Deficit Reduction Options
Explore meaningful options to reduce the federal deficit and national debt. These options from the Congressional Budget Office (CBO) would have a far greater impact than the DOGE grant cuts.
Your Selected Deficit Reduction Plan
Select options below to build your own deficit reduction plan. See how much you could save in 2025 and over the next decade.
Selected Options:
Sources: Congressional Budget Office and DOGE.gov
Choose Your Own Policy Mix or Select From a Preset Below
These three approaches show that the deficit can be cut dramatically without shifting costs onto vulnerable households or slashing core social programs.
Progressive Tax Reform + Carbon Pricing
Raises revenue almost entirely from high earners, large estates, corporations and CO₂ emissions—without touching safety-net spending.
Policy Details
| Policy | Rationale |
|---|---|
| +2 pp on top four income-tax brackets | Targets highest earners only |
| 2% AGI surtax > $100k/$200k | Spare low-/middle-income households |
| End SALT deduction | Progressive; states can offset if desired |
| Tax unrealized gains at death | Closes a large wealth-building loophole |
| 12.4% payroll tax on earnings > $250k ("donut hole") | Protects < $250,000 wages and Social-Security link |
| Raise corporate rate to 22% | Keeps U.S. rate competitive yet fair |
| $25/ton carbon tax (+5%/yr) | Cuts emissions and funds climate transition |
Health-Care Efficiency & Fair Financing
Trims over-payments and tax distortions in health care rather than cutting care; asks higher-income households and investors to share more of the cost.
Policy Details
| Policy | Rationale |
|---|---|
| Trim Medicare Advantage benchmarks 10% | Eliminates proven over-payments to private plans |
| Raise MA coding-intensity cut to 8% | Same logic, milder than 20% cut |
| Site-neutral payment in all HOPDs | Patients pay less; hospitals already paid once |
| Cut 340B drug mark-ups 22.5% | Keeps discount program but curbs windfall pricing |
| Single 50% match for Medicaid admin costs | Pure efficiency; states already budget admin |
| Apply 3.8% NIIT to active S-corp/partnership income | Closes avoidance loophole above $200k/$250k |
| Cap both income & payroll exclusions for employer plans at median premium | Nudges plans toward value without new taxes on average policies |
Leaner Defense & Subsidy Roll-back + Targeted Excise Taxes
Reduces defense spending on low-value programs, eliminates corporate subsidies, and adds targeted excise taxes that improve public health and infrastructure.
Policy Details
| Policy | Rationale |
|---|---|
| Reduce DoD budget $1T (force-structure changes) | Largest savings with limited domestic fallout |
| Scale back crop-insurance subsidies | Mainly benefits large agribusiness |
| Cancel next Ford carrier & LRSO missile | Frees R&D/shipbuilding $$; allies provide redundancy |
| +15¢ gasoline/diesel tax indexed | User-fee principle; funds highways & cuts CO₂ |
| Standardize alcohol tax & index to inflation | Public-health co-benefit |
| +50% tobacco tax | Ditto—health & budget |
| End LIFO & LCM inventory accounting | Removes subsidy favoring large firms |
| Tax all foreign income of U.S. corps | Levels playing field; curbs profit-shifting |
| 0.01% financial-transaction tax | Small fee on high-frequency trading; exempts retirement |
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