Debtbusters Group (#) Paper
Names:
Introduction
Overall, our decisions on the proposals in reducing the deficit have been pretty straightforward in terms of majority rule except for one proposal being the extension of cuts in the Individual Income Tax. Our group tends to agree on proposals that we believed would help the deficit in the long run if we invested some more money into certain programs such as the proposal for the reduction of the Department of Energy fundings which we voted no on. We believed that a gradual path of increasing taxes along with the plan of our investments now to affect the economy along with the deficit greatly as we can provide funding for programs that can help reduce our need for certain costs on energy and increase consumer opportunities by providing subsidies.
Deficit Impact
Our group enacted 3 of the 7 options to reduce the deficit, and 1 of the 2 options to raise it. This resulted in a $481 billion cut to the 2019 deficit of $897 billion (53.6% reduction). This impact comes from proposals 2, 3, 5, and 8, which we acted on. We did not enact proposals 1, 4, 6, and 7, as they did not gather enough support to constitute a majority.
Proposal 1 offered to reduce the Department of Energy’s funding for energy technology development, which would have reduced the deficit by $20 billion. This proposal was unanimously refused with all 6 of our members voting against it.
Proposal 2 suggested expanding the access to the Child Care and Development Fund, increasing its coverage to all eligible families who want the subsidy. This proposal was accepted by a vote of 4-2, increasing the deficit by $78 billion.
Proposal 3 presented the option of canceling the military’s purchase of F-35 stealth models, and purchasing non-stealth F-16 and F/A-18 models instead, as it would be less costly to do so. This proposal was supported with a vote of 5-1, reducing the deficit by $16 billion.
Proposal 4 would have eliminated the Affordable Care Act subsidies for those earning between 300 and 400 percent of the federal poverty level, reducing the deficit by $109 billion. However, the proposal was ultimately rejected by a vote of 2-4, so it had no impact on the deficit.
Proposal 5 proffered gradually raising Social Security’s full retirement age to 70, reducing the deficit by $28 billion. It was accepted by the majority with a vote of 4-2.
Proposal 6 presented 2 options. It could extend the 2017 tax cuts to the Individual Income Tax that were set to expire at the end of 2025 (raising the deficit by $650 billion), or it could repeal them entirely and immediately instead (reducing the deficit by $1.169 trillion). However, neither of these options managed to gain a majority in the end, so no action was taken by our group in regards to the tax cut.
Proposal 7 was a motion to limit the tax deductions on charitable donations to only those that exceeded 2% of the taxpayer’s AGI, which would reduce the deficit by $176 billion. It was not enacted, with a final vote of 1-5 in support.
The 8th and final proposal was to increase revenue by raising the federal gas tax by $0.35 per gallon and then indexing the tax to inflation. This option was supported by a vote of 4-2, reducing the deficit by $515 billion.
Approved Proposal
Our group enacted 3 of the 7 options to reduce the deficit, one proposal discussion topic that we enacted by a vote of 4-2 was “Making a Change to Social Security. The idea behind the change in Social Security funds demonstrates that Social Security funds will be depleted by 2040. Social Security is the United States Government’s biggest budget category, comprising around 24% of total federal spending. The purpose of creating the Social Security fund is by having the current workers pay into the Social Security Account, which would assist in lowering the rate of elderly poverty. When Social Security was created, the average lifespan was 61 years old, today it is 79 years old. This increase in lifespan has resulted in a shift to the worker/retiree ratio from 1960 being 5:1 to now being 3:1. The proposal suggested that the United States Government should gradually raise the age to 70 years old for persons to be able to receive full retirement of their Social Security benefits. The steady increase in age necessary to receive Social Security will assure that the funds will not diminish by 2040. The policy option to these gradual measures would be that for those workers born before 1938, the age for full eligibility which is currently 65 years old would remain in place. The next level of the proposal would be for workers born between 1939 through 1959 to suggest that the proposed gradual measure would increase the age to 67 years old to receive full Social Security retirement benefits. The current workers born after 1973 would obtain full retirement benefits for Social Security at the age of 70. This proposal to “Making Changes to Social Security” would have a negative $28 billion effect on the US deficit over the course of time.
While considering the pros and cons of this proposal, “Making Changes to Social Security”, our group voted to authorize this decision. Some Cons that were considered was the public disapproval, poverty risk, and work quality. The proposal impacts the current members of the workforce negatively by requiring more years from them to receive the subsidies of full retirement benefits from Social Security. An effect that this proposal could have is the poverty risk on the plan primarily damaging those who are straining financially and rely on the program’s funds, which this group could potentially fall below the poverty threshold because of this proposal. This could ultimately influence the overall economy. Another effect is the work quality of this proposal when increasing the retirement age to 70 could impact the quality of work besides putting undue strain upon unfit older workers to work which would require them to work an additional 5 years longer.
Our group decided to pass this proposal for “Making Changes to Social Security”, by a vote of 4 to 2, because the pros outweigh the cons, and the team, by a majority vote of yes, determined that the potential benefits outweighed any harmful effects. Once consideration is that the lifespan of people has increased to an average age of 79 years old which could affect the health expectancy to rise from the advances in medicine. In addition, the increased workforce numbers create a saving on the expense of the cost of providing Social Security by reducing (or delaying) the number of eligible members for the benefits. Through this proposal the sustainability of the program will become stable by reducing the increase in Social Security’s cost. This will avoid the possibility of abandoning the Social Security program altogether and avoid an increase in the National Debt.
