Chapter 2: The Logic of the Budget Process 99 The following data are from a recent federal budget: 2. Federal government discretionary outlays ($ billions) 2000 2014 Defense outlays 294,363 603,457 Nondefense outlays 1,494,587 2,902,632 Composite outlay deflators (2009 = 1.00) Defense 0.7235 1.0510 Nondefense 0.8134 1.0893 a. Compute the percentage change for federal defense and nondefense outlays in current-year dollars from 2000 to 2014. Divide that change into its real and price components. b. For nondefense outlays, convert the deflator base to 2000 = 1.0000, and recal- culate the absolute change in these real dollars and compare that with the absolute change with 2009 = 1.000. Why might budget strategists try to use one or the other of these two numbers to argue for more or less spending? Is either of the two base years more correct: Explain. Compute and compare the real percentage increases using the two different base years. 3 . Identify the strategy represented in each of the following arguments taken from budget discussions: a. A bill to increase the number of women eligible for Medicaid-funded prenatal assistance in this state would not only save lives, but also cut state costs for care of low-birth-weight babies and children with disabilities. Studies have shown that every dollar spent on prenatal care reduces long-term health-care expenditures by $3.38. b. The change in the Board of Health sanitation position from full-time to part- time will demolish the inspection program. Rather than accepting the weak- ened program, we would prefer that the program be terminated. c. Faculty salaries at Enormous State University rank seventeenth among eigh- teen universities with which it competes. Substantial improvements in pay must come in this budget year if major defections are to be prevented. d. In March, the second of two school-funding referenda failed (by a 2-1 mar- gin) in the Riverside-Brookfield (Illinois) School District. The school board responded by proposing the elimination of the girls' badminton, swimming, and cross-country teams; the boys' soccer, tennis, and wrestling teams; seven additional coaching programs; the cheerleading program; and the Pup-ettes (a pompom squad). A phase-out of the German language program at the school had been started before the failure of the referendum. e. The Unipacker II will return its full purchase cost in lower labor and mainte- nance expense within two years of initial operation. An editorial in the Philadelphia Inquirer (September 24, 2008) argues for a "Bional sales tax to support funding for the arts on these grounds: "Making