Federal budget: $59 billion here, $300 billion there ...

By Jeanne Sahadi, senior writer

NEW YORK (CNNMoney.com) -- Amid growing concerns about deficits, Congress will in coming weeks consider a bevy of measures that combined could increase the deficit by close to $500 billion over 10 years.

And that doesn't include the big kahuna on this year's agenda: extending the 2001 and 2003 tax cuts, which could cost anywhere from several hundred billion dollars to more than $2 trillion.

While it is expected that many measures will be paid for with revenue-generating provisions, the total cost of all that's on the table would not be fully offset. That's in large part because several measures are exempt from the new "pay-as-you-go" law.

Some of the measures have already been factored into 10-year deficit projections. But in a rough mid-term election year that has seen the eruption of a debt crisis in Europe, lawmakers on both sides of the aisle are becoming more sensitive to the optics of passing measures that are not paid for, even when many consider those measures essential.

The specific contents of the major bills under consideration are still being shuffled about. But several of the measures below are likely to make the cut in one form or another.

Extension of tax breaks: Dozens of tax breaks for businesses and individuals have lapsed. The cost of extending them for this year is $31 billion.

Such "tax extenders" include the research and development credit for businesses and the choice for individuals to deduct either their state and local income tax or their state and local sales tax.

Estate tax: Defying all expectations, Congress let the estate tax die at the end of 2009. But it's coming back in 2011. The question is at what level.

Unless Congress acts, starting next year no more than $1 million of a person's estate would be exempt from the estate tax -- which is well below the $3.5 million exemption in place last year. And the top estate tax rate would revert to 55%, up from 45% in effect last year.

President Obama has proposed permanently extending the estate tax at 2009 levels, which the Tax Policy Center estimates would cost $234 billion over 10 years.

In the Senate, however, a proposal to exempt $5 million and set the top rate at 35% has garnered some bipartisan support. Depending on how various parameters are set, the proposal could cost north of $300 billion.

Safety-net provisions for the unemployed: Some lawmakers are pushing to retain a program that extends the number of weeks an unemployed person may collect federal unemployment benefits. When combined with state benefits, under the program, that means a person can qualify for up to 99 weeks of benefits.

But the program expires in June. The measure under consideration would extend it to the end of the year.

Likewise, there's a proposal to extend the federal subsidy to help the newly unemployed pay for health insurance under COBRA. The subsidy is scheduled to expire at the end of May, so anyone who loses their job in June would not be eligible.

Combined, the two measures would cost close to $90 billion.

Aid to states: A proposal under consideration would provide $25 billion in federal aid to help budget-strapped states meet the increased demands for Medicaid services.

Funding for education jobs: Sen. Tom Harkin, D-Iowa, has proposed that $23 billion be appropriated to prevent states, suffering from steep budget deficits, from having to lay off teachers, principals, librarians and other school personnel.

War spending: Lawmakers are considering a request for $33 billion in supplemental war spending in Iraq and Afghanistan. It is expected to be included in a bill with other supplemental spending requests -- such as for disaster relief. All told, the supplemental spending requests would total $59 billion.

'Doc fix': Unless Congress acts, Medicare reimbursement rates for physicians will automatically be cut 21% come June 1 and by 1% to 6% in future years because of a pre-set formula that dictates Medicare outlays related reimbursements. Lawmakers are likely to override that scheduled cut for five years, at a cost of $89 billion.

Small business tax relief: President Obama has proposed excluding capital gains tax on small business stock purchased by individuals. So the tax break -- estimated to cost $2 billion over 10 years -- would help "angel" investors who take early stakes in fledgling, privately held companies.

2001/2003 tax cuts extension: There's been bipartisan support for extending the 2001 and 2003 tax cuts for the majority of Americans. If Congress doesn't act, they will expire after Dec. 31.

Extending them permanently would cost an estimated $2.2 trillion over 10 years.

It's not clear yet how long lawmakers might opt to extend the tax cuts, or if there will be enough of a push to also extend them for high-income households. Both parties have favored making the cuts permanent, at least for most Americans. But of late some believe extending them for a year or two may be the smartest move given current political and economic constraints.

Indeed, last week conservative economist Martin Feldstein, who was President Reagan's top economic adviser, said in a Wall Street Journal editorial that while he favors temporarily extending the cuts for everyone, the country can't afford to make them permanent.

"Changing the Obama budget proposal to limit all tax cuts to two years would reduce the total deficits over the next decade by more than $2 trillion. No single policy change could do as much to limit the future deficits and the national debt," Feldstein wrote. To top of page

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