3. Complete the "Federal Budget Challenge" at the following. This individual exercise will give you a glimpse into the challenges our federal lawmakers face when trying to construct a federal budget that is fiscally responsible and also pleases a wide variety of constituents. After completing the exercise, provide a summary of how you did. -did you increase or decrease the deficit, and by how much? what areas did you increase/decrease spending the most? -in which areas did you struggle most to make a decision? what did you learn from this exercise? Investments (choose as many as you like) Spend $78 B Provide all lower-income and middle-income families with children under the age of three access to affordable child-care programs Spend $30 B Establish a National Infrastructure Bank that would provide loans and grants for infrastructure projects across the country Spend $67B Fully pay the tuition of all students who are eligible for Pell grants and allow them to use those grants to fund living expenses, effectively providing them with two years of free community college General Government Spending (choose as many as you like) Cut $20B Eliminate federal subsidies for AMTRAK and other intercity rail systems, including high-speed projects Cut $20 B Reduce Department of Energy funding by 25 percent over 3 years on research into new energy technologies Cut $21 B Reduce subsidies the federal government provides agricultural producers to help buy crop insurance Cut $93 B Eliminate NASA's human space exploration program and space operations programs Cut $32 B Limit forgiveness of graduate student loans by increasing the percentage of income included in loan payments and the length of time for repayment before loans are forgiven. Cut $53 B Reduce grants to state and local governments by 50 percent primarily in areas like education, the environment, housing and Department of Justice related programs. Cut $75 B Decrease spending on ship construction to the 30-year. average, reducing the number of ships that the Navy is scheduled to purchase over the next 30 years Cut $16 B Halt production of the F-35 fighter and instead purchase the most advanced versions of older, non-stealth fighter aircraft that are still in production Cut $45 B Defer the development of a new long-range bomber for the Air Force until after 2028 Cut $18 B Cap basic pay raises for military service members at half of a percentage point below the increase in avorage wages and salaries in the private sector Cut $51 B Reform TRICARE health insurance products for some multary families and military retirees to bring cost sharing more in line with private-sector health insurance Cut $145 B Reduce funding for international affairs programs by 25 Cut $109 B Eliminate Affordable Care Act exchange subsidies for those earning between 300 and 400 percent of the federal poverty level Cut $158 B Add a "public plan" to the ACA's health insurance exchanges Cut $419 B This "premium support option would restructure the Medicare program to one that provides seniors with money to purchase private insurance Cut $47 B Convert Medicare from fee-for-service payments to episodebased "bundled payments" Cut $18 B Eliminate "double quality bonuses" paid to Medicare private insurance plans in certain urban counties Cut $389 B Raise the basic Medicare Part B and Part D premiums to 35 percent of each program's costs, phased in over five years Cut $703 B Provide a fixed amount from the federal government to the states for Medicaid based on spending per enrollee (per-capita cap) Cut $419B This "premium support" option would restructure the Medicare program to one that provides seniors with money to purchase private insurance Cut $47 B Convert Medicare from fee-for-service payments to episodebased "bundled payments" Cut $18 B Eliminate "double quality bonuses" paid to Medicare private insurance plans in certain urban counties Cut $389 B Raise the basic Medicare Part B and Part D premiums to 35 percent of each program's costs, phased in over five years Cut $703B Provide a fixed amount from the federal government to the states for Medicaid based on spending per enrollee (per-capita cap) Cut $64 B Impose caps on some medical malpractice lawsuits. Limits include caps on non-economic ("pain and suffering") damages Cut $28 B Raise the full retirement age for Social Security by roughly two months a year until it reaches age 70 , which would be around 2038 Cut $785 B Raise Social Security's maximum taxable amount of wages to $285,000 a year, increasing the share of total earnings in the country subject to the system's payroll tax to 90 percent Cut \$202 B Base cost-of-living adjustments (COLAs) for Social Security benefits and other "mandatory spending" programs on what economists consider a more realistic measure of inflation Cut $77 B Change the way initial Social Security benefits are calculated, tying them to inflation instead of wage growth for all but the lowest-earners Spend $27 B Set Social Security's special minimum benefit to equal 125 percent of the monthly poverty level and index it to wage growth (choose as many as you like) Cut $265 B Eliminate the estate tax (currently effects estates worth over $11 million per individual, \$22 million per couple) Cut 1,896 B Eliminate taxes on capital gains and dividends Status Quo Make no changes to the 2017 cuts to the individual income tax Cut $650B Extend the cuts in the Individual Income Tax that are set to expire at the end of 2025 Raise $1,169 B Repeal the cuts in the Individual Income Tax passed in 2017 that are set to expire at the end of 2025 Raise $176 B Charitable deductions will be allowed only if contributions are a large enough percentage ( 2 percent) of one's income Raise $256 B Limit the exemption for employer-provided health care contributions from an employee's income for tax purposes Raise $105 B Eliminate the "step-upped basis" for determining capital gains taxes when inherited assets are sold Raise $188 B Eliminate certain tax credits for higher education and gradually eliminate the tax deduction for student loan interest 