The Swiss Federal Council says public funds should cover $1.05 billion of the projected shortfall from the neighbouring Alpine towns staging the Olympics.
A feasibility study estimated costs of $2.9 billion and income of $1.5 billion.
The seven-member executive body suggests paying half the expected $62.6 million cost of bidding. It asked the federal sports ministry to report back to lawmakers.
The Davos-St. Moritz bid needs support from voters in a regional referendum. Switzerland last staged the Olympics in 1948 at St. Moritz, which also hosted in 1924.
International Olympic Committee members will choose the 2022 host in 2015.