CRFB President Details Options to Stabilize the Debt

Proposal

Savings in 2018 (Billions)

Defense

$70

• Reduce weapons systems, reduce troop levels, reform procurement policies, reform Tricare
  

Discretionary

$140

• Eliminate outdated programs
• Reduce domestic discretionary spending by 5%, short-term freeze, cap growth

Social Security

$60

• Speed up/increase retirement age to 68 and index for longevity 
• Slow growth of benefits for middle and upper earners          
• Switch to superlative CPI
• Update/reduce spousal benefits                                                       

Heath Care

$120

• Reduce new insurance subsidies
• Increase cost sharing/premiums for Medicare                                    
• Increase retirement age for Medicare
• Reform malpractice policies
• Reduce Medicaid funding to the states
• Introduce a voucher option
• Institute a cap on federal health spending to restrict growth to GDP + population + 1% starting next decade

Other

$60

• Eliminate agriculture subsidies                                           
• Reduce other mandatory spending
• Freeze government salaries for two years, reduce workforce by 5%, reform contracting process

Revenues

$300

• Tax expenditure reform: Gradually eliminate the health care exclusions; phase down the home mortgage deduction from $1 million to $500k; eliminate state and local tax deduction; reduce corporate subsidies and other consolidations/eliminations; cap total amount of tax breaks as a share of income
• Implement a carbon tax
• Only extend the expiring 2001/2003 tax cuts temporarily (2 years at most) with the commitment to only extend permanently once a debt reduction package has been put in place

Sweeteners

- $100

• Corporate income tax rate cut
• Bump up in spending on some of the most productive public investments (education, R&D, infrastructure)

Total Savings

$650