Budget Simulation
I have attached the PDF version of the simulation
If you have not yet viewed the Balance the Budget simulation assigned in this unit’s study and linked in the Resources for this assignment, do so at this time. Then write a 500–700-word essay in which you respond to the following questions:
- How easy or difficult was it to balance the budget?
- How did you feel about the choices you had to make to balance the budget? Why did you make the choices you made?
- Although the numbers were different from the actual budget numbers, the activity resembled the types of choices that members of Congress have to make in order to balance the budget. What do you think are the chances that Congress would succeed at balancing the budget? Provide specific reasons drawn from your experience with the simulation.
Requirements
- Written communication: Written communication is free of errors that detract from the overall message.
- Length: 500–700 words.
- Resources: No resources are required for this assignment.
- Font and font size: Times New Roman, 12 point.
5/23/2020 Transcript
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P r i n t
BALANCING THE BUDGET SIMULATION
Welcome to the Balancing the Budget simulation! Your goal with this simulation is to balance a hypothetical government budget by choosing spending priorities. Though the totals are much lower than the actual budget, the proposed increases and decreases are realistic �gures (similar to increases and decreases that have actually been proposed). The choices and tradeo�s you make here are very similar to what Congress does, except that your choices tend to be easier. For the simulation, assume that no changes (no increases or decreases in spending) will result in a $25 billion de�cit, so you must cut $25 billion to balance the budget.
This activity provides a high-level understanding of the di�culties public o�cials face when considering budget changes. When you make changes to the budget categories, try to put yourself in the role of a public o�cial. Consider your background, experiences and personal beliefs, but also imagine yourself as a public o�cial elected by voters in your home state. You have a responsibility to support and advance the needs of your constituents.
Cutting and increasing budgets can have far reaching implications to the standard of living, growth, and overall economy, both in your home state and throughout the country. Cutting funds to Transportation could mean both a reduction of the workforce and less money spent on the improvement of roads. Deteriorating roads could lead to more accidents and higher health and insurance costs. The point is that a simple decision to make a cutback to an area can a�ect far more than just that area, so try to consider these things when you make your choices.
Area 1: National Defense The �rst area deals with National Defense. You’ll notice three categories on the left. Click on one to get started and determine what cuts or increases you want to make to that category. Remember, changes to the National Defense budget not only a�ect military personnel, but also companies that supply products and services for National Defense, and the security of our nation. Categories include:
Salaries and bene�ts for military personnel. Proposed: $104.7 billion. There are many stories of military families struggling to make ends meet. Furthermore, the all-volunteer military relies on decent pay and bene�ts in order to attract new recruits and reenlistments. Finally, in the past few years, many military personnel have undergone signi�cant hardship in overseas postings. Reductions may not exceeding $10 billion.
Research & development, testing and evaluation Proposed: $63.5 billion. Research and development is critical to maintaining a highly e�ective military. Technological advances such as surveillance drones can reduce or eliminate the risk to military personnel and greatly increase capabilities. Continued investment is needed to maintain America’s technological edge. Note that this amount does not include the cost of existing weapons systems that are being purchased. Reductions may not exceeding $5 billion.
Department of Homeland Security Proposed: $94 billion. Many argue that we need more money for domestic security. Local law enforcement agencies are being forced to bear a considerable burden for what should be a national obligation (anti-terrorist activities).
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Furthermore, numerous systems important to our security remain in dire need of upgrading. For instance, the 9/11 commission has concluded that ine�ective communications systems probably cost many lives because warnings could not be communicated e�ectively before the World Trade Center towers collapsed. Funding for the Dept. of Homeland Security has been �at (i.e., no increases) the past few years. Reductions may not exceed $5 billion.
Area 2: International A�airs Area 2 focuses on International A�airs. There are �ve main categories to consider in this area. Though it might seem like a good area to make some cuts, remember that we are living in a global society. Contributing to the increased health and well-being of other countries can help build and strengthen ties with those countries. Building and improving existing relationships with allies can lead to many positive and long-term a�ects at home.
Development assistance, child survival, and disease programs Proposed: $2.8 billion. Development assistance helps poor countries with programs that can raise their citizens out of poverty. For relatively small amounts, child survival and anti-disease programs can save thousands of lives. Areas such as Africa are plagued by diseases that kill tens of thousands, but many of these can be prevented or treated e�ectively, with more �nancial assistance. Reductions may not exceed $0.5 billion.
