Changelog

New revenue option to end the tax preferences that flow to the oil, gas, and coal industries: expensing of intangible drilling costs, percentage depletion above cost, expensing of exploration and development, master-limited-partnership pass-through, enhanced-oil-recovery credit, marginal-wells credit, and coal-specific provisions. The Biden Treasury Green Book scored the narrow list at about $3.5 billion per year; Sanders / Merkley's more comprehensive "End Polluter Welfare Act" reaches roughly $15 billion per year. Simulator uses $8 billion per year (midpoint).

Source: Sanders Senate office and Treasury Green Book.

A second batch of progressive reform proposals fills gaps in the tax and spending sides. Each option is drawn from a quantified proposal by a policy institute or a specific Democratic senator's bill; provenance appears in every description.

Revenue:

• Financial Institution Fee on banks with more than $50 billion in assets - $15 billion/year (Sanders "Inclusive Prosperity Act" / Obama 2010 design)
• Estate tax reform: lower the exemption to $3.5 million per person and add higher progressive rates at the top - $50 billion/year (Sanders "For the 99.8% Act", scored by JCT and ITEP)
• Raise the stock buybacks excise tax from 1% to 4% - $20 billion/year (Biden 2023 proposal, CBPP)

Spending (these make the deficit larger):

• Medicare Buy-In for adults 55-64: net cost about $30 billion/year (Yale Budget Lab / Urban Institute)
• Free community college tuition via a federal-state partnership: $10 billion/year (Treasury Green Book / America's College Promise)
• Universal free breakfast and lunch for all K-12 public-school students: $10 billion/year (CBPP / USDA). Alternative to the CBO option that ends school-meal subsidies for higher-income families - only one school-meals policy can be active.
• Make Section 8 Housing Choice Vouchers an entitlement (currently reaches about 1 in 4 eligible households): $60 billion/year (CBPP)
• Restore the American Rescue Plan-level Earned Income Tax Credit for childless workers: revenue loss of $12 billion/year, cuts poverty among low-wage workers without children by roughly 25% (Treasury Green Book / CBPP)

Sources: Yale Budget Lab, Treasury Green Book, CBPP, Sanders Senate office.

The Committee for a Responsible Federal Budget publishes a running "Budget Offsets Bank" of quantified deficit-reduction options drawn from CBO and other reputable sources. The simulator now includes twelve items from that bank that were not already covered by CBO, JCT, or GAO:

Medicare and drug pricing:

• Reduce excessive Medicare payments for post-acute care ($5 billion/year)
• Reform Medicare hospice payments ($1 billion/year)
• Expand Medicare Part D drug price negotiation to a broader set of drugs with an international-benchmark cap - beyond the narrow Inflation Reduction Act version ($30 billion/year)
• Reduce and reform Disproportionate Share Hospital (DSH) payments ($5 billion/year)
• Set Medicare Advantage payments using competitive bidding - alternative to the existing benchmark-reduction option ($6.5 billion/year)

Medicaid and ACA:

• Cap the federal match on Medicaid administrative costs at 50% ($6.5 billion/year)
• Establish a public option in the ACA marketplaces ($10 billion/year)
• Phase out ACA premium subsidies above 300% of the federal poverty line ($5 billion/year)

Revenue:

• Federal excise tax on sugar-sweetened beverages ($12.5 billion/year)
• Repeal the orphan drug tax credit ($2 billion/year)
• Vehicle Miles Traveled (VMT) tax at 1 cent per mile - modernizes the gas-tax model as EV adoption rises ($25 billion/year)
• Cap Flexible Spending Account contributions ($2.5 billion/year)

The CRFB list dates from March 2020, so it predates the Inflation Reduction Act (2022) and the One Big Beautiful Bill Act (2025). Each description flags the pre-OBBBA vintage; a couple of items may raise less today than the CRFB score suggests because pieces of the reform have already been enacted.

Source: CRFB Budget Offsets Bank.

The simulator gained seven reform options drawn from the Government Accountability Office's 2026 Annual Duplication Report, which identifies opportunities to reduce overlap, fragmentation, and waste across the federal government. Each item is small on its own, but efficiency reforms compound - GAO estimates the open recommendations could yield $100 billion or more in cumulative benefits.

New options across the simulator:

• General Government: Reauthorize the FirstNet public-safety broadband network before the 2027 sunset ($1 billion/year); optimize federal real property to match hybrid-work occupancy ($1.5 billion/year).
• Health: Expand VA/DoD health-care resource sharing agreements ($0.1 billion/year).
• Defense: Improve Navy shipbuilding acquisition and sustainment ($3 billion/year).
• Education: Verify income data on Income-Driven Repayment applications ($0.2 billion/year).
• Natural Resources: Reclassify certain defense nuclear waste for lower-cost management ($2 billion/year).
• Revenue: Reform IRA tax preferences to cap large-balance accumulation ($1 billion/year).

