Budget Blueprint for Fiscal Year 2023
The Heritage Foundation's Budget Blueprint:
Going on Offense on America’s Most Important Challenges

America was founded with an unshakable faith in what a free and virtuous people can build. The Founding Fathers knew that a nation of free and virtuous people would naturally create opportunities that lift all people and spur the innovation that fulfills the promise of a better tomorrow. They gave us a constitutionally bounded federal government empowered to promote the common good by preserving the God-given rights of the people.

Though a rare view at the time, the faith of the Founders proved true through countless trials during the last quarter-millennia. The experiment they created rose to become a beacon of hope and prosperity for the world.

The budget of the federal government is more than a list of line items and charts: It is a statement of the values of its drafters. The Heritage Foundation’s Budget Blueprint for Fiscal Year 2023 is a representation of Heritage’s proud commitment to those values and the fight to save America.

Unfortunately, many who have wielded the power of the federal government have sought to reap the benefits of free enterprise while rejecting the principles that created it. They have bloated the government, consumed more and more of the resources and wealth generated by the American people, and sought to regulate and micromanage the American public.

These leaders chose to take on a staggering amount of debt, squandering trillions of dollars on projects and programs designed to yield political benefits rather than benefitting the public within the core constitutional responsibilities of the federal government.1 The cost and regulatory burdens of the federal government harm our nation, injecting politics into the most important aspects of American civil life and eroding communities and liberty. Further, the unsustainable financing of major benefit programs and current debt level will, left unaltered, force a crippling tax burden that would rob the U.S. of cherished economic vitality.2

The waning of the COVID-19 pandemic should be an inflection point for legislators to shift from federal largesse to fiscal responsibility.3 Instead, Congress and the Biden Administration are using the crisis to push for a permanently draconian federal government, one that seizes and controls endlessly increasing amounts of national resources.4

In light of the stark choice before the American people, the Heritage Foundation’s Budget Blueprint provides legislators with a wide array of policy recommendations to return to the limited and responsible government the Constitution envisions. These proposals provide solutions to America’s most important challenges and would:

  • Reverse the growth of spending and inflation: Government spending, regulations, and inflation are a tax on all Americans, especially working families who struggle to make ends meet. Inflation has hit rates not seen in four decades, fueled by the federal government pumping trillions in new government spending into the economy with help and financing from the Federal Reserve and its printing press—all while restricting the supply of vital goods and services through regulations and government distortions. This Blueprint would reverse the growth of spending and other policies that are wreaking havoc on the economy.
  • Protect natural rights: Legislators should ensure the federal government respects and preserves the rights of the people. This includes maintaining vital appropriations provisions that protect important values and restraining executive branch bureaucrats.
  • Restore federalism and decentralization: The United States was designed to have most policymaking take place at the state and local level, where laws can be tailored to the needs and preferences of citizens. The continued expansion of the federal government leads to the imposition of one-size-fits-all policies, producing discontent and inefficiency. Devolving inappropriate federal activities to state and local governments would lower the stakes in federal elections and restore vital civic virtues.
  • Reform:Modest adjustments made to major programs in the near term can lead to large savings over time, and, more importantly, better outcomes for those who rely on them.
  • Enable private initiative: Many federal programs, whether by design or by accident, crowd out or micromanage private activity. This reduces the space for individual flourishing and personal choice. Removing the tentacles of the federal leviathan from areas in which they do not belong would enhance both civil society and the economy.
  • Improve oversight and accountability: A federal government that attempts to do everything for everyone will inevitably do few of those things well. Congress struggles to provide sufficient oversight of the sprawling federal apparatus, and the public struggles to know who should be held responsible for substandard results. Limiting the federal role would improve oversight and make government transparent and accountable to voters.
  • Promote the common good and general welfare: Government exists to preserve life, liberty, and property, and it is instituted to protect the rights of individuals according to natural law. As such, a government that promotes the common good and general welfare, properly understood, secures the blessing of liberty for all Americans by protecting the sanctity of life; the freedoms of speech, religion, the press, and assembly; the right to bear arms; the right of individuals to be treated equally and justly under the law; and the right to enjoy the fruits of one’s labor.

