The reduction is part of $26.6billion in spending cuts and revenue-raising measures designed to bring Italy's budget deficit within limits set by the European Union.
The measures must be passed by the end of the year.
Italian Olympic Committee president Gianni Petrucci said he was "surprised and worried" over the possible cuts.
TOROC deputy CEO Luciano Barra, however, stressed that the proposed measures still have to be approved by parliament.
The overall cost of the Olympics in February next year is estimated at more than $3.6billion.