Food aid Proposed: $1.2 billion. This assistance can help avert or moderate humanitarian disasters and prevent starvation. Children are the most likely victims if there is insu�cient food aid. Reductions may not exceed $0.5 billion.
Assistance for the independent states of the former Soviet Union Proposed: $0.6 billion. Many of these countries are potential breeding grounds for terrorism. Unless stable governments are promoted, groups hostile to the United States are likely to be able to establish bases in some of these countries. Furthermore, some of these countries continue to possess nuclear weapons materials, but their security is weak. Assisting these countries in safeguarding these weapons-and, ideally, buying them from these countries-will greatly bene�t the United States. Reductions may not exceed $0.3 billion.
Refugee programs Proposed: $0.8 billion. These programs help refugees �eeing dangerous conditions in their home countries. Although a small amount of money may be used to assist a few refugees in moving to the United States, most of the money goes to providing assistance to refugees in other countries (e.g., providing food for refugee camps). Reductions may not exceed $0.2 billion.
Foreign military �nancing grants and loans Proposed: $4.3 billion. Most of this money goes to allies, helping them strengthen their defense. In some cases, recipients are actively �ghting terrorist threats that also threaten the United States. Without this assistance, poorer countries would struggle against terrorist and other armed threats. Reductions may not exceed $0.5 billion.
Area 3: Science, Space and Technology
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This area covers the broad grouping of science, space and technology. You’ll notice three categories for which you can make increases and decreases. Consider your personal views when you try to decide what to do in these areas, but also consider the impact on your constituents. Does your state have businesses that support any of these categories? Would cuts or increases have a signi�cant economic impact? And what about the long-term e�ects to education and culture?
National Science Foundation programs Proposed: $5.2 billion. These fund a wide range of activities, from basic research to educational tools for use in grade schools. Federal government funding of basic research is widely seen as critical in laying the groundwork for innovations and advances that greatly enrich the nation and improve the quality of life for its citizens. Many scientists are worried that government research funding is inadequate, and will cause the U.S. to lose an important advantage it has over competitors around the world. Reductions may not exceed $0.5 billion.
Science, aeronautics, and technology Proposed: $8.2 billion. This helps to fund the spectacular feats of space science witnessed over the years, such as the Hubble telescope, missions to the outer planets in the solar system, exploration of Mars, and much more. Some space scientists worry that funding is insu�cient, as demonstrated by NASA’s recent plan to shut down the Hubble because of lack of funding for maintenance and upgrades. Reductions may not exceed $2 billion.
Human space �ight Proposed: $6.7 billion. This �gure may need to be increased substantially if we attempt to send astronauts to Mars. Reductions may not exceed $3 billion.
Area 4: Environmental Protection There are two categories in this area but both can have far reaching implications, so give some thought to the rami�cations of your changes. Remember, population in the United States continues to grow. Does this have an impact on your decision?
Pollution control: regulation, enforcement, and research Proposed: $3.2 billion. This money helps to fund regulation of polluters, and enforcement of anti-pollution laws. It also helps fund research into pollutants and ways to reduce pollution. Reductions may not exceed $2 billion.
Superfund Proposed: $1.4 billion. This fund helps to clean up some of the worst environmental hazards. There are currently hundreds of seriously polluted cites waiting for Superfund funding, but there is not enough money to clean them all right now. Reductions may not exceed $0.5 billion.
Area 5: Farm Income Stabilization Area �ve has just the one broad category to select from. Consider whether or not your state relies on farming as a key economic indicator. Farming is a capital intensive profession and is very dependent on numerous uncontrollable factors. Also, remember that farming is at the heart of our most basic need!
All Farm Income Stabilization Programs Proposed: $16 billion
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These programs range from price supports to crop insurance. Many small farmers worry that they would lose their farms without federal assistance. Reductions may not exceed $2 billion.
Area 6: Transportation There are two key categories for decision making purposes in the area of transportation. As mentioned on the opening page, increases and decreases in the transportation budget can have far reaching impacts in all states. There are economic considerations beyond the obvious when you consider that numerous businesses o�er products and services in this area.
Highways Proposed: $29.5 billion. Although states provide substantial amounts of money for highway maintenance, repair, and expansion, they also rely heavily on federal money. A growing coalition worries that we have underfunded transportation, leading to the rapidly increasing congestion that can be seen throughout the country, where congestion has increased greatly in the past �fteen years. Reductions may not exceed $2 billion.