Many of America’s political leaders have repeatedly and deliberately chosen political expediency over the public interest by tolerating, enabling, or actively supporting the unrestrained growth of federal spending. Over time, staving off the serious consequences of that spending growth becomes difficult, if not impossible. The consequences of this growth include permanently slower economic growth, sharp benefit cuts, inflationary pressures, and even the haunting specter of a debt crisis.

The prospect of a constitutionally limited federal government will lead to backlash from the many special interests that attach themselves like barnacles to the ship of state. However, it is vital for legislators to prioritize the needs of the nation as a whole—rather than the political and lobbyist class that has metastasized in Washington, D.C.

It is not too late to change course. If elected officials and the American public respond to the looming threat of federal overspending and debt, legislative reforms can put the federal government on a path to both financial and democratic health and stability.

Endnotes

[1] Richard Stern, “Clean Debt-Limit Suspension Is a Blank Check for Ever-Expanding Government,” Heritage Foundation Issue Brief No. 5214, September 20, 2021, https://www.heritage.org/debt/report/clean-debt-limit-suspension-blank-check-ever-expanding-government.

[2] Rachel Greszler, “Seven Hard Truths Americans Should Know About Social Security in 2021—And Five Ways to Strengthen Social Security,” Heritage Foundation Issue Brief No. 5212, September 3, 2021, https://www.heritage.org/social-security/report/seven-hard-truths-americans-should-know-about-social-security-2021-and-five, and Robert Moffit, “Democrats' $3.5 Trillion Spending Spree Would Be Hazardous to Medicare's Financial Health,” Heritage Foundation Commentary, October 1, 2021, https://www.heritage.org/medicare/commentary/democrats-35-trillion-spending-spree-would-be-hazardous-medicares-financial.

[3] David Ditch ed., “Digging Out of the Hole: A Blueprint for a Responsible Post-COVID-19 Budget,” Heritage Foundation Special Report No. 238, December 1, 2020, https://www.heritage.org/sites/default/files/2020-12/SR238.pdf.

[4] David Ditch et al., “President Biden's Tax-and-Spend Plan Expands Federal Power, Not Jobs,” Heritage Foundation Backgrounder No. 3618, May 11, 2021, https://www.heritage.org/budget-and-spending/report/president-bidens-tax-and-spend-plan-expands-federal-power-not-jobs.

The Heritage Foundation's Budget Blueprint for Fiscal Year 2023 is a comprehensive proposal to right-size the federal government so that freedom, opportunity, prosperity, and civil society can flourish.

Reversing the Growth of Government Spending and Inflation

  • Includes more than 230 specific policy reforms to roll back excessive government spending, prioritize taxpayer dollars, reform major entitlement programs, restore federalism, promote opportunity for all, and protect rights and American values.
  • Reduces government spending by $15.5 trillion during the FY 2023–FY 2032 period, compared to current law.
  • Ensures the federal budget is sustainable, reducing the size, scope, and reach of the government to focus on its proper roles.
  • Reverses the growth of harmful spending, tax, and regulatory burdens that are causing rates of inflation not seen in 40 years.
  • Achieves balance within 10 years by cutting 76 percent of the 10-year deficits currently expected by the Congressional Budget Office.
  • Requires the Federal Reserve to focus on maintaining stable prices and stops the Federal Reserve from printing trillions of inflationary dollars to bankroll expanding federal deficits.

Strengthening Social Security

  • Strengthens Social Security, allowing for higher incomes and more opportunity for all Americans.
  • Ensures that Social Security fulfils its original purpose as a program to prevent poverty in old age, increasing benefits for low-income retirees, and gradually reducing benefits for new, high-income recipients.
  • Without reform, the Social Security Trust Fund will be depleted in 2034.

