicle costs
  • Eliminates federal education loan programs, scales back Pell grants, and consolidates ESEA programs
  • Eliminates many energy programs
  • Eliminates or reduces numerous discretionary health programs
  • Consolidates many agencies
  • Various other reductions
  • Cuts total discretionary spending to 2008 levels by 2013
  • Encourages research investments
Social Security
  • Constrains benefit growth for high earners
  • Indexes retirement age to life expectancy and raises early retirement age to 64
  • Indexes COLAs to chained CPI
  • Reforms spousal benefits
  • Reforms disability insurance program to encourage work and reduce improper payments
  • Reduces benefits for high-income earners
  • Indexes COLAs to more accurate measure of inflation for seniors (unspecified as to which measure)
  • Increases normal and early retirement age to 69 and 64, respectively, and indexes them for life expectancy
  • Increases payroll tax cap to $150,000
  • Eliminates payroll tax for workers above normal retirement age
  • Creates add-on accounts equal to 3% of income
  • Includes newly hired state and local government workers
  • Increases minimum benefit for 35+ years of work, and provides an enhanced old-age benefit
  • Merges OASI and DI trust funds
Health Care
  • Repeals the tax and coverage provisions from health care reform, but keeps most Medicare savings (not IPAB)
  • Block grants Medicaid in 2013 and holds growth to rate of inflation plus population growth
  • Increases Medicare retirement age to 67 and indexes it to life expectancy
  • Increases Medicare premiums for all enrollees
  • Numerous other Medicare changes
  • Enrolls dual-eligibles in managed care
  • Enacts tort reform
  • Repeals the CLASS Act and sunsets the health care reform law by 2020 and replaces it with universal preventative and catastrophic coverage
  • Increases premiums to cover 50 percent of program costs and further means-tests them
  • Requires competitive bidding of prescription drugs for all health programs
  • Increases Medicare cost-sharing
  • Eliminates Medicaid state tax gaming
  • Block grants Medicaid
  • Enacts tort reform
  • Limits health care spending to 35% of total spending
  • Considers premium support approach for some health programs
Other Mandatory
  • Reduces farm subsidies
  • Uses chained CPI for all inflation-indexed programs
  • Reforms and reduces food stamps
  • Reduces other nutrition programs
  • Reforms Supplemental Security Income (SSI) program to simplify the formula and reduce improper payments
  • Switches to chained CPI
  • Increases federal civilian and military pension contributions and health care cost-sharing
  • Reduces farm subsidies
  • Eliminate in-school student loan interest subsidies
  • Reforms PBGC
  • Moves towards an “infrastructure bank concept”
  • Reforms VA programs
  • Sell excess government property and entities
  • Review, eliminate, and/or consolidate redundant and ineffective programs
  • Increases fees for aviation security
  • Various others
Tax Expenditures
  • Reduces mortgage interest deduction
  • Caps benefit from health insurance exclusion
  • Limits the EITC
  • Eliminates many energy tax preferences
  • Reduces many other individual and corporate tax expenditures
  • Eliminates or reduces many tax expenditures (exempts charitable contributions, mortgage interest deduction to an annual limit on one home, and pension and savings contributions to an annual limit)
  • Phases out employer provided health care payroll tax exclusion by 2028
  • Makes R&D tax credit permanent
  • Eliminates energy tax preferences
  • Allows corporations to deduct dividends
  • Consolidates retirement tax preferences
Tax Reform
  • Enacts comprehensive tax reform that holds revenues to current law levels and caps at 21.5%, reducing number of brackets and lowering top rate to maximum of 25%
  • Assumes 2001/2003/2010 tax cuts expire in 2013
  • Enacts 1-year AMT patch
  • Taxes capital gains and dividends as ordinary income
  • Indexes tax parameters to chained CPI
  • Enacts 5% progressive consumption tax
  • Applies a minimum 1% tax to non-profit organizations
  • Retains estate tax with $5 million exemption and 25% rate
  • Implements integrated oil import fee and gas tax
  • Considers financial transactions tax
Budget Process
  • Institutes annual debt-to-GDP targets with failsafes
  • Relies on discretionary caps
  • Enacts PAYGO rules for both spending and taxes
  • Caps revenue at 21.5% of GDP
  • Reforms all spending into discretionary spending, subject to yearly appropriations, except Social Security and interest payments
  • Requires OMB to report on long-term sustainability
Fiscal Metrics 2020*
Spending - 21.8%
Revenue - 20.8%
Debt 53% 63%
Long-Term Debt - 51%
(2035) 

*Spending and revenue estimates rounded to nearest 0.5%. Estimates as reported by each plan or the Congressional Budget Office, except for the Fiscal Commission, the House Republican Budget Resolution, and the President’s Framework which have been re-estimated by CRFB. Fiscal metrics for Heritage, AEI, CAP, Roosevelt, and EPI plans in adition to Senator Coburn's and Senator Conrad's budgets refer to 2021.

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