Lawmakers can use Cuts in Federal Pay and Benefits to Reduce Deficit, CBO Analysis Shows

Lawmakers have various possibilities to reduce the deficit, including cutting pay and benefits for the federal workforce, according to a new analysis from the Congressional Budget Office.

The options that would create the biggest savings include limiting health care benefits to military retirees and their dependents provided through the Defense Department’s TRICARE program and reducing annual across-the-board salary adjustments for defense and nondefense civilian employees, CBO wrote. CBO estimates that these options would save between $10 billion and $14 billion in 2020.

CBO also wrote that lawmakers have the option of decreasing the government’s contribution to the Federal Employees Health Benefits Program and capping increases in military basic pay.

“Very few of the policy changes that CBO has examined in the past are large enough, by themselves, to accomplish a sizable portion of the deficit reduction necessary to put the budget on a more sustainable path,” CBO wrote. “Ultimately, significant deficit reduction is likely to require a combination of policies, many of which may stand in stark contrast to policies now in place.”

Other cost-saving options that would affect a broader audience include adjustments to Medicare, Medicaid and Social Security.

“To put the budget on a path that is more likely to be sustainable than if current policies were continued, lawmakers will need to adopt a combination of policies that require people to pay more for their government, accept less in government benefits and services, or both,” CBO wrote.

Among the consequences of rising federal debt are higher interest payments, a reduction in national saving and an increase in the likelihood of a fiscal crisis, CBO said.

 

Posted in General News

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