CBO Report Discusses More Than 100 Options For Cutting Federal Spending And Revenues

On March 11, the Congressional Budget Office (CBO) issued a report that discusses more than 100 options for cutting federal spending and revenues. (March 2011–Reducing the Deficit: Spending and Revenue Options) According to CBO, “nearly all the options would reduce federal budget deficits.” The title of the new report carries the same name that was used for similar reports from’83–'97. In 2000, during a period of budget surpluses, the title was changed to “Budget Options.” However, the new report “returns to the earlier title because the budgetary context has shifted dramatically since 2000,” CBO said. The report is divided into several sections, including mandatory spending options, discretionary spending options, and revenue options. A detailed discussion of the revenue aspects includes trends in revenue, considerations in setting tax policy, the effects of taxes on economic activity, the tax burden and who bears it, collection costs and complexity, and approaches to increasing revenues. Finally it presents 35 separate options to increase revenues. The options are grouped into the following broad categories according to the part of the tax system they would target: individual income tax rates; the individual income tax base; individual income tax credits; the Social Security tax base; corporate income tax rates; taxation of income from businesses and other entities; taxation of income from worldwide business activity; consumption and excise taxes; health care provisions; and other taxes and fees. The 256-page report is available at http://www.cbo.gov/ftpdocs/120xx/doc12085/03-10-ReducingTheDeficit.pdf.