A Balanced Budget?This year President Clinton will submit his proposed legislation for theFederal Budget to Congress. The fact that we have divided government (ex.
,Democratic President, Republican majority in Congress) means the majority ofthat legislation won’t make it through the first ten minutes of a Congressionalsession. The President in turn will veto legislation presented to him byCongress. The whole situation is a vicious, never ending circle. Each side islooking out for their own best interests, and after years, even decades of thisthe United States has a huge budget deficit. Is there a solution to all thismadness? Is it feasible to balance the Federal Budget? Every politician onCapitol Hill claims to have the answer.Order now
The Federal Government goes as far toemploy some of the most renowned economist’s in the world to try to solve thedeficit mess, and they still haven’t figured it out. The budget simulation exercise by The Committee for a ResponsibleFederal Budget provided choices Congress has to use as its guide for theupcoming year. How hard can it be to balance the budget I thought? After doingthe exercised I realized the title of the simulation exercise, “The FY 1997Budget: An Exercise in Hard Choices,” could not have been more appropriate. Itis possible though to balance the Federal Budget, provided you follow 3 simplerules. First you must decide what you feel is important, then cut withoutconsciousness, and if that doesn’t work, alter your baseline. Important ChoicesWhen deciding on what I thought was important to protect in the budget,I felt like a politician myself.
I protected my own self interests. First up wasDefense. The fact that I am in the Marine Officer Program weighed heavily on mydecision to increase Defense spending by 17. 6 billion (all amounts in billions,unless noted), following the Congressional Budget Resolution. The President’splan just didn’t provide enough capital, the Congressional BlackCaucus/Progressive Caucus would basically wipe out my career before it evenstarts, and I just can not have that. Next up is Education.
Without the directstudent loan program, I would have no way to fund my education other than goingto some bank and going through the demeaning process of begging a loan officerto lend me money for school. I feel a sense of loyalty to the President on thisissue, because without this program I would still be doing concrete constructionback home in Indiana. As a result, I voted to increase Educational spending33. 4. My other concern or problem area is Administration of Justice. Crime is wayout of control in this country.
There has to be an end. I voted to increasespending 23. 6, opting for the President’s budget because it provides enoughcapital to temporarily combat the problem. You might be thinking, wow this fooljust increased the deficit by 74.
6, but unless are borders are protected, arechildren educated, and until we can feel safe in our homes at night, thiscountry won’t realize it’s potential. International ; Domestic SpendingAt this point, the deficit stands at 883. 6 (809 billion beginning +current spending). It is time to cut the waste.
First, International Affairsrequires attention. Does the United States really need to fund every country’sstruggle? I don’t think so, so I agree with the Budget Resolution ConferenceAgreement (BRCA), and I vote to cut 12. 4. Next on the list, General Science, Space and Technology. I vote todiscontinue the Space Station Program. As the report says, scientists have lostinterest so why keep funding it.
Another 11. 2 by the wayside. The Energy issue is a complex one, but nevertheless the DOE has to go. The DOE is a bureaucracy of waste.
The DOE has several institutions doing thesame research. By Eliminating the DOE as a go-between, money and time saved. TheBRCA proposal is more beneficial to my pursuit of a balanced budget, eliminating4. 2. Natural Resources are a touchy subject, but in order to balance thebudget, everyone has to chip in.
By charging the fair market value for naturalresources, 21 billion saved. Agriculture is essential, but it is not necessary to increase salariesand expenses of Farm Service Agency employees, which the President’s budgetdoes. . The BRCA cuts 4. 1. Commerce and Housing Credit, another huge buearucracy, has to go.
Byeliminating the Department of Commerce, and by broadening FCC Authority toAuction Licenses, total saving equals 10. 4. Transportation is another touchy subject, what with all the airlinetragedies and train crashes. This subject is constantly in the news.
Terminatingthe Federal Transit Administration and leaving the states to be responsible forfunding, 23 billion saved. Also by reducing or eliminating other TransportSubsidies I save another 6. 2. Community and Regional Development are an issue I have never reallygiven much consideration to, but with the spending I did earlier, I need to makecuts. The BRCA cuts the most. I propose to follow their legislation cutting 21.
