Over the past many years, there has been ongoing debate raging in Washington, D.C. regarding the U.S. federal budget. As the U.S. deficit increases, some argue that cutting government spending should be a key priority of our lawmakers. Others favor more gradual decreases, such as raising taxes or implementing a proposed freeze on discretionary spending. Either way, as an economic adviser to the President, you have been tasked with presenting a proposal that addresses how to fix a current budget gap of $300 billion dollars in an effort to appease both sides of this debate. 

• Using the budget below, decide what options you will suggest cutting or implementing for your presentation to the president. Remember that these actions must cover a budget gap of $300 billion.
• Please keep in mind that these changes could seriously affect citizens’ daily lives. Also keep in mind people may be so angered by the changes that they will take action to prevent the president’s reelection, thus putting you out of a job.

• DOMESTIC PROGRAMS AND FOREIGN AID	Cut foreign aid in half	$17 billion
  Eliminate farm subsidies:Opponents believe subsidies help large businesses at the expense of small farms. Supporters believe subsidies protect American agriculture.	$14 billion
  Cut pay of civilian federal workers by 5 percent	$14 billion
  Reduce the federal workforce by 10%:This would eliminate approximately 200,000 federal jobs.	$12 billion
  Other cuts to the federal government: This includes reduced funds for the Smithsonian and the National Park Service, and closing the Office of Safe and Drug-Free Schools.	$30 billion
  Cut aid to states by 5%: This pressure states to cut funding for schools, police, and other services.	$29 billion
  MILITARY	Reduce nuclear arsenal and space spending: This would cut the number of nuclear warheads and end the “Star Wars” missile defense program.	$19 billion
  Reduce military to pre–Iraq War size and further reduce troops in Asia and Europe	$25 billion
  Cancel or delay some weapons programs: This would cancel some expensive purchases identified by the Sustainable Defense Task Force as possible cuts.	$19 billion
  HEALTHCARE	Enact medical malpractice reform: This option would begin to reduce the chances of large malpractice verdicts, which supporters believe would also check rising medical costs. Opponents say it could reduce doctors’ incentives to avoid errors.	$ 8 billion
  Increase the Medicare eligibility age to 68	$ 8 billion
  Raise the Social Security retirement age to 68: This would rise from the currently planned 67, encouraging people to work longer.	$ 13 billion
  EXISTING TAXES	Return the estate tax to Clinton-era levels: Those passing on an estate worth more than $1 million to their heirs would have portions of those estates taxed.	$ 50 billion
  End Bush tax cuts for income above $250,000 a year	$ 54 billion
  End Bush tax cuts for income below $250,000 a year	$ 172 billion
  Payroll tax increase for high earners: Those making over the current ceiling of $106,000 would have to contribute more to Social Security and Medicare.	$ 50 billion
  NEW TAXES	Millionaire’s tax on income above $1 million	$ 50 billion
  National sales tax: This would add a tax of 5 cents on every dollar for most purchases.	$ 41 billion
  Carbon tax: This option would tax carbon emissions, which scientists believe contribute to global warming.	$ 40 billion
  Bank tax: This would tax banks based on their sizes and the amount of risk they take.	$ 73 billion
  TOTAL GAP COVERED BY YOUR BUDGET PLAN	$_________________

  • When you have reached your target, save your results—you will need to refer back to them
  My question is

  . Did doing this exercise change your feelings about the budget debate in Washington? If so, how?

• I have 5 min