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**RSC Budget Options 2005**

**(Revised 9/22/2005)**

**Summary and Explanation of Offsets**

*"Give us a quiet room, copies of the spending bills, a box of red
pencils, and watch what happens."*

*---Constituent from New Mexico*

**Rep. Mike Pence, RSC Chairman**

**Rep. Jeb Hensarling, RSC Budget & Spending Task Force Chairman**

**RSC Budget Options 2005**

**Operation Offset**

**Summary and Explanation of Offsets**

Title I: Tough Choices in Tough
Times.........................................................\...\.....1

Title II: Restraining Foreign
Aid........................................................................4

Title III: Reprioritization of Federal
Spending......................................................\...6

Title IV: Containing the Federal
Bureaucracy........................................................17

Title V: Eliminating Corporate
Welfare..............................................................19

Title VI: Rational Reforms to Defense and Homeland
Security...................................22

Total
Savings...............................................................................................23

> **[Title I: Tough Choices in Tough Times]{.smallcaps}**

**Table 1: Summary of Savings in Title I**

(Savings from Baseline, in Millions of Dollars)

5-year 10-year

2006 savings savings

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

  ---------------------------------------- --------- ------------ ----------
  Delay the Medicare Prescription Drug     -30,800   -30,800      -30,800
  Bill for One year                                               

  Repeal the Highway Earmarks in TEA-LU    -25,000   -25,000      -25,000

  Reduce Medicaid Administrative Spending  -600      -4,230       -12,860

  Increase Allowable Co-pays in Medicaid   -90       -1,970       -7,730

  Block Grant Medicaid Acute Services      -2,300    -44,000      -225,000

  Reduce Farm Payment Acreage by 1%        -31       -452         -941

  Eliminate Subsidized Loans to Graduate   -840      -4,170       -8,555
  Students                                                        

  Base New Federal Retiree Health on       -130      -1,560       -6,330
  Length of Service                                               

  Increase Medicare Part B Premium from    -4,650    -33,500      -84,770
  25% to 30%                                                      

  Restructure Medicare\'s Cost-Sharing     -4,750    -34,230      -87,460
  Requirement                                                     

  Impose a Home Health Co-payment of 10%   -1,470    -11,800      -31,480

  Update the Formula Used for Federal      -50       -1,305       -5,170
  Pension                                                         

  **SUBTOTAL: Tough Options**              -70,711   -193,017     -526,096
  ---------------------------------------- --------- ------------ ----------

[Delay the Medicare Prescription Drug Program for One Year]{.underline}

Under current law, the prescription drug benefit becomes effective on
January 1, 2006, and OMB has estimated that it will cost as much as
\$1.2 trillion over the next ten years. Anyone with Medicare Part A or
Part B may enroll in the prescription drug plan, and will be eligible
for prescription drugs at discounted prices. In light of current budget
constraints, it is prudent domestic fiscal policy to delay
implementation of the prescription drug benefit for one year while
continuing the current drug discount card program. Savings: \$30.8
billion over ten years

[Repeal the Highway Earmarks in TEA-LU]{.underline}

The recently passed FY06 Highway Bill, also known as TEA-LU, contained
more than 6,000 earmarks, worth nearly \$25 billion. Some of the most
egregious examples include \$200 million for the "bridge to nowhere," a
bridge in Alaska that would serve an island with 50 residents, \$75
million for metro extension in Washington, D.C., \$15 million to
purchase three ferries and establish a ferry system from Rockaway
Peninsula to Manhattan, New York, and \$2.5 million for the Blue Ridge
Music Center. For comparison, the 1998 transportation bill was
considered a major budget buster at the time with 1,850 earmarks and a
veto threat from President Clinton. In just seven years, Congress has
added over 4,000 earmarks to the bill. Savings: \$25 billion over ten
years

[Reduce Medicaid Administrative Spending]{.underline}

The federal government currently reimburses states for about 50 percent
of the cost of managing their Medicaid programs. Under this option, the
federal government would cap the per-enrollee amount that it pays each
state for Medicaid administration. This would give states a stronger
incentive to improve the efficiency with which they manage their
Medicaid programs. Savings: \$12.9 billion over ten years (\$4.2 billion
over five years)

[Increase Allowable Co-payments for Medicaid]{.underline}

Although states are allowed a great deal of discretion in designing
their Medicaid programs, federal rules have traditionally limited
cost-sharing requirements for beneficiaries. This option would raise the
federal limits on *allowable* co-payments in Medicaid\--from \$3 for
adults and zero for children to \$5 and \$3, respectively. The higher
co-payments would apply to outpatient hospital visits, prescription
drugs, non-emergency visits to emergency rooms, and visits to physicians
and dentists. Increased co-payments would encourage a more
cost-conscious use of services by beneficiaries, reducing the number of
unnecessary medical services provided. Savings: \$7.7 billion over ten
years (\$2.0 billion over five years)

[Block Grant Medicaid and Index for Population and
Inflation]{.underline}

The Medicaid program funds coverage for two broadly different types of
health care: acute care (including services such as inpatient hospital
stays and visits to physicians' offices, and products such as
prescription drugs) and long-term care (services such as nursing home
care and home and community-based assistance). The program is financed
jointly by the states and the federal government, with the federal
government's share determined as a percentage of overall Medicaid
spending. That percentage, referred to as the federal matching rate, can
range from a floor of 50 percent to a ceiling of 83 percent, depending
on a state's per capita income. This option would convert the federal
share of Medicaid payments for acute care services into a block grant,
as 1996 legislation did with funding for welfare programs, that would be
increased annually for inflation and state population growth. (Long-term
care would continue to be financed using the matching rate.) Funding
acute care with a block grant rather than with federal matching payments
would strengthen states\' incentive to spend money cost-effectively by
eliminating the subsidy for each additional dollar spent on health care.
Savings: \$225 billion over ten years (\$44 billion over five years)

[Reduce Farm Payment Acreage by 1%]{.underline}

Farmers are subsidized according to acreage and average yield,
regardless of what is actually produced on the farm. Significant savings
could be achieved proportionally by using 84% instead of 85% of acreage
in the payment formula without adversely affecting producers of a
specific commodity. Savings: \$941 million over ten years (\$452 million
over five years)

[Eliminate Subsidized Loans to Graduate Students]{.underline}

The federal government has extensive loan options for financing
education. Students have likely had government help paying for college,
if there was financial need. Graduate students make an informed decision
to invest in their own futures and should bare the costs of schooling,
especially since private interest rates are currently low. This reform
would allow federal higher education funding to be focused on college
students while still allowing graduate students to benefit from
unsubsidized federal loans. Savings: \$8.6 billion over ten years (\$4.2
billion over five years)

[Base New Federal Retiree Health Benefits on Length of
Service]{.underline}

Federal retirees are generally allowed to continue receiving benefits
from the Federal Employees Health Benefits (FEHB) program if they have
participated in the program during their last five years of service and
are eligible to receive an immediate annuity. More than 80 percent of
new retirees elect to continue health benefits. This option would reduce
health benefits for new retirees who had relatively short federal
careers, although it would preserve their right to participate in the
FEHB program. This could make the government's mix of compensation
fairer and more efficient by improving the link between length of
service and deferred compensation, and would also help bring federal
benefits closer to those of private companies. Savings: \$6.3 billion
over ten years (\$1.6 billion over five years)

[Increase Medicare Part B Premium from 25% to 30%]{.underline}

Medicare provides health insurance coverage for physicians' services and
hospital outpatient services through its Supplementary Medical Insurance
(SMI) program, or Medicare Part B. Monthly premiums paid by enrollees
partially fund SMI benefits; general federal revenues fund the
remainder. Initially, the SMI premium was supposed to cover 50 percent
of program costs. But that share declined between 1975 and 1983,
eventually reaching less than 25 percent. This reform would set the SMI
premium equal to 30 percent of the cost of Part B benefits, beginning in
2006. This would reduce Medicare's costs amid the broader budgetary
pressures posed in part by the aging of the baby-boom generation.
Savings: \$84.8 billion over ten years (\$33.5 billion over five years)

[Restructure Medicare's Cost-Sharing Requirements]{.underline}

In the fee-for-service Medicare program---consisting of Part A (Hospital
Insurance) and Part B (Supplementary Medical Insurance)---beneficiaries'
cost sharing varies significantly depending on the type of service
provided. At the same time, certain Medicare services, such as home
health visits and laboratory tests, require no cost sharing. This option
would replace the current complicated mix of cost-sharing provisions
with a single combined deductible covering all services in Parts A and B
of Medicare, a uniform coinsurance rate of 20 percent for amounts above
that deductible (including inpatient expenses), and an annual cap on
each beneficiary's total cost-sharing liabilities. This would provide
greater protection against catastrophic costs while reducing Medicare's
coverage of more predictable expenses. Savings: \$87.5 billion over ten
years (\$34.2 billion over five years)