The perceptions of the public reaction to this proposal, “Making Changes to Social Security” is undetermined, but ought to be well received because of the measures that will be taken to make gradual change to the age of full retirement for Social Security benefits. When enacting this proposal, it is inevitable due to a lack of government funds to support the Social Security system that it will ultimately be depleted and no longer exist to further assist the decline of elderly poverty. This proposal could potentially be the least harmful way of resolving this matter of continuing the Social Security funding to assure that all future American workers can receive full retirement benefits when they come to the age of retirement.
Rejected Proposal
For our first proposal, we were tasked with deciding whether or not we should reduce or eliminate the Department of Energy funding for energy technology development. With our group’s discussion and considering all pros and cons. Each member of our group decided in the end to refuse the proposal. Each side of the argument offered valid reasons as to why we should support or not support the proposal. However, our goal is to reduce the deficit as substantially as possible while considering the positive and negatives outcomes to the proposal.
The pros of the proposal came up short as our group only saw that the main pro of accepting this proposal was that it would reduce the deficit by $20 billion. When we compared the short- and long-term effects, we decided in the end that the reduction of $20 billion dollars of the deficit vastly under weighed the effects of refusing the proposal.
Refusing the proposal was the more logical choice in our eyes. Where we as a group saw that refusing the proposal would allow more job opportunities, affect how we handle our future energy crisis when we run out of fossil fuels, result in substantial and consistent energy sources, reduce greenhouse gases, and improve living conditions.
With increased job opportunities, alternative sources of energy, and countless more benefits resulting from not accepting the proposal. I expect the public to react positively to our decision.
Demographics
Besides the 536 members of Congress as of last year, we have a fairly diverse group of six people most of which are in their 20s and are currently still in college. Members of Congress were around their 50s and 60s along with a college education who’s dominant professions consist of public service/politics, business, and law. Some of us are not majoring in government or other branches that also leads us to use more of our common knowledge skills than our knowledge we might have in economics and politics. Our opinions might be more swayed towards helping the people along with the economy as we might be more focused on helping those like us rather than looking at it in a statistical way.
Most of us are in the middle class with one member being the lower class, two of us being Asian American, two being Caucasian, one Hispanic, and one African American with four of us being mixed. Congress had 56 African Americans, 56 Hispanics, 20 Asian Americans, and 4 Native Americans which is a record number.
With our group being younger along with having more of an economic challenge compared to those in Congress, we mostly try to focus on the upcoming events ahead along with how we can maintain our future as we still have a long way to go before we hit our 50s and 60s along with the generations coming behind us. We also see the challenges our generation is facing currently along with how things are being handled due to the pandemic which is another driving factor as unemployment is a big factor in our economy right now. We also are a bit more willing to make changes that will be slow as we can see the progress it may or will make as we have more time to see it through while some other proposals in Congress are passed due to it’s quick enactments and solution to a short term problem.
Political Effects
Based on my group’s acceptance and rejections of proposals, we can acknowledge the up and downs that would come with voter support but we still have a fair chance at re-election. We have made a -$481 billion impact on the deficit while doing our best to maintain positive voter’s support.
Proposal number 2 offers the Child Care and Development Fund to give subsidies to families who are under the 200 percent poverty line in order for them to obtain affordable child care. The groups of people who meet this criteria will most likely be in favor of the proposal because they will have less of a worry about their children not having a place to go while they have to work. Most voters are in support of creating stable homes and supportive environments, which is something this subside could help increase. With many parents having to work outside the home, childcare is essential for them to maintain adequate lives but good childcare is unaffordable for so many people who barely are getting their basic needs. Not having affordable child care leads to parents missing out on work and losing money which ultimately keeps them under this poverty line constantly needing government support.
The 5th proposal, Making Changes to Social Security, will slowly raise Social Security’s full retirement age to 70 while still giving reduced funds to those in need by the age of 62. Some groups in California such as those who work in physically demanding jobs may not favor this idea because it can become hard to complete those tasks as we age. Another issue that could come about is that low-wage workers may find issues with being able to keep and depend on these jobs as they get older. On the other hand, these issues would still give access to benefits for those who do not meet the age requirement. Although there would be backlash from some voters, there is still a fighting chance for other voters to agree to the benefits.
Another proposal, which would raise the gas tax by 35 cents per gallon and index them to inflation, was accepted by our group. This proposal comes with benefits such as economic growth, decreased carbon emissions, and improved road maintenance but could still cause voters to be upset. Groups such as those in the lower class may find it hard to afford to pay the extra money which could cause some resistance in the beginning. Because so many people rely on their cars for transportation this could open up the idea of more electric cars but before that happens people wouldn’t have a choice but to still buy gas in order to continue making money. Overall this could have some positive effects on the environment and could grab the interest of environmentalists.
Real World Politics
The difference between what group 5 has done to balance the budget was a watered-down version of what really happens in real-world politics. The group acting as congress would get a proposal and would need to vote on every proposal given in order to lower or possibly raise the Debt of the U.S. Over the course of several weeks we voted on a total of 8 proposals with a variety of topics. In the end, we had a -481 billion-dollar effect on the deficit. To sum it up our group only covered a small portion of what is necessary for the debt to be affected.
The real world has many more steps when it comes to balancing the budget. To start before congress can vote on anything proposals must be made by departments and agencies and then given to the president to help make a budget request. That request is then handed over to Congress to vote on and come to an agreement. Both the house and the senate have their own versions of each bill and go to a conference committee to merge them. After they approve it the bill goes to the president and needs to be signed and approved. After this, the president can either approve or reject the bill. In the event that the president does not approve there can be no budget for the next fiscal year. If that were to happen government services could stop.
As you can now tell we did not cover the final process of affecting the U.S budget but got experience on how congress would but heads and persuade each other to think what is best for the public as well as the debt. And balancing both is not as easy as it seems and could pose a challenge because even when you have your best interest someone will be affected.
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