5. Health was in the news when Clinton was first elected. I liked hisrhetoric then, and although I need to make cuts, I stand by his proposal of 45. 3. even though it is only half of what the BRCA proposes to do this is a verysensitive area of policy, and cutting to much could mean reelection. What about Medicare? To play it safe, I went with the BRCA proposalbecause it reforms Comprehensive Medicare, just not as much as the President’sProposal.
The CBO Illustrative Comprehensive Options were a brief and passingthought, but overall I believe they hurt Medicare more than either of the othertwo proposals. Saving equates to 182. 6. As far as Income Security goes, I recommend following the BRCA proposal. Their proposal cuts 45. 4, so for those people on welfare, get out and get a job.
Social Security is a sore topic for many individuals. I would proposecutting Social Security completely, but that wasn’t an option. Why should I payfor something I’ll never get anything out of. Forced to choose some kind of cuts,I suggest first skipping one COLA for One Year, a saving’s of 57.
9. By Reducingthe Replacement Rate Within Each Bracket of Social Security I am able to save anadditional 11. 8. Something I failed to realize earlier, Veterans Benefits and Services. This is something I might one day need based on my career aspirations. I choseto go with the BRCA because it increases the Presidents budget in categoriessuch as medical care and medical research.
Total saving amounts to 9. 4 billion. With the Federal Compensation and General Government portion of thebudget, I thought it to be a bad idea in cutting pay to government employees. IfI were a Member of Congress, I could consider myself blacklisted. Also I one dayhope to be a government employee via the military. I propose Reducing COLAS toMiddle or High Income Retirees, saving 11 billion.
I also would raise EmployeeContributions. By doing so, it only benefits these same employees in the futurewhen they retire, and it also allows me to trim an additional 12. 4 off of thedeficit. As for means testing, I chose to reduce this area by opting forReduction of Benefits to Middle and High Income Families. Families with anannual income of $40,000 really don’t need help.
I chose to not cut anythingelse, but I was able to do 303. 3 in damage to the deficit. RevenueGoing into Revenues, I have saved 793. 9 billion, but still the budgetremains unbalanced.
Here, I decided to tax imported oil, saving 62. 5. Next,taxing Toxic Water Pollutants as well as levying an Excise Tax on Air Pollutantsnets an additional 170. 7. Also by increasing tobacco taxes to 48 cents per packnetted 22.
3. As for a running total, 1048. 7 billion remains unspent. Unfortunately there happens to be some programs that need money. First,I chose to spend 117 billion on giving tax credits for Families/Children, optingfor the President’s budget. I voted to repeal the 4.
3 cent motor fuels tax,spending 2. 9. Finally, I spent 15. 6 to Provide Tax Incentives for Long – TermCare Insurance. All this spending on revenues cost me 187.
2 billion. My rationalbehind my spending, is once again in my own self interest, for if I was a Memberof Congress, with all the cuts I have made, I have to give back a little. Balanced?Will the budget balance? Before the exercise began there was an 809billion deficit. I spent 209.
3 billion, on a total of 6 different programs. Icut 1048. 7 billion from 18 different recipients of federal dollars. This amountsto a balanced budget. Total Deficit Reduction from Policy changes equaled838. 7(all amounts in billions).
Interest savings amounted to 83. 87. Totaldeficit reduction, 992. 57. Add in the baseline budget deficit of 809 billionfrom the previous year. 113.
57 remains. Policy changes totaled at 718. 7. Spending changes as a percentage ended up 85. 7%.
Finally revenue changesfinished at 14. 31%. Is it feasible to balance the Federal Budget? It is if it is a game orassignment. Dealing with issues that effect individuals from all walks of lifeis almost impossible.
I cut all but a few categories under International &Domestic Spending. It is not realistic in the real world. Cutting funding forone program not only effects those involved, but inadvertently effects’ others. An example would be cutting welfare benefits. With no money, no job, and nofuture prospects, an individual might result to crime, whether selling narcoticsor robbery, in order to support their family.
The decisions that the Presidentmakes in preparing a budget have to be overwhelming. In Congress, individualdecisions are more anonymous. The records are accessible, but who reallyremembers how an individual Member of Congress voted. How many taxpayers knowwhat a baseline is. The President and Congress each uses their own baseline, ithelps them justify spending or cuts.
Until the President and Congress can agreeto bal ance the budget, cut waste, and quit talking about it, there will be adeficit. Works CitedExercise In Hard Choices. Committee for a Responsible Federal Budget. July 1996.History