[Impose a Home Health Co-payment of 10%]{.underline}

Medicare's spending for home health care dropped during the late 1990s
following passage of the Balanced Budget Act of 1997, which introduced a
prospective payment system (PPS) for home health services. But the
Congressional Budget Office projects that the use of home health
services, and the resulting costs to the Medicare program, will grow
rapidly over the next 10 years. One reason for the projected rapid
growth is that Medicare beneficiaries are not currently required to pay
any of the cost of home health services covered by the program. This
reform would charge beneficiaries a co-payment amounting to 10 percent
of the total cost of each home health "episode"---a 60-day period of
services---covered by Medicare, starting on January 1, 2006. This would
directly offset a portion of Medicare's home health outlays and
encourage beneficiaries to be cost-conscious in their use of home health
services. Savings: \$31.5 billion over ten years (\$11.8 billion over
five years)

[Update Formula Used for Federal Pensions from Three Years to Five
Years]{.underline}

The government's major retirement plans for civilian employees, the
Federal Employees Retirement System (FERS) and the Civil Service
Retirement System (CSRS), provide initial benefits that are based on
average salary during an employee's three consecutive highest-earning
years. Switching to a five-year average for new retirees would align
federal practices with those in the private sector, which commonly uses
five-year averages to calculate a worker's base pension. Savings: \$5.2
billion over ten years (\$1.3 billion over five years)

> **[Title II: Restraining Foreign Aid]{.smallcaps}**

**Table 2: Summary of Savings in Title II**

(Savings from Baseline, in Millions of Dollars)

5-year 10-year

2006 savings savings

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

  ----------------------------------------- -------- ----------- ---------
  Eliminate US Subscriptions to the         -36      -184        -386
  European Bank                                                  

  Reduce Economic Assistance to Egypt       -12      -400        -1,200

  Eliminate Millennium Challenge Accounts   -1,750   -9,415      -24,352

  Level Funding for Peacekeeping Operations -93      -500        -1,294

  Eliminate International Fund for Ireland  -14      -75         -195

  Level Funding for Global AIDS Initiative  -546     -2,938      -7,598

  Level Funding for Inter-American          -2       -11         -28
  Foundation                                                     

  Level Funding for the African Development -2       -11         -28
  Foundation                                                     

  Level Funding for the Peace Corps         -8       -43         -111

  Level Funding for Andean Counter-Drug     -9       -48         -125
  Initiative                                                     

  Reduce USAID Operating Expenses           -57      -307        -793

  Level Funding for the International       -107     -576        -1,489
  Development Assoc.                                             

  Level Funding for Asian Development Bank  -16      -86         -223

  **SUBTOTAL: Restraining Foreign Aid**     -2,652   -14,594     -37,822
  ----------------------------------------- -------- ----------- ---------

[Eliminate U.S. Subscriptions to the European Bank for Reconstruction
and Development]{.underline}

These loans to Central and Eastern European nations, which
overwhelmingly end up in private hands, are not the responsibility of
the U.S. Government. 2005 is the final year of an eight-year
subscription and a sensible time to end our participation in propping up
organizations with loans considered unwise by the private sector. Again,
internal financial industry reforms are needed. Savings: \$386 million
over ten years (\$184 million over five years)

[]{.mark}

[Reduce Economic Assistance to Egypt]{.underline}

Since 1979, Congress has provided foreign aid to Egypt, as many other
nations do. However, Egypt has been unable to spend all our funds and
delayed internal reforms needed to foster self-sustaining growth.
Despite being the second largest recipient of U.S. foreign assistance,
Egypt's democratic development has been extremely limited and its human
rights record remains poor, according to the Department of State's
Country Reports on Human Rights Practices for 2004. Egyptian authorities
continue to mistreat and torture prisoners, arbitrarily arrest and
detain persons, hold detainees in prolonged pretrial detention, and
occasionally engage in mass arrests without charge. Savings: \$1.2
billion over ten years (\$400 million over five years)

[Eliminate Millennium Challenge Accounts]{.underline}

President Bush's initiative to restructure foreign aid to reward and
therefore provide incentives to countries taking steps towards economic
independence has been added on top of, *instead of replacing*, the still
growing USAID budget. Savings: \$24.4 billion over ten years (\$9.4
billion over five years)

[Level Funding for U.N. Peacekeeping Operations]{.underline}

The United States is the largest financial contributor to the U.N.
peacekeeping budget. Current military obligations in Iraq and
Afghanistan, including U.S. peacekeeping efforts in the region, are not
deducted from what the U.N. assesses the U.S. in dues. Freezing the
account maintains current commitments, while recognizing the need for
other countries to support additional peacekeeping expenses. Savings:
\$1.3 billion over ten years (\$500 million over five years)

[Eliminate International Fund for Ireland]{.underline}

This is a targeted economic development grant program for Northern
Ireland, an economy that has seen marked improvement and an area that
has lower unemployment than the U.S. Savings: \$195 million over ten
years (\$75 million over five years)

[Level Funding for Global AIDS Initiative]{.underline}

In FY05, Congress appropriated \$1.37 billion for the new Global
HIV/AIDS Initiative, which exceeded the previous year's funding and the
President's funding request. Level funding the program would save
billions of dollars, while still funding international HIV/AIDS programs
of prevention, treatment and care at record levels. Savings: \$7.6
billion over ten years (\$2.9 billion over five years)

[Level Funding for the Inter-American Foundation]{.underline}

IAF makes approximately 60 new grants each year to non-profit and
community-based programs in Latin America and the Caribbean to
organizations that promote entrepreneurship, self-reliance, and economic
progress for the poor. Latin American countries are getting stronger and
the public and private sector in Latin America should fund their own
nonprofit organizations. Savings: \$28 million over ten years (\$11
million over five years)

[Level Funding for African Development Foundation]{.underline}

ADF makes small grants directly to African cooperatives and self-help
organizations for between \$20,000 and \$250,000, and supports
grassroots African development research and community projects. This
type of work could be funded by other organizations, including those in
the international community. Savings: \$28 million over ten years (\$11
million over five years)

[Level Funding for the Peace Corps]{.underline}

This organization sends Americans to serve at the grassroots level in
villages and towns in poor countries. This program's long-term benefits
to the federal government are limited and keeping volunteers safe is
becoming more and more difficult and expensive. Freezing funding would
continue current commitments. Savings: \$111 million over ten years
(\$43 million over five years)

[Level Funding for Andean Counter-Drug Initiative]{.underline}

In 2001, the Bush Administration proposed \$882 million in FY2002
economic and counter-narcotics assistance, as well as extension of trade
preferences and other measures, for Colombia and regional neighbors in
an initiative called the "Andean Regional Initiative" (ARI). The program
focuses on military and counter-drug assistance. Savings: \$125 million
over ten years (\$48 million over 5 years)

[Reduce USAID Operating Expenses]{.underline}

USAID provides grants to foreign entities in various areas of
assistance. For example, USAID funds have been used to send employees on
expensive, oversees conferences, such as to Barcelona and Thailand.
Savings: \$793 million over ten years (\$307 million over five years)

[Level Funding for the International Development
Association]{.underline}

The IDA is a member of the World Bank Group and provides development
financing in the form of grants and no-interest loans to the world's
poorest nations. IDA's gross disbursements were \$6.9 billion in 2004,
and the U.S. provides approximately 14 percent of donor contributions.
The U.S. is working on a results oriented framework to ensure these
loans to poor countries are effective. Level funding will produce
significant overall savings while having minimal negative impact of this
program. Savings: \$1.5 billion over ten years (\$576 million over five
years)

[Level Funding for the Asian Development Bank (ADB)]{.underline}

Based in Manila, ADB is a multilateral development finance institution
focusing on reducing poverty in Asia and the Pacific. The vast majority
of the member countries providing funding are from the region. Level
funding will produce significant overall savings while having minimal
negative impact on this program. Savings: \$223 million over ten years
(\$86 million over five years)

> **[Title III: Reprioritization of Federal Spending]{.smallcaps}**

**Table 3: Summary of Savings in Title III**

(Savings from Baseline, in Millions of Dollars)

5-year 10-year

2006 savings savings

  --------------------------------------- --------- ----------- -----------
  Eliminate the National Science          -188      -973        -2,036
  Foundation Math and Science Program                           

  Cancel NASA\'s New Moon/Mars Initiative -1,493    -11,511     -44,042

  Eliminate State and Community Grants    -36       -223        -479
  for Energy Conservation                                       