Mass Transit (buses, subways, light rail, etc.) Proposed: $7.1 billion. This is a half billion dollar decrease over the actual 2002 expenditure. In real terms, the decrease is even greater. Advocates of mass transit argue that it plays a major role in reducing peak hour congestion (congestion during rush hour) and greatly reduces pollution and reliance on imported oil. However, declining government funding often results in cuts in service and increases in fares, leading to declining ridership and greater dependence on cars. This in turn fuels greater congestion, more pollution, and greater dependence on foreign oil. Reductions may not exceed $0.5 billion.
Area 7: Education This area covers the hot topic of Education. There are four main categories in education and most have the added complexity of being a�ected by both federal and state budgets. Many of the short-term rami�cations of increases or decreases to this budget item are obvious, but what about long-term e�ects? Do you view Education as a responsibility of the federal government, or of state and local governments? How important are extracurricular activities, like sports teams or arts events, to you? These are all things to consider when making changes to this budget area.
Education for the disadvantaged Proposed: $14.2 billion. This is the largest single line item for K-12 education. State and local governments provide most of the funding (95%), but funding for disadvantaged children would likely su�er greatly without federal assistance, because these children often have greater needs. Without a substantial federal commitment, it may be very hard to provide these children an adequate education that would give them a good chance to move out of poverty when they grow up. Many educators believe that far more funding is needed. Reductions may not exceed $3 billion.
School improvement Proposed: $5.6 billion. This helps school districts construct new schools and renovate old ones. In growing suburbs, students are often crammed into schools built to hold far fewer bodies. In older districts, asbestos-laden pipes, mold, leaking roofs, and other problems plague many schools. Reductions may not exceed $2 billion.
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Special education Proposed: $10.4 billion. Over a quarter century ago, the federal government passed a law requiring that disabled students be given educational opportunities equal to all other students, and promised to pay 40 percent of the cost. The federal government has never kept its promise, and state and local districts struggle to pay for the share that the federal government is supposed to provide. Increasing the federal government share by 50 percent or more would greatly aid state and local e�orts to strengthen education. Reductions may not exceed $0.5 billion.
Higher education-�nancial aid Proposed: $14.6 billion. Many students struggle to pay tuition and other college costs. This represents about a 10 percent increase in federally-funded �nancial aid (e.g. Pell Grants). Reductions may not exceed $1 billion.
Area 8: Health Care You’ll notice four categories to choose from in the area of health care and a brief explanation is provided for each. The rising trend in health care costs a�ects these areas as well, so consider that in your decision making process.
Substance abuse and mental health services Proposed: $3.4 billion. Millions of Americans struggle with the e�ects of chemical dependency and substance abuse, either on themselves or on someone close to them. This funding helps provide treatment and other services. Reductions may not exceed $0.5 billion.
National Institutes of Health Proposed: $27.5 billion. This is one of the front lines in the battle against diseases and other health threats. The National Institutes of Health help to fund research into a vast array of health problems, from new antibiotics to viruses that might be used by terrorists. The dramatic progress against AIDS is due in part to NIH-funded research. Today, Americans are threatened not only by many serious health threats, but also fact the likelihood that new ones will be brought to this country by world travelers. NIH research represents one of the most important e�orts to combat these threats. Reductions may not exceed $1 billion.
Medicaid Proposed: $192.8 billion. Although massive, this program struggles to provide health care for the poor. Growing numbers of doctors turn away new Medicaid patients because reimbursements are so low. Furthermore, the working poor often receive no Medicaid bene�ts, so millions of Americans still have no health coverage. Many would like to see this program expanded-or similar ones started-to cover more working poor. Reductions may not exceed $10 billion.
State children’s health insurance fund Proposed: $4.9 billion. Even when parents cannot get health coverage, state programs will often provide some coverage for their children. Still, there is a pressing need for more coverage in areas such as mental health care. Good health care for children is widely seen as an extremely bene�cial investment, because this can help prevent later serious health problems. Faced with tight budgets, many states are considering cutting back on health care for children, unless the federal government increases funding. Reductions may not exceed $0.5 billion.
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Area 9: Housing There is one category for you to consider in the housing area, but it is an important one. As stated in the description, the implications can be far-reaching. What are your beliefs here? Does it make a di�erence if you are a�liated with one of the major political parties? Do your budget considerations change based on the needs of your home state?