Source: GAO Annual Duplication Report 2026 (GAO-26-108505).

The simulator gained eleven progressive reform proposals scored by academic and advocacy groups. Some raise revenue, some are new federal spending programs that make the deficit worse in exchange for reducing child poverty, closing the housing gap, or paying down climate risk. Provenance is called out in each description.

Tax the ultra-rich (alternatives - only one can be active at a time):

• Warren-style wealth tax on households above $50 million and $1 billion in net worth ($250 billion/year, Yale Budget Lab)
• Biden's billionaire minimum income tax: 25% floor for households above $100 million including unrealized gains ($50 billion/year, Treasury Green Book)

Raise the top marginal rate (alternative to the CBO "raise every rate by one point" option):

• Top marginal income-tax rate to 45% ($85 billion/year, ITEP)

Corporate and financial-transactions taxes as escalations of the existing CBO options:

• Corporate rate to 28% - builds on the CBO "raise by 1 point to 22%" option ($85 billion/year combined, Treasury Green Book)
• Financial transactions tax at 0.5% - builds on the CBO 0.1% option ($150 billion/year combined, EPI)

Independent revenue raisers:

• Excess-profits tax on fossil-fuel producers and pharma ($75 billion/year, CBPP)

New spending programs (these make the deficit larger):

• Universal federal child care and pre-K - costs $75 billion/year (Roosevelt Institute)
• Federal paid family and medical leave - costs $45 billion/year (CBPP)
• Grid modernization and household electrification - costs $50 billion/year (Rewiring America)
• Federal housing supply and affordability investment - costs $30 billion/year (Groundwork Collaborative)
• Restore the American Rescue Plan-level Child Tax Credit - costs $110 billion/year (CBPP)

Sources: Yale Budget Lab, Treasury Green Book, ITEP, EPI, CBPP, Roosevelt Institute, Groundwork Collaborative, Rewiring America.

Seven reform options were classified as spending changes when they are actually revenue raisers. Activating any of them was making the shown deficit worse instead of better. They now live on the revenue side of the simulator, where the numbers move in the correct direction:

• Raise the gas and diesel tax and index it to inflation ($21.2 billion/year)
• Raise USCIS and CBP fees by 20% ($1.6 billion/year)
• Raise the Social Security payroll-tax cap to $400,000 ($107.5 billion/year)
• Cover newly hired state and local employees under Social Security ($14.9 billion/year)
• Reduce the tax break for employer-sponsored health insurance ($74.3 billion/year)
• Repeal the Low-Income Housing Tax Credit ($6.9 billion/year)
• Raise federal civilian retirement contributions to FERS ($4.0 billion/year)

Also corrected the sign on Medicare Part B premiums: higher premiums are offsetting collections that reduce net federal Medicare outlays, so activating this option now shows a saving of $51 billion/year instead of a cost of the same amount.

Thanks to the reader who spotted this on the gas tax option.

Nine additional reform options from CBO's "Options for Reducing the Deficit 2025-2034" completed the catalog. Together with earlier batches, the simulator now carries all 76 options from that report.

Health and Medicare:

• Adopt a voucher plan for the Federal Employees Health Benefits program ($1.4 billion/year)
• Pay Medicare hospital outpatient departments the same rates as physicians' offices for similar services ($15.7 billion/year)

Social Security:

• Tighten Social Security Disability Insurance eligibility by shortening the recent-work look-back window ($6.0 billion/year)

Education, training, and social services:

• Eliminate federal funding for AmeriCorps and Senior Corps ($1.0 billion/year)

Revenue:

• Eliminate the federal tax exemption for new private activity bonds ($4.3 billion/year)
• Apply the Net Investment Income Tax to active S-corp and partnership owners ($42.0 billion/year)
• Eliminate the American Opportunity and Lifetime Learning tax credits ($13.0 billion/year)
• Lower the Earned Income Tax Credit investment-income limit and extend it to the Child Tax Credit ($1.1 billion/year)
• Require a work-eligible Social Security number to claim the Earned Income Tax Credit and the Child Tax Credit ($2.8 billion/year)

Source: CBO Options for Reducing the Deficit: 2025 to 2034 (December 2024).

Two more reform options from CBO's "Options for Reducing the Deficit 2025-2034" now sit as milder alternatives to the two most aggressive tax-side reforms:

• Limit the charitable-contributions deduction. Cap donations above 2% of adjusted gross income, or limit to cash contributions - $33.6 billion/year. The full-repeal option for the general charitable deduction now sits as a follow-on that escalates this partial cap.
• Further limit annual contributions to retirement plans. Cut the 401(k) limit to $20,000 and the IRA limit to $6,000, regardless of age - $18.7 billion/year. The full-repeal option for the retirement-plan tax preference now sits as a follow-on.