  Eliminate Money-Losing Timber Sales     -130      -710        -1,550

  Scale Back the Conservation Security    -58       -2,216      -6,676
  Program                                                       

  Limit Future Enrollment in the          -14       -1,910      -5,285
  Conservation Reserve Program                                  

  Eliminate the National Parks Heritage   -26       -134        -280
  Areas and Statutory Aid                                       

  Eliminate Federal Grants for Wastewater -950      -9,899      -23,332
  Infrastructure                                                

  Eliminate the Energy Star Program       -75       -391        -835

  Eliminate the Science to Achieve        -90       -472        -1,007
  Results Program                                               

  Eliminate Payments to Socially          -6        -32         -83
  Disadvantaged Farmers and Ranchers                            

  Reduce Federal Subsidies for Amtrak     -250      -1,250      -2,500

  Eliminate the Next Generation of        -20       -105        -220
  High-Speed Rail                                               

  Eliminate the New Starts Transit        -1,204    -6,055      -12,200
  Program                                                       

  Eliminate the Essential Air Service     -103      -525        -1,075

  Drop Wealthy Communities from CDBG      -837      -4,330      -9,064

  Convert Rural Community Advancement     -12       -194        -4,517
  Program to State Revolving Funds                              

  Eliminate the Neighborhood Reinvestment -116      -600        -1,257
  Corporation                                                   

                                          2006      5-year      10-year

                                                    savings     savings

  Eliminate the Community Development     -52       -270        -566
  Financial Institutions Fund                                   

  Eliminate the Economic Development      -201      -1,081      -2,797
  Administration                                                

  Eliminate the Minority Business         -30       -161        -417
  Development Agency                                            

  Eliminate State Grants for Safe and     -444      -2,298      -4,810
  Drug-Free Schools                                             

  Eliminate the Even Start Program        -114      -592        -1,238

  Eliminate Teen Funding Portion of Title -95       -511        -1,322
  X Family Planning                                             

  Eliminate the Administration Fees to    -144      -744        -1,557
  Schools                                                       

  Eliminate the Leveraging Educational    -67       -345        -722
  Assistance Program                                            

  Eliminate Funding for the National and  -560      -3,000      -6,480
  Community Service Act                                         

  End the Redistribution of Unused        -20       -350        -1,140
  Federal Funds from SCHIP                                      

  Eliminate Childless Adult Coverage in   n/a       -330        -660
  SCHIP                                                         

  Eliminate Funding for Penile Implants   n/a       -4          -8
  Under Medicare                                                

  Tie Rent Subsidies for One Person to    -62       -894        -3,146
  Cost of Efficiency Apartments                                 

  Eliminate School Lunches for Students   -125      -3,150      -6,690
  Above 350% of Poverty                                         

  Remove Ceiling for Collecting           -70       -425        -920
  Overpayments from SSI                                         

  Verify Income of Earned Income Tax      -8,500    -42,500     -85,000
  Credit Participants                                           

  Eliminate Fiscal Assistance to District -154      -800        -1,675
  of Columbia                                                   

  Require IRS to Deposit Fees Collected   -91       -473        -989
  by Treasury                                                   

  Eliminate Presidential Election         -55       -275        -550
  Campaign Fund                                                 

  Eliminate the Federal Anti-Drug         -122      -631        -1,320
  Advertising                                                   

  Eliminate Federal Funding for the       -400      -2,152      -5,566
  Corporation for Public Broadcasting                           

  Raise the Threshold for Davis-Bacon     -200      -1,025      -2,130
  Coverage                                                      

  Charge Federal Employees for Parking    -140      -720        -1,540

  Eliminate Legal Services Corporation    -331      -1,781      -4,606

  Eliminate High Intensity Drug           -227      -1,221      -3,159
  Trafficking Area Program                                      

  United States Postal Service Foregone   -43       -231        -598

  Decline Member Pay Raise                -2        -9          -24

  Reduce Bureau of Land Management        -6        -32         -83
  Construction                                                  

  Reduce Fish and Wildlife Construction   -26       -140        -362

  Eliminate Funding for the National      -126      -678        -1,753
  Endowment for the Arts                                        

  Eliminate Funding for National          -143      -769        -1,990
  Endowment for Humanities                                      

  Eliminate Funding for the Forest        -10       -54         -139
  Service's Economic Action Program                             

  Reduce Funds for the Water Quality      -15       -81         -209
  Cooperative Agreement                                         

  Reduce Funds for Bureau of Indian       -36       -194        -501
  Affairs School Construction                                   

  Reduce Funds for Forest Service Capital -60       -323        -835
  Improvements                                                  

  Reduce Funds for the NCRS Operations    -26       -140        -362

  Reduce Funds for Waste Disposal Grants  -116      -624        -1,614

                                          2006      5-year      10-year

                                                    savings     savings

  Reduce Funds for Cooperative State      -110      -592        -1,531
  Research and Education                                        

  Eliminate Rural Empowerment Zone Grant  -10       -54         -139

  Eliminate Citrus Canker Compensation    -10       -54         -139

  Reduce DOE Environmental Management     -400      -2,152      -5,566

  Eliminate the Appalachian Regional      -39       -210        -543
  Commission                                                    

  Eliminate the Denali Commission         -3        -16         -42

  Eliminate Native Hawaiian Funding       -40       -215        -557

  Level Funding for Community Health      -100      -538        -1,392
  Centers                                                       

  Reduce Funding for the Centers for      -1,797    -9,668      -25,006
  Disease Control                                               

  Reduce Funding for the Airport          -600      -3,228      -8,349
  Improvement Program                                           

  **SUBTOTAL: Reprioritization**          -21,530   -127,265    -307,180
  --------------------------------------- --------- ----------- -----------

[Eliminate the National Science Foundation Math and Science
Program]{.underline}

The NSF promotes math and science education by improving teacher
training and developing instructional material. However, the program is
now duplicative of programs at the Department of Education, including
the Math and Science Partnership authorized by No Child Left Behind.
Savings: \$2 billion over ten years (\$973 million over five years)

[Cancel NASA's New Moon/Mars Initiative]{.underline}

In 2004, the President announced a new initiative to explore the Moon
and Mars with the goal of returning humans to the Moon by 2020. NASA
currently intends to use the savings from phasing out the space shuttle
in 2012 to fund this program. Savings: \$44 billion over ten years
(\$11.5 billion over five years)

[Eliminate State and Community Grants for Energy
Conservation]{.underline}

The Department of Energy provides grants to state and local governments
for energy conservation efforts, including grants to help educational
and health care institutions reduce their energy use. In addition,
grants are provided to state and municipal programs to establish energy
efficiency standards and promote car pooling. However, this program is
duplicative of other federal efforts, including LIHEAP and the Clean Air
Act. Savings: \$479 million over ten years (\$223 million over five
years)

[Eliminate Money-Losing Timber Sales]{.underline}

Timber sales in the National Forest System, under the direction of the
Forest Service, are incurring more administrative costs then revenues
collected from harvesting the timber. According to CBO, in 2002, program
costs exceeded timber sales by \$146 million. Eliminating timber sales
in four regions where expenditures were more than twice the receipts
would save money and lessen the depletion of timber resources. Savings:
\$1.6 billion over ten years (\$710 million over five years)

[Scale Back the Conservation Security Program]{.underline}

CSP provides farmers with financial and technical assistance to promote
energy, soil, water and plant conservation. However, many of the farmers
to whom financial assistance is given have already adopted conservation
practices, and often times adoption of the practices costs less than the
assistance subsidy itself. The program could be scaled back by simply
eliminating *new* enrollments and by eliminating certain "bonus"
payments (for additional conservation efforts), leaving intact existing
contracts. Savings: \$6.8 billion over ten years (\$2.2 billion over
five years)

[Limit Future Enrollment in the Conservation Reserve
Program]{.underline}

CRP pays farmers not to farm their land. Setting a cap on future
enrollment (such as 36.4 million acres) and prohibiting new enrollees
would scale back the program's expenses while allowing current enrollees
to re-enroll. Savings: \$5.3 billion over ten years (\$1.9 billion over
5 years)

[Eliminate the National Parks Heritage Areas and Statutory
Aid]{.underline}

Both of these programs assist local communities in preserving and
establishing areas of natural, historical, or cultural significance.
These funds were meant to be "seed" money, and the local communities
intended to self-finance at a certain point. This has not yet occurred.
Savings: \$280 million over ten years (\$134 million over five years)