Subsidized, public, homeless and other HUD housing Proposed: $28.9 billion. Millions of Americans struggle to a�ord adequate housing, and thousands of families with children are homeless. Decent housing appears to be bene�cial in many other ways as well, such as helping children do better in school and making it easier for adults to �nd employment. Many activists believe that there is a serious shortage of a�ordable housing, and would like to see the federal government provide more assistance. Private e�orts (such as Habitat for Humanity) are miniscule compared to what the federal government can do. Reductions may not exceed $2 billion.
Area 10: Income Security The four categories dealing with income security are hot topics in any budget discussion. Does your party a�liation a�ect your decisions in this area? What are your personal views on each of the categories? What are some of the far reaching rami�cations of increases or decreases in income security? Consider these things as you make your budget decisions.
Special supplemental food program for women, infants, and children (WIC) Proposed: $4.9 billion. Advocates see this as another incredibly good investment. Helping infants and small children get adequate nutrition will pay enormous dividends throughout those children’s lives. Reductions may not exceed $0.3 billion.
Child care assistance Proposed: $2.1 billion. Without adequate child care, single parents face a di�cult choice: remain unemployed, or leave children unsupervised, sometimes in dangerous neighborhoods. Adequate child care can also make it possible for parents to continue their education, making it less likely that they will need government assistance in the future. Finally, high quality child care may greatly bene�t children, making it more likely that they will grow up to be productive adults. Reductions may not exceed $0.1 billion.
Unemployment insurance Proposed: $38.4 billion. Although the economy is improving, many Americans still struggle to �nd work. Thousands of workers are nearing the end of their unemployment bene�ts, with an uncertain future if bene�ts end and they still cannot �nd a job. They and their families face the prospect of losing their homes and other hardships, leading some to call for an extension of unemployment bene�ts-which would require increased funding. Reductions may not exceed $2 billion.
Temporary Assistance for Needy Families (TANF), and Related Programs Proposed: $17.9 billion. This is the federal government’s primary assistance program for the poor, with recipients limited to two years of consecutive bene�ts, and a �ve-year lifetime bene�t limit. The proposed spending cuts total TANF spending by about half a billion dollars over last year. TANF bene�ts are very modest, and most recipients seem to be able to move o� of assistance in two years or less, but a small percentage seemed to be plagued by other challenges-e.g. children with special needs-which make it extremely di�cult for them to get a job. These families face a loss of bene�ts without a change in the law and an increase in
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funding. Reductions may not exceed $0.5 billion.
Area 11: Law Enforcement There are two categories in law enforcement and both have an impact at the federal, state and local levels of government. How do increases or decreases in this budget area a�ect your home state? Do you see a value, real or perceived to your constituents?
Criminal investigations (e.g., Drug Enforcement Agency, FBI, Dept. of Homeland Security) Proposed: $6.4 billion. Many argue that more money is needed to �ght terrorist threats. Furthermore, growing numbers of analysts are critical of the FBI and argue that it needs to be reorganized. However, e�ective reorganization is costly. Currently, the FBI has responded to terrorist threats by moving agents out of other areas, so things such as organized crime may not get as much attention. Reductions may not exceed $0.3 billion.
Border and transportation security directorate activities Proposed: $7.5 billion. The United States has a long, unguarded border with Canada; a long, increasingly forti�ed border with Mexico; and thousands of miles of coastline. Security o�cials are concerned about the ability of terrorists to slip across border crossing stations (many of which are unsta�ed late at night) along the Canadian border. Agents post “Closed” signs when the crossing are unsta�ed, but terrorists may not follow the rules. Cameras can record some illegal entries, but the illegal entrants are not always found. O�cials in northern border states feel that much more coverage is needed. Reductions may not exceed $0.5 billion.
Area 12: General Government There are two main categories in this area. Remember your role as a public o�cial when you are considering these categories. Should your party a�liations be considered when adjusting this budget item? What impact do the choices you’ve made, have on your decisions in this area?
Tax administration Proposed: $10.1 billion. Many people do not like the IRS, and would not be sad to learn that they are understa�ed. However, there may be hundreds of billions of dollars in tax avoidance that is being missed because the IRS does not have the personnel to pursue tax cheaters. Spending limits here may be costing us money. Reductions cannot exceed $0.5 billion.
Congressional compensation Proposed: $0.1 billion. Many feel that members of Congress are overpaid, but they are responsible for a $2 trillion dollar government-far larger than any corporation in the world, while they are paid far less than any CEO of a major corporation. Reductions here would require changes in laws, but could be done. Reductions may not exceed $0.02 billion.
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