CBO Director Douglas Elmendorf last week outlined ideas on restoring the federal budget to health, which could include less generous benefits for federal civilian and military retirees in addition to cuts in veterans' benefits. The comments were posted on the Director's Blog. Elmendorf said the government could "substantially reduce" its role in other areas including defense, unemployment compensation, transportation and health research.
CBO is a nonpartisan office that does not make specific policy recommendations to lawmakers.
Specifically, Elmendorf said the government must deviate from the policies of the past 40 years in at least one of the following ways:
- Increase federal revenues significantly above their average share of gross domestic product;
- Implement major changes to benefits, including Medicare and Medicaid, for seniors;
- Substantially reduce its role in areas such as vets' benefits and federal employees' pensions.
A March CBO report on reducing the deficit included several proposals that would alter federal pay and benefits, including:
- Smaller annual pay increases for federal civilian workers and military personnel
- An increase in medical cost-sharing for military retirees who are not yet eligible for Medicare
- A decrease in TRICARE health benefits for military retirees and their dependents
- A voucher plan to help slow the growth of federal contributions to the Federal Employees Health Benefits Program
- An end to enrollment in Veterans Affairs Department medical care for vets in priority groups 7 and 8