[Eliminate Federal Grants for Wastewater Infrastructure]{.underline}

The federal government assists states in achieving federally mandated
water quality standards by providing wastewater grants. Although
congressional authorization for these grants has expired, Congress
continues to provide the necessary funding. Some contend that by
providing failing states with these grants, the federal government is
giving the states an incentive to retain poor wastewater treatment
infrastructure. Savings: \$23.3 billion over ten years (\$9.9 billion
over five years)

[Eliminate the Energy Star Program]{.underline}

The Energy Star Program encourages consumers and organizations to
produce and purchase energy saving items for their home or business with
its label and certification. For example, if a company's products meet a
certain energy efficiency standard, they may place the Energy Star label
on their product. Some contend the program does not actually yield any
energy savings, and that the labels are too vague to share any
educational information with the consumer. Savings: \$835 million over
ten years (\$391 million over five years)

[Eliminate the Science to Achieve Results Program]{.underline}

The STAR program is a competitive grant program designed to fund science
research that relates to the mission of the EPA. A recent OMB report
stated the much of the research funded under this program is highly
duplicative of research already being conducted at other agencies.
Additionally, a National Research Council study of the program concluded
the EPA does not efficiently utilize outside experts in planning its
research agenda. Savings: \$1 billion over ten years (\$472 million over
five years)

[Eliminate Payments to Socially Disadvantaged Farmers and
Ranchers]{.underline}

The Socially Disadvantaged Farmers and Ranchers Competitive Grant
Program provides funds to land-grant, Hispanic-serving, and Native
American-serving institutions, to assist "socially disadvantaged
farmers" who own and operate farms. This program is duplicative since
these same farmers are eligible for all other farm programs. Savings:
\$84 million over ten years (\$32 million over five years)

[Reduce Federal Subsidies for Amtrak]{.underline}

When Amtrak was founded in 1970, Congress only intended to subsidize
passenger rail until it could become self-sufficient. 30 years of
funding history suggests that end is unrealistic, and travelers have
many other modes of transportation available. Significant savings could
be achieved by ceasing to operate a few very expensive long-distance
routes, which serve a limited ridership, and continuing to offer only
profitable services as a business would. Savings: \$2.5 billion over ten
years (\$1.3 billion over five years)

[Eliminate the Next Generation of High-Speed Rail]{.underline}

Since 1994, Congress has funded research to facilitate passenger rail
above 125 miles per hour, but little progress has been made. Existing
trains and tracks are not suitable for such high speeds, and incremental
improvements to infrastructure are currently a better investment than
new technology. The private sector has largely chosen to wait and see if
other countries can make a profit off this technology. Savings: \$220
million over 10 years (\$105 million over five years)

[Eliminate the New Starts Transit Program]{.underline}

This program funds new light rail (subway-type) projects, but research
shows that buses transport urban populations more cost-effectively and
are more flexible. State and local governments could still use federal
aid distributed by formula grants for new rail projects, at the
discretion of local officials who best know the community's needs.
Savings: \$12.2 billion over 10 years (\$6.1 billion over five years)

[Eliminate the Essential Air Service]{.underline}

Essential Air Service subsidizes air service in communities with
federally mandated service before deregulation in 1978. The cost per
passenger has gone as high as \$500, but averages around \$200. Given
the proliferation of options, many travelers prefer to drive to a larger
airport where they can find an even better fare than a subsidized flight
from the small community. If small communities consider air service
important, they could provide these subsidies themselves. Savings: \$1.1
billion over 10 years (\$525 million over five years)

[Drop Wealthy Communities from CDBG]{.underline}

The Community Development Block Grant (CDBG) program provides annual
grants to communities to help eliminate slums and promote economic
development. CDBG is open to all urban areas with a population of
50,000, regardless of how many residents are in poverty. The existing
formula actually favors wealthier areas, so this reform would refocus
CDBG grants on needier areas, given that federal funding of community
development may be inappropriate and should certainly be limited.
Savings: \$9.1 billion over ten years (\$4.3 billion over five years)

[Convert the Rural Community Advancement Program to State Revolving
Funds]{.underline}

The Department of Agriculture's Rural Community Advancement Program
(RCAP) helps poor rural communities by providing loans and grants for
water projects and economic development. Establishing state revolving
funds instead would eventually eliminate the need for annual
appropriations, and states could increase their capital by leveraging
the initial federal funding in the private sector. These projects should
be orchestrated by state and local governments, and phasing out federal
funding would ensure needs are met and savings can be achieved in the
long run. Savings: \$4.5 billion over ten years (\$194 million over five
years)

[Eliminate the Neighborhood Reinvestment Corporation]{.underline}

This public, nonprofit organization to revitalize distressed
neighborhoods oversees a network of locally operated groups engaged in
housing and community-building activities. Not only do similar federal
programs exist under HUD, but communities themselves should be funding
the startup and operation of these purely local entities. Savings: \$1.3
billion over ten years (\$600 million over five years)

[Eliminate the Community Development Financial Institutions
Fund]{.underline}

This Treasury Department fund was created in 1994 to expand credit,
investment capital, and financial services in distressed communities.
This is another program that is redundant within the federal government
and belongs at the state and local level. Savings: \$566 million over
ten years (\$270 million over five years)

[Eliminate the Economic Development Administration]{.underline}

EDA provides assistance to rural and urban regions to help generate job
growth in "distressed communities." The President's FY06 Budget called
for cutting EDA funding and consolidating the program with over 15
others that are a duplication of federal economic and community
development programs. Savings: \$2.8 billion over ten years (\$1.1
billion over five years)

[Eliminate the Minority Business Development Agency]{.underline}

MBDA provides funding for various Minority Business Development Centers,
designed to assist minority entrepreneurs get businesses up and running.
This program is duplicative of several other business development
assistance programs offered to all business owners. Savings: \$417
million over ten years (\$161 million over five years)

[]{.mark}

[Eliminate State Grants for Safe and Drug-Free Schools]{.underline}

These grants to states are to discourage violence and the use of illegal
substances such as alcohol, cigarettes, and drugs. States receive SDFSCA
funding on the basis of their school-age population and number of poor
children but statistics suggest programs are ineffective. In addition,
studies show that schools are among the safest places in the country and
relatively drug free. Savings: \$4.8 billion over ten years (\$2.3
billion over five years)

[Eliminate the Even Start Program]{.underline}

The Even Start program funds educational services to parents who have
not finished high school. However, the administrative fees are extremely
high, the program is duplicative and there is no evidence of meaningful
success. This reform would eliminate grants to states and redirect half
of those funds to other federal early childhood education programs.
Savings: \$1.2 billion over ten years (\$592 million over five years)

[Eliminate Teen Funding Portion of Title X Family Planning]{.underline}

HHS reports that 1/3 of Title X clients are teens. The program was
designed in the 1970s to pay for family planning for the poor. Federal
regulations allow teenagers to qualify on their own income as "poor" and
thus qualify for free and reduced-priced contraceptives, including the
IUD, the injection drug Depo-Provera, and the morning-after pill to
teenagers, without any parental involvement or consent. \$286 million is
spent on the program each year, and if 1/3 of funds spent are spent on
teens, that totals \$95 million per year. Savings: \$1.3 billion over 10
years (\$511 million over five years)

[Eliminate the Administrative Fees to Schools]{.underline}

For some college loan programs, the government pays each school to
administer its program and determine the recipients. Schools will
continue to benefit from participating in federal student aid programs
even without the payments, because the aid makes attendance at those
schools more affordable. Costs could alternatively be passed along to
students at around \$5 per loan. Savings: \$1.6 billion over ten years
(\$744 million over five years)

[Eliminate the Leveraging Educational Assistance Program]{.underline}

This program helps states provide matching grants for needy college
students, but is no longer necessary since almost all states operate
programs far larger than the federal contribution. Savings: \$722
million over ten years (\$345 million over five years)

[Eliminate funding for the National and Community Service
Act]{.underline}

AmeriCorps and similar organizations, through federal, state local and
private funding, perform community services like assisting in schools.
Many participants receive a living stipend, health insurance and child
care, making it more like a job than volunteerism. In addition, there is
no income requirement, potentially depriving needy college-bound
students of aid. Savings: \$6.5 billion over ten years (\$3 billion over
five years)

[End the Redistribution of Unused Federal Funds from SCHIP]{.underline}

The State Children's Health Insurance Program (SCHIP) provides health
care coverage to certain uninsured low-income children whose annual
family income is too high for them to qualify for Medicaid. Depending on
the per capita income in a given state, the federal government
reimburses between 65 percent and 85 percent of the state's total SCHIP
spending. This option would leave the basic SCHIP program intact but
would end future redistributions of unspent funds. Recovering unspent
funds from SCHIP would produce budgetary savings for the federal
government with little disruption to most states' plans for providing
health insurance to children from low-income families. Savings: \$1.1
billion over ten years (\$350 million over five years)

