If I were planning a $500 billion cut, I'd do something like this:
Departments/Agencies to be eliminated in full:
-Agriculture = $133 billion
-Labor = $45 billion
-HUD = $36 billion
-FEMA = $10 billion
-Commerce = $9 billion
-EPA = $8 billion
-TSA (privatize) = 8 billion
-TVA (privatized) = $1 billion
-SBA = $1 billion
Departments to be eliminated in part:
-Education, cut everything but grants to states = $45 billion
-Energy, cut everything but nuclear security = $20 billion
-Transportation, cut everything but grants to states = $16 billion
Individual programs to be eliminated in full:
-Medicaid from HHS = $527 billion
-EITC from Treasury = $84 billion
-SSI from SSA = $61 billion
-TANF from HHS = $17 billion
Other Cuts
-foreign economic aid = $40 billion
-end federal war on drugs = $20 billion
-5% cut federal civilian employee pay = $15 billion
Gross Cuts = $1096 billion
Now, the above cuts mean a gutting of the regulatory state and corporate welfare. They also mean a complete elimination of welfare spending sans Social Security and Medicare, the value of which is $919 billion. But, assuming it's not politically feasible to cut that deeply into popular welfare, here's what we do; cut a $12,000 check to everyone earning less than $30,000/year (50 million people), no strings attached. This would cost $600 billion/year. Though this would represent a significant cut in the real value of welfare benefits for some people, I contend that most people would happily take $12,000 in cash, to be used as they please, in place of assorted benefits and the strings that come with them.
So, $1096 billion - $600 billion = $496 billion in net cuts.
And Bob's your uncle.