10 policies Republicans could use to pay for new tax cuts

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Advisers to President-elect Donald Trump and congressional Republicans have begun floating proposals to boost federal revenue and slash spending so their plans for major tax cuts and new security spending won’t further explode the $36.2 trillion national debt.

That historic tide of red ink is raising concerns that major new borrowing could send federal interest payments soaring, slow economic growth and spike inflation. But with most of Trump’s 2017 tax cuts set to expire at the end of 2025, the GOP plan to extend the law could increase the debt by close to $5 trillion over the next decade. (Nonpartisan scorekeepers project that Trump’s entire campaign platform would add up to $15 trillion to future borrowing.)

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To avoid busting the budget, Republican leaders are counting on savings from spending cuts and new revenue from tariffs.

Here are 10 policies that Trump and Republicans have floated to pay for their tax and spending priorities, the revenue or savings they are projected to generate over the next decade, and what economists say they would mean for the economy.

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Impose new tariffs: $2.7 trillion

“To me,” Trump said at a news conference in late December, “tariff’s the most beautiful word in the dictionary.” Trump campaigned on new tariffs on all imports, plus additional levies on Chinese imports. He has also threatened additional tariffs in recent weeks on products from Mexico – the United States’ largest trading partner – and Canada.

Tariffs could raise a significant amount of revenue. The Committee for a Responsible Federal Budget projected during the campaign, before Trump pitched additional tariffs on North American trading partners, that they could bring in $2.7 trillion over 10 years.

But much of that would be paid by U.S. consumers, most economists say, rather than foreign countries. That’s because importers usually pass the cost of tariffs along by raising the prices of their goods. In response, domestic producers often raise prices to increase profit margins. And U.S. producers may face retaliatory tariffs from other countries, driving up the cost of domestic production and leading employers to cut costs at home.

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Repeal clean energy programs: $700 billion

The Inflation Reduction Act of 2022 was one of President Joe Biden’s chief legislative victories and the largest investment to fight the climate crisis in U.S. history. Trump and congressional Republicans have taken aim at the law to unwind much of Biden’s legacy and spur domestic fossil fuel production.

Among the moves that could raise revenue: revoking the law’s $7,500 electric vehicle tax credit, new vehicle emissions rules and other incentives for clean energy production. Trump and the GOP could also green-light a major expansion of energy production on protected federal lands. Together, the CRFB projected, that could produce $700 billion in cost savings and new revenue over the next decade.

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Cut ‘unauthorized’ programs: $516 billion

Before Congress spends money, it is supposed to “authorize” that spending by passing a separate law that sets policy priorities for the funding. But that practice has mostly gone extinct in recent years, as stand-alone spending laws have come to dominate congressional policymaking.

The shift has resulted in a giant pot of money that has been appropriated but not explicitly authorized. The leaders of Trump’s “Department of Government Efficiency,” or DOGE, have signaled plans to claw back at least some of that funding. But spending for a number of vital programs is not explicitly authorized, according to the Congressional Budget Office, including veterans’ health care, the State and Justice departments, and NASA. Nixing all unauthorized spending would yield $516 billion, according to the CBO.

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Cancel student loan forgiveness: $275 billion

Biden’s repeated attempts to forgive federal student loans have been struck down by various courts. His latest attempt still stands, pending other legal challenges, and reversing it could save $275 billion over 10 years, according to the CRFB.

Trump also could repeal a rule that cancels student debt for borrowers facing economic hardship and another that cancels some debt interest payments. Congress also could limit presidential authority to unilaterally forgive student loans, which the CRFB projects would save another $30 billion.

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Eliminate the Education Department: $200 billion

Trump campaigned on eliminating the U.S. Education Department and diverting much of its resources to state and local education officials. But even without a Cabinet department, eliminating all of the agency’s spending would be almost impossible: Local jurisdictions around the country rely on billions of dollars annually to support low-income students and low-performing schools.

Preserving that money while cutting the Education Department could net $200 billion in savings over 10 years, according to the CRFB.

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Cut food stamp benefits: $180 billion

In 2021, the Biden administration unilaterally implemented the largest increase in nutrition assistance benefits in U.S. history, a move hailed by anti-poverty advocates. Slashing that expansion could save $180 billion over the next decade, the CRFB found.

Trump and Republicans would have other options, too. Phasing in cuts to food assistance could save around $110 billion, the CRFB projects. Legislation preventing future benefits increases similar to the one Biden enacted would save another $40 billion.

Finally, The Washington Post reported in November that stricter work requirements also are under consideration. That could save another $11 billion, according to the CBO.

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Impose Medicaid work requirements: $109 billion

Medicaid, the public health insurance program for low-income individuals, does not have a work requirement. In his first administration, Trump issued waivers allowing 13 states to implement work requirements (only one state ultimately followed through), but Biden rescinded that policy.

Reversing Biden’s action would reduce federal spending by another $30 billion, according to the CRFB. Meanwhile, The Post reported in November that Republicans are considering a national Medicaid work requirement. That could save $109 billion, the CBO reported in 2023, but it also could kick tens of thousands of people off health insurance.

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Withhold anti-obesity drugs: $40 billion

In November, Biden proposed a rule to require Medicare and Medicaid to cover the cost of anti-obesity medications, such as Ozempic, Wegovy, Mounjaro and Zepbound. Blocking that rule, according to the CRFB, would claw back $40 billion over 10 years.

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End child tax credit for noncitizens: $20 billion

The child tax credit played a major role in the 2024 campaign, and Congress came very close to passing legislation in August to expand it. Currently, the CTC gives all parents a tax break for taking care of their children, including noncitizens with children who are U.S. citizens. The amount of the credit increases as recipients earn more income (up to a certain threshold), a design that’s supposed to encourage work.

Congress could change CTC eligibility to require both parents and children to have Social Security numbers. That would prevent many immigrant families from accessing the tax credit, reducing federal spending by $20 billion, according to the CRFB.

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Cut IRS funding: -$65.8 billion

Biden’s Inflation Reduction Act pumped an extra $80 billion into the Internal Revenue Service to increase scrutiny of wealthy taxpayers and major corporations, as well as to improve customer service. Republicans have so far rescinded $20 billion – and they want to cut more.

By reducing collections from tax cheats, those cuts would actually cost more than they save: The CBO projected last year that stripping $20 billion from the IRS would increase the national debt by $65.8 billion.