America was founded with an unshakable faith in what a free and virtuous people can build. Our Founders 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 our people.
Though a rare view at the time, the faith of our 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 2022 is a representation of our proud commitment to those values.
Unfortunately, many who have wielded the power of the federal government have sought to reap the benefits of free markets while rejecting the principles that created it. They have bloated the government, consumed more and more of the resources and wealth generated by our 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, eroding our 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 us of the economic vitality we cherish.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 us, the Heritage Foundation's Budget Blueprint provides legislators with a wide array of policy recommendations to return to the limited and responsible government our Constitution envisions. These proposals serve to:
- Prioritize: Many constitutional agencies and activities of the federal government, such as national defense, can be reformed to utilize taxpayer investments more efficiently.
- Streamline: During the last century, legislators have expanded the federal government into a variety of areas in which it does not belong. Congress should eliminate such wasteful and inappropriate spending.
- Protect natural rights: Legislators should ensure the federal government respects and preserves the rights of our 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 repeatedly and deliberately choose 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 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.
 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.
 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.
 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.
 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 2022 is a comprehensive proposal to right-size the federal government so that freedom, opportunity, prosperity, and civil society can flourish.
- Includes more than 200 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 $12.3 trillion during the FY 2022–FY 2031 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.
- Rejects efforts to expand harmful spending, tax, and regulatory burdens, and rolls back unwarranted and destructive programs.
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 would be depleted in 2033.
- 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 would be exhausted in 2026.
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
- 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 $764.64 billion in FY 2022, growing to $965.98 billion by FY 2031 in order to meet the need for great power competition.
- Proposes a net total of $97 billion in additional specific investments for the Army, Navy, Air Force, and Defense-wide during the FY 2022–FY 2031 period.
Welfare to Promote Work and Families
- Refocuses means-tested welfare programs to promote the dignity of work and remove marriage penalties.
- Enforces and strengthens work requirements for Food Stamps.
- Returns responsibility for housing programs to the states.
Better Results for Education
- 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 the families of the Armed Services.
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 preventing the expiration of the Tax Cuts and Jobs Act.
- Makes full and immediate expensing permanent and extends neutral cost recovery to investments in structures.
- Reduces the corporate tax rate to 17 percent and increases the deduction for passthrough businesses, 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, including the State and Local Tax Deduction, tax credits for energy, and corporate welfare.
- Reduces total revenues by $2 trillion during the FY 2022–FY 2031 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.
- Retains vital pro-life and conscience protection provisions of federal law.
- Redirects federal funding to health centers that do not provide abortions.
The Heritage Foundation's Budget Blueprint for Fiscal Year 2022 includes recommendations for policies to implement during fiscal years 2022 through 2031.
The policy recommendations included in the Budget Blueprint are scored relative to the Congressional Budget Office's July 2021 baseline. The baseline shows the fiscal effects during the FY 2022–FY 2031 period of the laws in effect as of July 2021.
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 were generally shown as if they had been enacted and implemented beginning at the start of fiscal year 2022 (October 1, 2021).
Organization of Policy Options
The Budget Blueprint's policy recommendations can be categorized and sorted in several different ways.
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.
All federal spending is categorized by the Office of Management and Budget by budget function.
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 subfunction to allow for a more detailed categorization of activities. The Budget Blueprint uses only the main function categories.
Policy recommendations can be sorted by the congressional committee of the 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.
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.
It is only through the contributions of a great many people that a publication like the Budget Blueprint for Fiscal Year 2022 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.
Kevin Roberts, PhD, is President of The Heritage Foundation.
Matthew D. Dickerson is the Director for 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.
Richard Stern is a Senior Policy Analyst in the Grover M. Hermann Center for the Federal Budget.
Design and Development
John Fleming is Manager of Data Graphics Services at The Heritage Foundation.
Jay Simon is the Senior Designer and Web Developer for Research Projects at The Heritage Foundation.