[Eliminate Childless Adult Coverage in SCHIP]{.underline}

The State Children's Health Insurance Program provides federal matching
funds to help states expand health care coverage to uninsured children.
Each State administers and sets its own eligibility guidelines for the
program. As of 2003, SCHIP was insuring childless adults in two states
costing at least \$330 million. The program was enacted to provide
health insurance to uninsured children. Savings: \$660 million over ten
years (\$330 million over five years)

[Eliminate Funding for Penile Implants Under Medicare]{.underline}

According to the Medicare National Coverage Determinations Manual,
Medicare will cover the costs of penile implantations under certain
circumstances. Congress should eliminate funding for penile implants.
Savings: \$8 million over ten years (\$4 million over five years)

[]{.mark}

[Tie Rent Subsidies for One Person to Cost of Efficiency
Apartments]{.underline}

Recipients of federal housing assistance typically live either in
subsidized-housing projects or in rental units of their own choosing
found on the open market. This option would link the rent subsidy for
new applicants from one-person households to the cost of an efficiency
apartment rather than a one-bedroom unit (current law). Savings: \$3.1
billion over ten years (\$894 million over five years)

[Eliminate School Lunches for Students Above 350% of
Poverty]{.underline}

The School Lunch Program and the School Breakfast Program provide funds
that enable participating schools to offer subsidized meals to students.
For the 2004-2005 school year the federal subsidy was \$0.21 per full
price lunch and \$0.23 per full price breakfast. This option would
eliminate the breakfast and lunch subsidy for full-price meals for
students whose household income is above 350 percent of the poverty
line, while increasing the subsidy for reduced-price meals (both
breakfast and lunch) by \$0.20. Savings: \$6.7 billion over ten years
(\$3.2 billion over five years)

[Remove Ceiling for Collecting Overpayments from SSI]{.underline}

The federal Supplemental Security Income (SSI) program makes monthly
cash payments to low-income elderly and disabled people. The Social
Security Administration (SSA), which administers the program, sometimes
pays recipients more than it later determines they were entitled to.
Currently, after discovering an overpayment, the SSA can reduce the
recipient's subsequent monthly benefit to recover the excess amount.
This option would remove the ceiling on the amount of overpayments that
the SSA could recover from monthly SSI payments, while retaining the
commissioner's authority to reduce or waive the required amount.
Removing the ceiling would improve the federal government's ability to
recover money paid to recipients erroneously. Savings: \$920 million
over ten years (\$425 million over five years)

[Verify Income of Earned Income Tax Credit Participants]{.underline}

The IRS estimated in 2002 that of the \$31.3 billion in earned income
credits claimed by taxpayers in tax year 1999, about \$8.5 billion to
\$9.9 billion, should not have been paid. This level of noncompliance
has remained relatively unchanged even after a 5-year effort to reduce
it. According to GAO, Congress should require better verification of
incomes and clearly define what constitutes an eligible child. Savings:
\$85 billion over ten years (\$42.5 billion over five years)

[Eliminate Fiscal Assistance to District of Columbia]{.underline}

The Constitution gives the Congress responsibility for overseeing the
District of Columbia, a task that the Congress largely delegated to the
city's government under the Home Rule Act of 1974. However, Congress
reviews and approves the District's proposed annual budgets and
appropriates money to the city each year. In 1997, the federal
government relieved the District government of the cost of a substantial
portion of its budget: criminal justice, Medicaid, and pensions. This
option would eliminate federal fiscal assistance to the District that is
not related to those obligations. Savings: \$1.7 billion over ten years
(\$800 million over five years)

[]{.mark}

[Require IRS to Deposit Fees Collected by Treasury]{.underline}

The 1996 appropriation act for the Department of the Treasury authorized
the IRS to establish or increase fees for some services that it
provides. The IRS has used that authority mainly to charge taxpayers a
fee for entering into payment plans with the agency. This option would
require the IRS to deposit all of its fee receipts in the Treasury as
miscellaneous receipts, eliminating the agency's ability to spend them.
Processing payment plans with taxpayers is an administrative function
directly related to the IRS's mission, and thus is a function for which
the agency already receives appropriations. Savings: \$989 million over
ten years (\$473 million over five years)

[]{.mark}

[Eliminate Presidential Election Campaign Fund]{.underline}

The Presidential Election Campaign Fund provides for public funding of
Presidential elections. It is financed exclusively by voluntary
contributions from U.S. taxpayers, who can choose to earmark \$3 (\$6 on
joint returns) of their annual federal income taxes for the fund. That
money is used to provide matching funds for candidates in Presidential
primaries, grants to sponsor political parties' Presidential nominating
conventions, grants for the general-election campaigns of major party
nominees, and partial funding for qualified minor and new-party
candidates in the general election. This option would eliminate the fund
and stop the flow of public money to Presidential candidates and
political parties. Savings: \$550 million over ten years (\$275 million
over five years)

[Eliminate the Federal Anti-Drug Advertising]{.underline}

The Office of National Drug Control Policy (ONDCP) runs a program to
test print and broadcast advertising, purchase media time, and evaluate
the effects of national media campaigns to discourage the use of illegal
drugs among young people. The agency is required to solicit donations
from nonfederal sources to pay part of the costs of the program. There
is no solid evidence that media campaigns are effective in either
preventing or reducing the use of illegal drugs. Savings: \$1.3 billion
over ten years (\$631 million over five years)

[Eliminate Federal Funding for the Corporation for Public
Broadcasting]{.underline}

CPB, which receives \$400 million annually from Congress, funds the
Public Broadcasting Service at 15% of its annual budget. The other 85%
of PBS' budget comes from viewer donations, local government, and
universities. CPB and PBS continue to use federal funding to pay for
questionable programming, such as a documentary on sex education funded
by the Playboy Foundation. Additionally, much of the programming on PBS,
such as Sesame Street, could bring in enough annual revenues to cover
the loss of federal funding. Savings: \$5.6 billion over ten years
(\$2.2 billion over five years)

[Raise the Threshold for Davis-Bacon Coverage]{.underline}

Since 1935, the Davis-Bacon Act has required that no less than
"prevailing wages" be paid for all federally funded or federally
assisted construction projects with contracts that total \$2,000 or
more. This option would increase the threshold from \$2,000 to \$1
million. The threshold has remained the same for seven decades and
raising it would allow the federal government to spend less on
construction. This would also increase the opportunities for employment
that federal projects might offer less-skilled workers. Savings: \$2.1
billion over ten years (\$1 billion over five years)

[Charge Federal Employees for Parking]{.underline}

The federal government owns or leases more than 200,000 parking spaces,
which it allocates to its employees---in most cases, at no charge. This
would encourage federal employees to use public transportation or to
carpool. That shift would reduce the flow of cars into urban areas,
cutting down on energy consumption, air pollution, and congestion.
Savings: \$1.5 billion over ten years (\$720 million over five years)

[Eliminate Legal Services Corporation]{.underline}

LSC has a long history of legal abuse and fraud, including providing
resources for individuals to sue the government for more generous
federal benefits. Savings: \$4.6 billion over ten years (\$ 1.8 billion
over five years)

[Eliminate High Intensity Drug Trafficking Area Program]{.underline}

This program coordinates drug control efforts among local, state, and
federal law enforcement agencies, providing equipment, technology, and
resources to combat drug trafficking and its consequences in regions of
the United States. Because many of its functions are duplicative, the
Administration requested that its functions be transferred to the
Department of Justice, and the program terminated. Savings: \$3.2
billion over ten years (\$1.2 billion over five years)

[United States Postal Service Revenue Foregone]{.underline}

This program reimburses USPS for prior years' lost revenue from
legislatively mandated reduced rates to non-profit mailers. The
President's 2005 Budget proposed to discontinue this reimbursement.
During the 2005 budget process, the House agreed to discontinue the
reimbursement but the Senate did not. Lowered USPS pension payments more
than compensate the organization for the loss of this small revenue
foregone, and the appropriation should be terminated. Savings: \$598
million over ten years (\$231 million over five years)

[Decline Member Pay Raise]{.underline}

A pay increase for Members of Congress is automatic under existing law
and amendments blocking its enactment were out of order during
appropriations consideration this year. In light of unwarranted fiscal
constraints, Members of Congress could temporarily forgo their pay
increases. Savings: \$24 million over ten years (\$9 million over five
years)

[Reduce BLM Construction]{.underline}

The BLM manages 264 million acres of surface acres of public lands
located primarily in the 12 Western States, including Alaska. The agency
manages an additional 300 million acres of below ground mineral estate
located throughout the country. The President requested that BLM
construction be reduced by 50 percent. Savings: \$83 million over ten
years (\$32 million over five years)

[Reduce Fish and Wildlife Construction]{.underline}

The mission of the Fish and Wildlife Service is to work with others to
conserve, protect and enhance fish, wildlife, and plants and their
habitats for the continuing benefit of the American people. While fish
and wildlife habitat construction may serve an important role, other
pressing federal priorities necessitate a small reduction in funding, as
requested by the Administration. Savings: \$362 million over ten years
(\$140 million over five years)

[Eliminate Funding for Democratic and Republican
Conventions]{.underline}

All told, the parties combined will spend at least \$100 million on
their respective conventions. Some of that cost will be covered by
federal funds \-- \$13.3 million for each of the parties. Savings:
\$53.2 million over ten years (\$26.6 million over five years).
[NOTE]{.underline}: These savings are components of the savings in the
"Eliminate Presidential Election Campaign Fund" item above and are thus
not counted separately in Table 3.

