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February 09, 2023 at 02:12 PM
The State of the Union address is over, the Biden administration is developing its budget proposal for 2024, and policymakers are looking for ways to pay for new tax breaks and programs.
Under congressional rules, members of Congress can make up for the cost of their proposals by cutting other federal spending or by increasing federal revenue.
One place lawmakers can look to come up with the cash is the lists of options for reducing the federal budget deficit that the Congressional Budget Office issues periodically. The CBO classifies changes that could save $300 billion or more over 10 years as larger reductions and changes that would likely save less as smaller reductions.
What It Means
There is no guarantee that any suggestion on the CBO list will be enacted, but it is a place to look for tax and program changes that could suddenly show up.
The list could give advisors ideas about how to future-proof clients’ planning, and about what kinds of responses to consider if some of the suggestions do take effect.
The Federal Budget
The U.S. government lost $1.4 trillion in 2022 on $4.6 trillion in revenue.
It’s on track to record $14 trillion in deficits from 2023 through 2032.
The List
For a list of some items on the list that look as if they could be politically feasible and could have a substantial, direct effect on clients’ retirement income, estate and health care planning efforts, see the gallery above.
The gallery includes the CBO’s estimates of how much those items could reduce the federal budget deficit over the 10-year period beginning in 2023.
(Image: alphaspirit/Shutterstock)
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