Modernizing Medicare

  • Modernizes Medicare to achieve better outcomes for program beneficiaries.
  • Implements a premium support system for more choices, more competition, and lower costs.
  • Updates Medicare premiums and reduces taxpayer subsidies for wealthy recipients.
  • Without reform, the Medicare Hospital Insurance Trust Fund will be exhausted in 2028.

Phasing Out Obamacare and Reforming Medicaid

  • Phases out and eliminates the Obamacare insurance subsidies and reduces the Obamacare Medicaid expansion federal match rate down to the same rate that applies to other beneficiaries.
  • Ends the open-ended financing of Medicaid that fuels higher spending and encourages cost-shifting.

Protecting National Security and Countering the Threat of Communist China

  • Provides important resources for America’s national security and focuses the Department of Defense on its mission to protect the homeland from attack and to protect the United States’ interests abroad, including responding to challenges from China.
  • Increases defense budget resources to $836 billion in FY 2023, growing to $1.049 trillion by FY 2032 in order to meet the needs for great power competition.
  • Proposes a net total of $135 billion in additional specific investments for the Army, Navy, Air Force, and Defense-wide during the FY 2023–FY 2032 period.

Welfare Reform to Promote Work and Families

  • Refocuses means-tested welfare programs to promote the dignity of work and to remove marriage penalties.
  • Enforces and strengthens work requirements for Food Stamps.
  • Returns responsibility for housing programs to the states.

Empowering Parents to Make Education Choices

  • Winds down the federal Department of Education, eliminating unnecessary programs and transferring retained functions to appropriate agencies.
  • Expands the D.C. Opportunity Scholarship Program and expands school choice opportunities for Armed Services families.

Federalism for Infrastructure

  • Significantly reduces spending from the Highway Trust Fund and cuts the federal gas tax.
  • Eliminates aviation subsidies and the airline ticket tax.
  • Eliminates subsidies for Amtrak, mass transit, small airports, and more.
  • Eliminates regulations and ineffective programs that hinder the development of ports, harbors, and inland waterways.

Pro-Growth Tax Reform

  • Creates a fairer, pro-growth tax code.
  • Prevents tax increases by making the Tax Cuts and Jobs Act permanent.
  • Lowers individual taxes and simplifies the tax code while consolidating the current seven tax brackets into three.
  • Makes full and immediate expensing permanent and extends neutral cost recovery to investments in structures.
  • Reduces the corporate tax rate to 15 percent and lowers passthrough business taxes, allowing for higher wages for workers.
  • Allows Universal Savings Accounts for all Americans.
  • Indexes capital gains to inflation and ends the Death Tax.
  • Eliminates dozens of harmful and distortive tax credits and other forms of corporate welfare and special tax breaks, including the State and Local Tax Deduction and tax credits for green energy.
  • Reduces total revenues by $3.2 trillion during the FY 2023–FY 2032 period compared to current law.

Protecting American Values

  • Rolls back taxpayer funding for those that promote anti-American values and the institutions of the professional Left—such as the education establishment, public sector unions, Planned Parenthood, the United Nations Population Fund, and others.
  • Advances vital pro-life and conscience protection provisions.
  • Redirects federal funding to health centers that do not provide abortions.
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The Heritage Foundation's Budget Blueprint for Fiscal Year 2023 includes recommendations for policies to implement during fiscal years 2023 through 2032.

Scoring

Baseline

The policy recommendations included in the Budget Blueprint are scored relative to the Congressional Budget Office’s May 2022 baseline.1

Budget Authority, Outlays, Revenues, and Deficit

The fiscal impacts of policy recommendations are displayed differently based on the budgetary concepts the recommendation involves.

