1. Permanent tax credits
The budget makes permanent the American Opportunity Tax Credit (AOTC), and the expansions of the Earned Income Tax Credit (EITC) and Child Tax Credit (CTC), which were first passed in the 2009 stimulus package. Those provisions are currently set to expire in 2017.
The AOTC is a credit for higher education costs that replaced the Hope credit. Unlike that policy, up to 40 percent of the AOTC is refundable, and the maximum benefit in 2013 is $2,500 rather than $1,950. It also has a higher income threshold than Hope (so more middle-class families quality), can be used to pay for book expenses, and is available for the first four, rather than first two, years of college.
The EITC and CTC are refundable credits intended to provide aid to low-income workers and working families, and low- and middle-class families with children, respectively. The stimulus package made the CTC available for people with income above $3,000 rather than above $10,000 (indexed for inflation), increased the maximum EITC for families with three or more children, and increased the amount married couples can make before EITC starts to phase out.
According to the budget, these policies will cost $161 billion over 10 years in addition to the cost of them under existing law from 2013 to 2017, when they're currently set to expire.
2. Lower discretionary caps
Since the Budget Control Act of 2011 passed as a result of the debt ceiling standoff, caps have been in place on discretionary spending, cutting $1.2 trillion from defense and nondefense spending, almost equally between the two. The fiscal cliff deal added $12 billion in additional savings. The budget adds another $202 billion, again, almost evenly distributed between defense and nondefense.
3. Reforming the Postal Service
A "comprehensive and balanced legislative proposal" to cut $20 billion in Postal Service spending over 10 years, while increasing the flexibility of the Postal Service in changing business practices.
4. Federal retiree pensions
The budget would increase the share of pensions that federal workers have to pay for, increasing what employees hired before 2013 have to pay from 0.8 percent of pay to 2 percent of pay. That raises $20 billion over 10 years.
5. One percent federal pay increase
In a change from the two-year pay freeze for civilian federal workers that's been in effect since 2011, the budget increases pay by 1 percent for 2014. That still saves $18 billion over 10 years compared with normal practices.
6. Cutting farm subsidies
The budget would cut farm subsidies by $38 billion over 10 years. It eliminates "direct payments" to farms while maintaining disaster assistance funding. It creates a new conservation program for agricultural land, wetlands and grasslands, but cuts other conservation programs to pay for that.
7. End "pay for delay"
"Pay for delay" deals that allow brand-name drug manufacturers to pay generic suppliers to put off releasing generic versions of popular drugs cost consumers billions every year. The budget authorizes the Federal Trade Commission to block these deals, saving $11 billion over 10 years.
8. Means-testing Medicare
"Means test" increases income-related premiums for Medicare Parts B and D, effectively raising prices for high earners, and raising $50 billion over 10 years.
9. "Pay for Success"
The budget emphasizes evidence-based policymaking, including a $195 million "Pay for Success" program which would promise to pay back providers of services only if they generate results according to predefined metrics. The approach, also known as "social impact bonds," was pioneered in Britain, and has been championed by evidence-based policy advocates.