Posted Fri, Jun 20 2014 by
More than 7,000 students, retirees, political leaders and other citizens have played The Concord Coalition’s updated Federal Budget Challenge since we put the updated version online a month ago.
The exercise lets players decide for themselves how they would reduce the nation’s projected budget deficits over the next 10 years by choosing among 40 different policy options, each with its own price tag or savings.
The updated version, built with our partners from the California-based non-profit Next Ten, takes into account what policymakers have done to reduce the deficit over the last two years and showcases several additional options that are available for further deficit reduction.
The Federal Budget Challenge, based on our interactive group exercise Principles and Priorities, also provides participants the opportunity to learn about some of the policy options available to create a more sustainable fiscal future.
In the updated Federal Budget Challenge, the most unpopular choice by players thus far is an increase in discretionary spending -- the part of the budget Congress appropriates into law annually -- above the caps set by the Budget Control Act (BCA) of 2011. This option would instead allow discretionary spending to grow at the same rate as the economy.
Interestingly enough, this was also one of the more unpopular options in a previous version of the challenge. In fact, in the latest version many players thought discretionary could be cut more than what the BCA caps allow. Sixty-eight percent of players choose to freeze discretionary spending at 2014 levels, cutting spending by $688 billion more than the BCA caps would over the next 10 years.
The most popular option, on the other hand, has been to increase the maximum earnings that are subject to the Social Security payroll tax. Currently, individual earnings up to $113,700 a year are taxed. This option would tax earnings up to $177,500, capturing 90 percent of the share of total earnings subject to the tax, and bring in $460 billion in federal revenues.
Many players have also been willing to make changes to Social Security benefits by raising the retirement age and using a progressive price indexing option that would base benefit increases for upper-income earners on the general rate of inflation rather than wage growth.
In order to make the difficult choices presented in the Challenge, many players have demonstrated that a path to fiscal responsibility can be achieved but only if policymakers consider a wide array of the options that are available and to both cut spending and raise more revenue.
Thanks to everyone who has completed the challenge so far. If you have not played yet and think you’re up to the task, attempt the challenge today!