The full-repeal versions cannot be picked alone anymore: turning one on auto-activates the underlying partial reform, and their combined effect matches the original full-repeal amount. The three targeted itemized-deduction repeals (mortgage, SALT, charitable) now also properly cancel out the broader "eliminate or limit itemized deductions" package if you select either path.

Source: CBO Options for Reducing the Deficit: 2025 to 2034 (December 2024).

Ten more reform options from CBO's "Options for Reducing the Deficit 2025-2034" are now live in the simulator, filling gaps in five categories. All ten use the same scoring convention as the existing CBO options: annual mean = ten-year total ÷ 10.

Medicare:

• Reduce Medicare's coverage of provider "bad debt" from 65% to 25% ($3.3 billion/year)
• Cut Medicare payments to 340B hospitals for outpatient drugs ($7.4 billion/year)

Health - TRICARE for Life:

• Introduce enrollment fees for TRICARE for Life ($1.7 billion/year)
• Add minimum out-of-pocket requirements to TRICARE for Life ($3.2 billion/year)

National Defense:

• Replace military support positions with civilian employees ($0.9 billion/year)
• Retire the B-1B bomber fleet ($0.6 billion/year)

Revenue:

• Eliminate the head-of-household filing status ($14.3 billion/year)
• Include VA disability payments in taxable income ($23.5 billion/year)
• Repeal LIFO and related inventory-valuation methods ($10.4 billion/year)
• Require amortization of half of advertising expenses ($13.0 billion/year)

Source: CBO Options for Reducing the Deficit: 2025 to 2034 (December 2024).

The revenue side of the simulator gained 14 new reform options, drawn from the Joint Committee on Taxation's official tax-expenditure report (December 2025, covering fiscal years 2025-2029). The report reflects US tax law as of August 31, 2025 - so it captures the OBBBA (July 2025) changes and the scores are current.

New reform options cover:

• Repealing the mortgage-interest deduction ($52.2 billion/year)
• Repealing the qualified business income deduction for pass-through owners, enacted by TCJA (2017) and made permanent by OBBBA ($78.0 billion/year)
• Repealing the deduction for state and local taxes (SALT) ($59.7 billion/year)
• Repealing the tax exclusion for employer-provided health insurance - the largest single tax expenditure in the federal budget ($253.6 billion/year)
• Repealing the tax preference for 401(k) and other defined-contribution retirement plans ($244.1 billion/year)
• Ending bonus depreciation and accelerated equipment depreciation ($59.3 billion/year)
• Repealing the research and experimentation (R&D) tax credit ($37.8 billion/year)
• Repealing the general charitable-contributions deduction ($60.6 billion/year)
• Repealing four new OBBBA deductions: no-tax-on-tips, no-tax-on-overtime, the enhanced senior deduction, and personal vehicle loan interest (combined about $47.9 billion/year)
• Repealing the tax preference for health savings accounts (HSAs) ($16.5 billion/year)
• Ending the capital-gains exclusion on the sale of a primary residence ($62.6 billion/year)

Score convention for the new options: annual mean = JCT 5-year total ÷ 5.

Source: JCT Estimates of Federal Tax Expenditures for FY 2025-2029.

Baseline (CBO Budget and Economic Outlook 2026-2036, February 2026):

• Revenues FY 2027: $5,885.2 billion
• Outlays FY 2027: $7,772.4 billion
• Deficit FY 2027: $1,887.2 billion (5.7% of GDP)
• Debt held by the public (end FY 2027): $34,004.5 billion (102.1% of GDP)

Spending is grouped into 19 categories along the OMB / CBO function codes (Social Security, Medicare, Medicaid & Health, National Defense, Income Security, Veterans, Transportation, Education, Administration of Justice, Natural Resources, Community Development, International Affairs, Agriculture, Science & Space, General Government, Energy, Commerce & Housing Credit, Net Interest, Undistributed Offsetting Receipts). Revenue is broken out by category (individual income, payroll, corporate, customs / tariffs, excise, misc).

Policy options (initial seed): 41 spending-side options and 14 revenue-side options drawn from CBO's "Options for Reducing the Deficit: 2025-2034" (December 2024, 76 options). Score convention: annual mean = CBO 10-year total ÷ 10. Follow-up work will replace pre-OBBBA scores with post-OBBBA equivalents as they are published and pull in JCT tax-expenditure and GAO duplication material.

Source: CBO Budget and Economic Outlook 2026-2036, CBO Options for Reducing the Deficit.