CBO Releases 2014 Budget Options
With the national debt at record highs and projected to increase, lawmakers need to find ways to reduce the long-term budget deficit. Fortunately, CBO has just released an updated book of options to do just that in advance of lame duck legislation and the new Congress being sworn in.
The report updates 79 options from last year's report, providing a selection of ways to either increase revenue or decrease spending. Since all of the options are very similar to those presented last year, the report simply updates the budget estimate, so readers will want to look at the previous report for the pros and cons of each option.
With so many options, we have highlighted just a few in each budget category to illustrate the savings options available to consider. See the report for more options.
|Policy Option||10-Year Savings (billions)|
|Change the Cost-Sharing Rules for Medicare and Restrict Medigap Insurance||$111|
|Require Manufacturers to Pay a Rebate for Part D Drugs for Low-Income Beneficiaries||$103|
|Introduce Minimum Out-of-Pocket Requirements Under TRICARE for Life||$28|
|Limit Medical Malpractice Torts||$70|
|Link the Growth of Initial Social Security Benefits to Average Prices Instead of Average Earnings||$87|
|Raise the Full Retirement Age for Social Security to 70 by 2039||$35|
|Eliminate Eligibility for Starting Social Security Disability Benefits at Age 62 or Later||$11|
|Require Social Security Disability Insurance Applicants to Have Worked at Least Four of the Past Six Years||$32|
|Reduce Crop Insurance Subsidies||$20|
|Reduce Subsidies to Fannie Mae and Freddie Mac||$8|
|Eliminate In-School Interest Subsidy for Student Loans||$39|
|Reduce Federal Pensions||$6|
|Replace the Joint Strike Fighter Program With F-16s and F/A-18s||$31|
|Reduce the Number of Ballistic Missile Submarines||$15|
|Eliminate Federal Funding for Community Service Programs||$12|
|Eliminate Subsidies for Amtrak||$14|
|Convert the Mortgage Interest Deduction to a 15 Percent Tax Credit After 2019||$113|
|Eliminate the Deduction for State and Local Taxes||$1,088|
|Limit the Deduction for Charitable Giving to Contributions in Excess of 2 Percent of Income||$213|
|Eliminate the American Opportunity Tax Credit and the Lifetime Learning Credit||$150|
|Increase Excise Taxes on Motor Fuels by 35 Cents and Index for Inflation||$469|
|Increase All Taxes on Alcoholic Beverages to $16 per Proof Gallon||$66|
|Increase the Taxable Maximum for the Social Security Payroll Tax||$672|
|Increase Corporate Income Tax Rates by 1 Percentage Point||$102|
|Apply Chained CPI to the Tax Code Starting in 2014||$150|
|Apply Chained CPI to Social Security Starting in 2015||$116|
|Apply Chained CPI to Other Mandatory Spending Programs Starting in 2015||$65|
Click here to see all of the options.