  • Policy recommendations changing mandatory spending show effects in terms of changes to outlays.
  • Policy recommendations changing discretionary spending show effects in terms of changes to budget authority.
  • Policy recommendations changing revenues show effects in terms of changes to revenues.
  • Some policies may be scored in terms of their total impact on the deficit.

Date of Enactment

Unless otherwise specified, policy recommendations are generally shown as if they were to be enacted and implemented beginning at the start of fiscal year 2023 (October 1, 2022).

Organization of Policy Options

The Budget Blueprint’s policy recommendations can be categorized and sorted in several different ways:

Budget Categories

Policy recommendations are categorized by type of budgetary concept and the purpose of the activity. Categories in the Budget Blueprint include:

  • Defense Discretionary: Discretionary budget authority in budget function 050, National Defense. This is the same as the Revised Security category that was used under the Budget Control Act.
  • Non-Defense Discretionary: Includes all discretionary budget authority other than Defense Discretionary.
  • Social Security: Includes mandatory outlays for the Social Security program.
  • Medicare: Includes mandatory outlays for the Medicare program.
  • Other Health: Includes all mandatory outlays for health programs other than Medicare, including Medicaid, the Children's Health Insurance Program, and Obamacare.
  • Other Mandatory: Includes all other mandatory outlays.
  • Net Interest: Includes net outlays for interest payments on the national debt.
  • Revenues: Includes all federal revenues.

Budget Function

All federal spending is categorized by the Office of Management and Budget by budget function.2

The 20 budget functions correspond to broad categories of activities, such as Agriculture or Transportation.

The budget function classifications are made without regard to executive agency or congressional committee jurisdiction.

Each function is assigned a three-number code that can serve as shorthand for a functional category (i.e., 050 is National Defense).

Budget functions are also subdivided into subfunctions to allow for a more detailed categorization of activities. The Budget Blueprint uses only the main function categories.

Committee Jurisdiction

Policy recommendations can be sorted by the congressional committee of the U.S. House of Representatives and/or the U.S. Senate that has primary jurisdiction over the relevant program or issue.

Some discretionary policy recommendations may be listed by the subcommittee of the Appropriations Committee that has primary jurisdiction over the program.

Some policies may fall under the jurisdiction of two or more committees; these are listed as Multiple Committees.

Agency

Policy recommendations can be sorted by the executive branch (or equivalent) agency charged with administering the program or issue.

Some policies may fall under the jurisdiction of two or more agencies; these are listed as Multiple Agencies.

Additional Resources

Endnotes

[1] Congressional Budget Office, “The Budget and Economic Outlook: 2022 to 2032,” May 25, 2022, https://www.cbo.gov/publication/57950 (accessed June 10, 2022).

[2] U.S. Government Accountability Office, A Glossary of Terms Used in the Federal Budget Process, September 2005, p. 128, https://www.gao.gov/assets/gao-05-734sp.pdf#page=128 (accessed December 16, 2021).

It is only through the contributions of a great many people that a publication like the Budget Blueprint for Fiscal Year 2023 is possible. Among them, a few special contributors have that extra talent, work ethic, and willingness to go the extra mile that make the Budget Blueprint a remarkable and uniquely special undertaking.

Heritage Experts

Kevin Roberts, PhD, is President of The Heritage Foundation.

Richard Stern is the Director of the Grover M. Hermann Center for the Federal Budget at The Heritage Foundation.

Preston Brashers is a Senior Policy Analyst for tax policy in the Grover M. Hermann Center for the Federal Budget.

David Ditch is a Policy Analyst in the Grover M. Hermann Center for the Federal Budget.

Rachel Greszler is a Research Fellow in Economics, Budget and Entitlements in the Grover M. Hermann Center for the Federal Budget.

Design and Development

John Fleming is the Manager of Data Graphics Services for Policy Publications at The Heritage Foundation.

Jay Simon is the Manager of Web Development and Print Production for Policy Publications.

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Policy Proposals By the Numbers