[Eliminate Funding for the National Endowment for the Arts]{.underline}

The NEA funds art programs and initiatives through grants to various
entities. In 2001, America spent \$27 billion on non-profit arts
funding: \$11.5 billion from the private sector; \$14 billion in earned
income (tickets sales, etc.); and \$1.3 billion in combined federal,
state, and local public support (of which \$105 million was from the NEA
(0.39% of total non-profit arts funding)). The funding could easily be
funded by private donations. Savings: \$1.8 billion over ten years
(\$678 million over five years)

[Eliminate the National Endowment for the Humanities]{.underline}

The NEH funds humanities programs and initiatives through grants to
various entities. As with the NEA, the general public benefits very
little from NEA, and it could easily be funded by private donations.
Savings: \$2 billion over ten years (\$769 million over five years)

[Eliminate the Forests Service's Economic Action Programs]{.underline}

Economic Action Programs are designed to assist rural communities with
natural resource management, by working to create natural resource-based
businesses, among other things. The President's FY06 Budget terminated
this program, as it is duplicative of many others currently in
existence. Savings: \$139 million over ten years (\$54 million over five
years)

[Reduce Funds for the Water Quality Cooperative Agreement]{.underline}

The EPA provides grants to state water pollution control agencies, under
the Clean Water Act, to promote prevention of water pollution. The
Administration's proposed budget calls for reducing the program, as it
is duplicative of other programs, including the EPA Water Pollution
Control Grants. Savings: \$209 million over ten years (\$81 million over
five years)

[Reduced Funds for Bureau of Indian Affairs School
Construction]{.underline}

BIA operates 184 schools in 23 states, and the President committed \$1
billion to help restore these schools over the last few years. The
Administration's proposed budget calls for the decreased funding,
reflecting the successful completion of the project. Savings: \$501
million over ten years (\$194 million over five years)

[Reduce Funding for Forest Service Capital Improvements]{.underline}

The Capital Improvement and Maintenance program is designed to provide
funding for general maintenance of the National Forest System. The
Administration's proposed budget calls for reduced funding, as a large
number of Forest Service buildings have been closed, and various other
government agencies are capable of providing this service. Savings:
\$835 million over ten years (\$323 million over five years)

[Reduce Funds for the NRCS Operations]{.underline}

Natural Resources Conservation Service Conservation's Conservation
Operations funds the administrative costs for state and local personnel,
which provide conservation technical assistance to the various local
entities. The Administration's budget called for a decrease in funding
and requested a request that no congressional earmarks be added to
program's account. Savings: \$362 million over ten years (\$140 million
over five years)

[Reduced Funding for Waste Disposal Grants]{.underline}

These programs are designed to provide funding for water and wastewater
treatment facilities to rural communities. The Administration's budget
requested reduced funding for these grants because of decreases costs to
rural communities in light of low interest rates. Savings: \$1.6 billion
over ten years (\$624 million over five years)

[Reduce Funding for the Cooperative State Research and
Education]{.underline}

CSRE provides funding for research, education, and extension activities
in the Land-Grant University System and other partner organizations.
Savings: \$1.5 billion over ten years (\$592 million over five years)

[Eliminate Rural Empowerment Zone Grants]{.underline}

These grants are designed to revitalize distressed communities through
economic and physical development partnerships with local and state
governments to create long-term economic and community development.
However, communities already receive substantial flexible grant dollars
to assist with these efforts and the President proposed to terminate
these grants. Savings: \$139 million over ten years (\$54 million over
five years)

[Eliminate Citrus Canker Compensation]{.underline}

Citrus Canker is a bacterial disease of citrus that causes premature
leaf and fruit drop. This program compensates citrus farmers who have
lost their citrus trees due to citrus canker. This is not a priority in
federal funding. Savings: \$139 million over ten years (\$54 million
over five years)

[Reduce DOE Environmental Management]{.underline}

In 1989, the Department of Energy created the Office of Environmental
Management (EM) to mitigate the risks and hazards posed by the nuclear
weapons production and research. Minor funding reductions of this
program will produce significant overall savings while having minimal
negative impact on program operation. Savings: \$5.6 billion over ten
years (\$2.2 billion over five years)

[Eliminate the Appalachian Regional Commission]{.underline}

The Appalachian Regional Commission is a federal-state partnership that
provides funding for several hundred development and highway projects
throughout the Appalachian Region. Elimination of the Appalachian
Regional Commission would produce significant savings, and the program
itself is unnecessary and duplicative. Dozens of other federal, state,
and local programs exist to encourage development and provide funding
for local highway and infrastructure projects. Savings: \$543 million
over ten years (\$210 million over five years)

[Eliminate Denali Commission]{.underline}

The Denali Commission, created by Congress in 1998, provides job
training and other economic development assistance to distressed rural
areas in Alaska. Elimination of this commission would produce savings,
and the program itself is unnecessary and duplicative. Dozens of other
federal, state, and local programs exist to provide job training and
economic development advice and assistance in Alaska and across the
nation. Savings: \$42 million over ten years (\$16 million over five
years)

[Eliminate Native Hawaiian Funding]{.underline}

The FY06 Labor/HHS appropriations bill contained earmarks for as much as
\$40 million for various health and education programs for Native
Hawaiians, although other programs allow funds to flow to them. Native
Hawaiians are a racial group not a tribe and dispensing benefits to them
would likely be subject to strict scrutiny in Federal courts. Savings:
\$557 million over ten years (\$215 million over five years)

[Level Funding to Community Health Centers]{.underline}

This reform would Level funding for these federal grants to help
medically underserved populations.  These programs should be funded
locally, not with federal dollars.  Savings: \$1.4 billion over ten
years (\$538 million over five years)

[Reduce Funding for the Centers for Disease Control]{.underline}

Under the House-passed appropriation level, the CDC's funding increased
25% over last year, a significant infusion given the current fiscal
situation. Savings: \$25 billion over ten years (\$9.7 billion over five
years)

[Reduce Funding for the Airport Improvement Program]{.underline}

This program offers federal assistance for expanding or refurbishing
airports, usually with a 20% local match. Many of these projects can
safely be delayed or if states choose, they can fund them immediately.
Funding could be reduced to the Administration's request. Savings: \$8.3
billion over ten years (\$3.2 billion over five years)

> **[Title IV: Containing the Federal Bureaucracy]{.smallcaps}**

**Table 4: Summary of Savings in Title IV**

(Savings from Baseline, in Millions of Dollars)

5-year 10-year

2006 savings savings

  ------------------------------------- -------- ------------- ------------
  Eliminate Attaché Positions in the    -46      -247          -640
  Foreign Agricultural Service                                 

  Reduce Funding for Department of      -6       -28           -57
  Education Administration                                     

  Level Funding DOE Departmental        -15      -81           -209
  Administration Funding                                       

  Level Funding for FAA Operations      -329     -1,770        -4,578

  Level Funding for Treasury            -31      -167          -432
  Departmental Offices                                         

  Level Funding for the Federal         -552     -2,970        -7,681
  Building Fund                                                

  Level Funding for OMB                 -9       -48           -125

  Level Funding for Agriculture         -20      -108          -278
  Building and Facilities                                      

  Reduce Funding for the Agriculture    -62      -334          -863
  Research Service                                             

  Level Funding for GSA                 -108     -581          -1,500

  **SUBTOTAL: Federal Bureaucracy**     -1,178   -6,334        -16,363
  ------------------------------------- -------- ------------- ------------

