Deficit Reduction Plan Comparison Tool

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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
  • 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%

*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.