3. Complete the "Federal Budget Challenge" at the following. This individual exercise will give you a glimpse into the challenges our federal lawmakers face when trying to construct a federal budget that is fiscally responsible and also pleases a wide variety of constituents. After completing the exercise, provide a summary of how you did. -did you increase or decrease the deficit, and by how much? what areas did you increase/decrease spending the most? -in which areas did you struggle most to make a decision? what did you learn from this exercise? Investments (choose as many as you like) Spend $78 B Provide all lower-income and middle-income families with children under the age of three access to affordable child-care programs Spend $30 B Establish a National Infrastructure Bank that would provide loans and grants for infrastructure projects across the country Spend $67B Fully pay the tuition of all students who are eligible for Pell grants and allow them to use those grants to fund living expenses, effectively providing them with two years of free community college General Government Spending (choose as many as you like) Cut $20B Eliminate federal subsidies for AMTRAK and other intercity rail systems, including high-speed projects Cut $20 B Reduce Department of Energy funding by 25 percent over 3 years on research into new energy technologies Cut $21 B Reduce subsidies the federal government provides agricultural producers to help buy crop insurance Cut $93 B Eliminate NASA's human space exploration program and space operations programs Cut $32 B Limit forgiveness of graduate student loans by increasing the percentage of income included in loan payments and the length of time for repayment before loans are forgiven. Cut $53 B Reduce grants to state and local governments by 50 percent primarily in areas like education, the environment, housing and Department of Justice related programs. Cut $75 B Decrease spending on ship construction to the 30-year. average, reducing the number of ships that the Navy is scheduled to purchase over the next 30 years Cut $16 B Halt production of the F-35 fighter and instead purchase the most advanced versions of older, non-stealth fighter aircraft that are still in production Cut $45 B Defer the development of a new long-range bomber for the Air Force until after 2028 Cut $18 B Cap basic pay raises for military service members at half of a percentage point below the increase in avorage wages and salaries in the private sector Cut $51 B Reform TRICARE health insurance products for some multary families and military retirees to bring cost sharing more in line with private-sector health insurance Cut $145 B Reduce funding for international affairs programs by 25 Cut $109 B Eliminate Affordable Care Act exchange subsidies for those earning between 300 and 400 percent of the federal poverty level Cut $158 B Add a "public plan" to the ACA's health insurance exchanges Cut $419 B This "premium support option would restructure the Medicare program to one that provides seniors with money to purchase private insurance Cut $47 B Convert Medicare from fee-for-service payments to episodebased "bundled payments" Cut $18 B Eliminate "double quality bonuses" paid to Medicare private insurance plans in certain urban counties Cut $389 B Raise the basic Medicare Part B and Part D premiums to 35 percent of each program's costs, phased in over five years Cut $703 B Provide a fixed amount from the federal government to the states for Medicaid based on spending per enrollee (per-capita cap) Cut $419B This "premium support" option would restructure the Medicare program to one that provides seniors with money to purchase private insurance Cut $47 B Convert Medicare from fee-for-service payments to episodebased "bundled payments" Cut $18 B Eliminate "double quality bonuses" paid to Medicare private insurance plans in certain urban counties Cut $389 B Raise the basic Medicare Part B and Part D premiums to 35 percent of each program's costs, phased in over five years Cut $703B Provide a fixed amount from the federal government to the states for Medicaid based on spending per enrollee (per-capita cap) Cut $64 B Impose caps on some medical malpractice lawsuits. Limits include caps on non-economic ("pain and suffering") damages Cut $28 B Raise the full retirement age for Social Security by roughly two months a year until it reaches age 70 , which would be around 2038 Cut $785 B Raise Social Security's maximum taxable amount of wages to $285,000 a year, increasing the share of total earnings in the country subject to the system's payroll tax to 90 percent Cut \$202 B Base cost-of-living adjustments (COLAs) for Social Security benefits and other "mandatory spending" programs on what economists consider a more realistic measure of inflation Cut $77 B Change the way initial Social Security benefits are calculated, tying them to inflation instead of wage growth for all but the lowest-earners Spend $27 B Set Social Security's special minimum benefit to equal 125 percent of the monthly poverty level and index it to wage growth (choose as many as you like) Cut $265 B Eliminate the estate tax (currently effects estates worth over $11 million per individual, \$22 million per couple) Cut 1,896 B Eliminate taxes on capital gains and dividends Status Quo Make no changes to the 2017 cuts to the individual income tax Cut $650B Extend the cuts in the Individual Income Tax that are set to expire at the end of 2025 Raise $1,169 B Repeal the cuts in the Individual Income Tax passed in 2017 that are set to expire at the end of 2025 Raise $176 B Charitable deductions will be allowed only if contributions are a large enough percentage ( 2 percent) of one's income Raise $256 B Limit the exemption for employer-provided health care contributions from an employee's income for tax purposes Raise $105 B Eliminate the "step-upped basis" for determining capital gains taxes when inherited assets are sold Raise $188 B Eliminate certain tax credits for higher education and gradually eliminate the tax deduction for student loan interest