[Eliminate Attaché Positions in the Foreign Agricultural
Service:]{.underline}

At 97 worldwide offices, agricultural attachés provide farmers and
agriculture produce traders with information regarding the foreign trade
market environment, including foreign government's policies, supply and
demand conditions, and market opportunities. This large information
collection outfit primarily benefits private traders, who could pay for
the same services themselves. Savings: \$640 million over ten years
(\$247 million over five years)

[Reduce Funding for Department of Education Administration]{.underline}

According to the Department of Education, Office of the Chief Financial
Officer, the Department spent an average of \$6 million annually over
five years to pay for its employees to attend education conferences,
including conferences in Hawaii. By cutting down on costs associated
with these trips, the Department could greatly reduces its
administrative budget. Savings: \$57 million over ten years (\$28
million over five years)

[Level DOE Departmental Administration Funding]{.underline}

This reform would fund DOE administrative accounts at the FY05 level.
Savings: \$209 million over ten years (\$81 million over five years)

[Level Funding for FAA Operations]{.underline}

The Federal Aviation Administration's (FAA) mission is to promote
aviation safety and mobility by building, maintaining, and operating the
nation\'s air traffic control system; overseeing commercial and general
aviation safety through regulation and inspection; and providing
assistance to improve the capacity and safety of our airports. The FAA
has encountered numerous cost overruns and delays in modernizing its
nationwide network, and experienced significant challenges in reforming
its organizational culture. Savings: \$4.6 billion over ten years (\$1.8
billion over five years)

[Level Funding for Treasury Departmental Offices]{.underline}

In light of recent fiscal constraints, this reform would recoup savings
by freezing the growth of bureaucracy at DOT. Savings: \$432 million
over ten years (\$167 million over five years)

[Level Funding for the Federal Building Fund]{.underline}

FBF is a revolving fund that finances the operating and capital costs
associated with the federal building inventory. It receives revenue
deposits from rent payments charged to federal agencies occupying GSA\'s
office space and congressional appropriations. In light of current
fiscal constraints, new construction and repairs on federal buildings
should be curtailed, and this account level funded. Savings: \$7.7
billion over ten years (\$3 billion over five years)

[Level Funding of the Office of Management and Budget]{.underline}

OMB's mission is to assist the President in overseeing the preparation
of the federal budget and to supervise its administration in Executive
Branch agencies. In helping to formulate the President's spending plans,
OMB evaluates the effectiveness of agency programs, policies, and
procedures, assesses competing funding demands among agencies, and sets
funding priorities. As such, the OMB is well suited to find cost savings
in their budget and carry out its mission at level funding. Savings:
\$125 million over ten years (\$48 million over ten years)

[Level Funding for Agriculture Buildings and Facilities]{.underline}

This reform would provide level funding for agriculture buildings and
facilities maintenance accounts. Savings: \$278 million over ten years
(\$108 million over five years)

[Reduce Funding for the Agriculture Research Service]{.underline}

ARS is the internal research agency for the USDA. The program works
consistently with universities and other outside entities to develop and
expand agriculture research. This is a function the private sector can
and does perform. Savings: \$863 million over ten years (\$334 million
over five years)

[Level Funding for the General Services Administration
(GSA)]{.underline}

The GSA is the primary federal real property and asset management
agency. GSA is also responsible for identifying and completing needed
repairs to the federal buildings it manages. Many of these projects can
be delayed in light of more pressing federal responsibilities and
priorities. Savings: \$1.5 billion over ten years (\$581 million over
five years)

> **[Title V: Eliminating Corporate Welfare]{.smallcaps}**

**Table 5: Summary of Savings in Title V**

(Savings from Baseline, in Millions of Dollars)

5-year 10-year

2006 savings savings

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

  ---------------------------------------- ------ -------- ----------- ---------
  Eliminate the Applied Research for       -314            -1,959      -4,202
  Renewable Energy Sources Program                                     

  Eliminate the Clean Coal Technology      -50             -259        -543
  Program                                                              

  Eliminate the FreedomCAR Program         -163            -845        -1,774

  Eliminate the Research Initiative for    -300            -1,100      -2,100
  Future Agriculture Systems                                           

  Eliminate the Export-Import Bank and     -84             -616        -1,507
  OPIC                                                                 

  Limit the Repayment Period of Export            -147     -735        -1,470
  Credit Guarantees                                                    

  Impose a Fee on the GSEs Investment             -1,624   -8,762      -19,885
  Portfolio                                                            

  Require GSEs to Register with the SEC           -490     -1,250      -2,710
  and Pay Fees                                                         

  Eliminate the ITA\'s Trade Promotion            -401     -2,125      -4,579
  Activates                                                            

  Eliminate the Advanced Technology               -139     -721        -1,523
  Program                                                              

  Eliminate the Hollings Manufacturing            -110     -573        -1,210
  Extension Partnerships                                               

  Repeal the Continued Dumping and Subsidy        -1,300   -3,000      -4,500
  Offset Act                                                           

  Eliminate the Foreign Market Development        -24      -160        -335
  Program                                                              

  Eliminate the Market Access Program             -3       -231        -531

  Eliminate the Export Enhancement Program        -28      -151        -390

  Eliminate the Hydrogen Fuel Initiative          -183     -985        -2,547

  **SUBTOTAL: Corporate Welfare**                 -5,280   -23,472     -49,806
  ---------------------------------------- ------ -------- ----------- ---------

[Eliminate the Applied Research for Renewable Energy Sources
Program]{.underline}

The Applied Research for Renewable Energy Sources program funds research
and development of renewable sources of energy, including developing
alternative liquid fuels from biomass. However, such research is already
subsidized through the tax code, and the development of applied energy
technology is not necessarily a proper role for the federal government.
Savings: \$4.2 billion over ten years (\$2 billion over five years)

[Eliminate the Clean Coal Technology Program]{.underline}

The Clean Coal Technology program provides government financing for new
coal technology research and development. The private sector has a
competitive incentive to conduct this research and develop these
technologies and would continue to move forward without government
support. For example, GE is currently running privately funded TV
commercials on network, advertising their coal technology advancements.
Savings: \$543 million over ten years (\$259 million over five years)

[Eliminate the FreedomCAR Program]{.underline}

FreedomCAR is a federal energy program to develop energy efficient cars
and trucks, an effort already underway by the private sector responding
to market incentives. For example, foreign automakers, Honda and Toyota,
are beginning to roll out fuel-cell powered vehicles in certain areas.
Savings: \$1.8 billion over ten years (\$845 million over five years)

[Eliminate the Research Initiative for Future Agriculture
Systems]{.underline}

Created in 1998, the initiative funds research in food safety and human
nutrition. Federal funding for agricultural research and new
technologies is not a priority at this time, and the private sector is
more than equipped to fund such potentially profitable research.
Savings: \$2.1 billion over ten years (\$1.1 billion over five years).

[Eliminate the Export-Import Bank and OPIC]{.underline}

Though intended to promote U.S. exports and overseas investment with
loans and insurance, the Export-Import Bank and Overseas Private
Investment Corporation serve companies which are more than capable of
turning a profit. Savings: \$1.5 billion over ten years (\$616 million
over five years)

[Limit the Repayment Period of Export Credit Guarantees]{.underline}

This is a program that ensures U.S. companies will not lose money if
foreign companies, who buy U.S. goods, default on loans. A Government
Accountability Office report found little evidence that this program
provides measurable income and employment benefits to the U.S.
agricultural sector. Savings: \$1.5 billion over ten years (\$735
million over five years)

[Impose a Fee on the GSEs Investment Portfolio]{.underline}

Government-sponsored enterprises (GSEs), private financial institutions
chartered by the federal government, are intended to increase the
availability of credit for specific purposes, such as housing and
agriculture. Four GSEs\--Fannie Mae, Freddie Mac, Farmer Mac, and the
Federal Home Loan Bank System\--have used their special borrowing status
to acquire and hold large portfolios of securities. This option would
impose a fee of 10 basis points (10 cents per \$100 of investments) on
the GSEs' average daily investment portfolios. This would promote
competition in financial markets and recover some of the federal subsidy
retained by those enterprises without reducing their capacity to achieve
their public mission. Savings: \$19.9 billion over ten years (\$8.8
billion over five years)

[Require GSEs to Register with the SEC and Pay Fees]{.underline}

Government-sponsored enterprises (GSEs)\--private financial institutions
chartered by the federal government\--are intended to promote the flow
of credit to targeted uses, primarily housing and agriculture. Four
GSEs, Fannie Mae, Freddie Mac, the Federal Home Loan Bank System, and
the Farm Credit System, are exempt from provisions of the Securities Act
of 1933, which requires publicly traded companies to register the
securities they issue with the SEC (a fifth GSE, Farmer Mac, is already
subject to SEC requirements.). This option would repeal those GSEs'
exemption from SEC rules, requiring them to pay registration fees and to
disclose information about their securities. This would help level the
playing field between the GSEs and other firms that issue securities,
including issuers of mortgage-backed securities (MBSs). Savings: \$2.7
billion over ten years (\$1.3 billion over five years)

