WASHINGTON—If Congress wanted to end budget deficits by making deep cuts in spending, here are some ways it could do it:
_ Repeal the Medicare prescription-drug benefit. Savings: $300 billion over five years, $700 billion over 10 years.
_ Repeal "earmarks"—dubious pork projects inserted by lawmakers—from the recently passed highway bill. Savings: $24 billion.
_ Cut annual subsidies to farmers. Savings: from $12 billion to $30 billion annually.
_ Shave one-third of 1 percentage point off the annual Cost of Living Adjustment to Social Security benefits. Savings: $93 billion over 10 years.
_ Cut business subsidies. Savings: $138 billion over 10 years.
_ Cancel new Navy destroyer and Littoral Combat Ship programs, and buy frigates instead. Savings: $28.8 billion over 10 years.
_ Raise all tax rates on ordinary income by 1 percentage point. Gain: $78.6 billion over 10 years.
_ Raise all tax rates on ordinary income, plus on the Alternative Minimum Tax, by 1 point. Gain: $113 billion over 10 years.
_ Raise all tax rates on ordinary income, plus on the Alternative Minimum Tax and on dividends and capital gains, by 1 percentage point. Gain: $118.8 billion over 10 years.
These cuts are only a handful from among hundreds of options suggested by the Congressional Budget Office and various think tanks in Washington. They illustrate the kinds of choices possible. If these alone were enacted, they would cut spending by approximately $165 billion a year. The fiscal 2005 budget deficit was $319 billion.
Sources: Congressional Budget Office's Budget Options; the Heritage Foundation; the Brookings Institution.
(c) 2005, Knight Ridder/Tribune Information Services.
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