[Eliminate the ITA's Trade Promotion Activities]{.underline}

The International Trade Administration operates a program designed to
encourage trade by assessing the competitiveness of U.S. industries and
promoting U.S. exports, a function that should be the responsibility of
the private sector. Savings: \$4.6 billion over ten years (\$2.1 billion
over five years)

[Eliminate the Advanced Technology Program]{.underline}

ATP provides research and development grants to various companies and
entities to encourage technology development and advancement. ATP gives
approximately \$150 million annually to private sector companies for
their research. Numerous Fortune 500 companies have been the recipient
of these federal funds, including IBM, General Electric, 3M, and
Motorola. Savings: \$1.5 billion over ten years (\$721 million over five
years)

[Eliminate the Hollings Manufacturing Extension
Partnerships]{.underline}

HMEP runs manufacturing extension centers designed to assist small- to
medium-sized firms improve their business by providing management
training and various other assistance to the firm. Although these
centers are not government owned, Congress continues to provide them
with federal funding. The services provided by HMEP are widely available
from a variety of sources, including private entities, libraries, the
internet, and many state and local seminars and training programs.
Savings: \$1.2 billion over ten years (\$573 million over five years).

[Repeal the Continued Dumping and Subsidy Offset Act]{.underline}

U.S. antidumping laws allow for the imposition of duties when it is
determined that imports are being subsidized by the producer's
government (a practice known as dumping). The Continued Dumping and
Subsidy Offset Act passes on the revenues received from the collection
of such duties to the domestic producers who petitioned for them.
However, this is a duplicative remedy since the duties themselves are
meant to address the dumping, and it gives domestic producers an
incentive to submit more and more dumping petitions to the Commerce
Department. Savings: \$4.5 billion over ten years (\$3 billion over five
years)

[Eliminate the Foreign Market Development Program]{.underline}

The Foreign Market Development Program promotes the export of U.S.
agricultural products, a function that could be handled by the private
sector businesses that directly benefit. Government efforts to support
exports often distort the allocation of economic resources and impose
costs that exceed their benefits. Savings: \$335 million over ten years
(\$160 million over five years).

[Eliminate the Market Access Program]{.underline}

This program subsidizes exporters looking for foreign markets, a
function that could be performed by the private sector. Opportunities to
sell U.S. commodities abroad are already strong, raising the question of
why taxpayers should have to fund the marketing of name-brand products.
Savings: \$531 million over ten years (\$231 over five years).

[Eliminate the Export Enhancement Program]{.underline}

EEP provides cash to exporters as bonuses, encouraging the exporters to
sell U.S. products in certain counties at prices below the exporter's
costs of acquiring them. The program provides unnecessary assistance to
private corporations in their attempt to offer the lowest price on
commodities in other counties. Savings: \$390 million over ten years
(\$151 million over five years)

[Eliminate Hydrogen Fuel Initiative]{.underline}

The Hydrogen Fuel Initiative, unveiled by President Bush in his 2003
State of the Union Address, is a new \$720 million research and
development initiative for hydrogen as a transportation fuel, aimed at
developing the technologies and infrastructure to produce, store, and
distribute hydrogen for use in fuel cell vehicles and electricity
generation. Elimination of this initiative will produce significant
overall savings. Furthermore, private industry is better equipped to
develop future fuel technologies within the free market. Savings: \$2.5
billion over ten years (\$985 million over five years)

> **[Title VI: Rational Reforms to Defense and Homeland
> Security]{.smallcaps}**

**Table 6: Summary of Savings in Title VI**

(Savings from Baseline, in Millions of Dollars)

5-year 10-year

2006 savings savings

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

  ----------------------------------------- ------ -------------- ---------
  Speed the Sale of Old and Excess Naval    -23    -178           -444
  Vessels                                                         

  Consolidate the Military Exchanges        -76    -796           -1,882

  Close the Domestic Dependent School       18     -126           -788
  System                                                          

  Reduce DOD Administrative Accounts        -10    -50            -100

  Restrict First-Responder Grants to        -630   -3,260         -6,826
  At-Risk Communities                                             

  Introduce HSAs as a TRICARE Option        -20    -807           -2,367

  **SUBTOTAL: Defense and Homeland          -741   -5,217         -12,407
  Security**                                                      
  ----------------------------------------- ------ -------------- ---------

[Speed the Sale of Old and Excess Naval Vessels]{.underline}

The sale, lease, or grant of excess naval vessels to other nations must
be authorized by Congress if the vessel is over 3,000 tons or less than
20 years of age. Other older defense articles, such as military jets and
tanks, can be sold by simply notifying Congress. The delay that
Congressional authorization creates costs an estimated \$4 million per
ship to mothball and store. Savings: \$444 million over ten years (\$178
million over five years)

[Consolidate the Military Exchanges]{.underline}

The Pentagon operates three separate military exchanges, the Army and
Air Force exchange, the Navy exchange, and the Marine Corps exchange.
Consolidating these three exchanges into one would eliminate
inefficiencies from duplicative purchasing, different personnel
departments, warehouse and inventory systems, and management
headquarters while retaining the current ability for service members and
their families receive a wide selection of goods at a low price.
Savings: \$1.9 billion over ten years (\$796 million over five years)

[Close the Domestic Dependent School Systems]{.underline}

The Pentagon operates special elementary and secondary schools on
several domestic bases *in the United States*. This system is separate
from the one in operation for military children overseas. This provision
would phase out these domestic schools over time and shift these
military children into the local public school systems. These programs
date to the time of segregation when public schools in the South did not
serve an integrated military, and most military bases nationwide do not
currently contain such schools. Savings: \$788 million over ten years
(\$126 million over five years)

[Reduce DOD Administrative Accounts]{.underline}

According to GAO, the Pentagon failed to collect refunds on \$100
million worth of unused, refundable flight tickets purchased, which
totaled \$100 million from 1997-2003. As a result, its administrative
account would be reduced by \$10 million annually over the next five
years to encourage the Pentagon to collect such items and impose more
stringent controls. Savings: \$100 million over 10 years (\$50 million
over five years)

[Restrict First-Responder Grants to Large, At-Risk
Communities]{.underline}

Homeland Security grants help local governments prepare for terrorism.
Grants are available to all communities and each state is guaranteed
.75% of the total. First-responder grants should be reserved for likely
targets of terrorism and a funding floor should not exist. There are
many reports of waste and abuse in small communities whose homeland
security needs are not obvious. For the same reason, significant funding
remains unspent. In the past year, numerous reports have exposed large
sums of homeland security funding was being spent on such items as
air-conditioned garbage trucks, bulletproof dog vests for canine corps,
Segways for a bomb squad, and the transportation of riding lawn mowers
to an annual lawnmower drag race. Revising the formula to emphasize risk
would ensure limited federal resources are used more effectively.
Savings: \$6.8 billion over ten years (\$3.3 billion over five years)

[Introduce Health Savings Accounts as a TRICARE Option]{.underline}

Under the Department of Defense's health care plan, TRICARE, military
personnel would have *the option* of receiving a cash allotment to
purchase a less comprehensive health care plan and keep the remaining
cash or remain in their current plans. The less comprehensive plan would
encourage individuals to be more cost-conscious when purchasing health
care products by including deductibles, copayments, and a maximum annual
out-of-pocket expenditure limit. Savings: \$2.4 billion over ten years
(\$807 million over five years)

**Total Savings**

**Table 7: Summary of Total Savings**

(Savings from Baseline, in Millions of Dollars)

5-year 10-year

2006 savings savings

\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_\_

  ----------------------------------- -------------- -------------- --------------
  Title I: Tough Choices for Tough    -70,711        -193,017       -526,096
  Times                                                             

  Title II: Restraining Foreign Aid   -2,652         -14,594        -37,822

  Title III: Reprioritization of      -21,530        -127,265       -307,180
  Federal Spending                                                  

  Title IV: Containing the Federal    -1,178         -6,334         -16,363
  Bureaucracy                                                       

  Title V: Eliminating Corporate      -5,280         -23,472        -49,806
  Welfare                                                           

  Title VI: Rational Reforms to DOD   -741           -5,217         -12,407
  and DHS                                                           

  **TOTAL**                           **-102,092**   **-369,899**   **-949,674**
  ----------------------------------- -------------- -------------- --------------