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Please note that the numbers used in this document are for the purposes of this simulation only.
1
Federal Budget Simulation Lesson Plan
Introduction
In this lesson plan, high school students debate our nation’s priorities by establishing their own
“simulated” federal budgets. After analyzing the FY 2018 discretionary budget, students will be
asked to design a FY 2019 budget with a group of their peers. Through the simulation, students
will learn the importance of the budgeting process and that decisions concerning how our
government spends its money form the basis of most national government policy.
This lesson plan is designed for 4 to 5 class periods of 50 minutes. It can be adapted, however, to
accommodate other schedules. This program can also be adapted for a school-wide event, with
teachers facilitating groups of 10-15 students in their budgeting sessions.
Objectives
Students will:
evaluate how money had been allocated in the proposed FY 2018 discretionary budget.
consider the additional needs of our nation in FY 2019.
discuss the programs and issues that they think are important and consider how much
money should be allocated to those programs.
discuss the pros and cons of deficit spending.
design their FY 2019 discretionary budgets.
present their rationales for their budgets to the larger group.
National Curriculum Standards
Council for Economic Education: Standards 16, 17
Center for Civic Education: Standards I.A, II.C, III.B
MA Curriculum Frameworks: American Government – USG.1.3, USG.3.6, USG.5.10
Materials
Handouts:
Understanding the Federal Budget
What Role Should the Government Play in the Economy?
Rules of the Game
Functional Areas with Budget Details
National Defense Spending
Special Interest Groups Requests
Tally Sheet
Game Board (to be enlarged to 11” X 17”)
134 poker chips
Procedure
1. For homework, have students read Understanding the Federal Budget and answer the reading
comprehension questions.
Day One
2. Discuss the reading in class and the process of federal budgeting.
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2
3. For homework, have students read What Role Should the Government Play in the Economy?
and ask them to provide a written response to the question “What is your view of the
government’s role in the economy?”
Day Two
4. Discuss the reading and their responses to the question. Highlight differences between
discretionary and mandatory spending. (20 minutes)
5. Provide students with the Rules of the Game handout. Discuss the rules and explain that
students will only be dealing with government spending, not taxes—and only with discretionary
spending, not mandatory spending. Remind students that at the end of the group budgeting, they
will need to be able to explain their budgets, i.e., What programs were they eliminating by
cutting a particular functional category? What programs were they enriching by adding to a
particular functional category? (30 minutes)
Please note that the Budget Control Act of 2011, as amended by the Bipartisan Budget
Act of 2018, establishes discretionary spending limits for FY 2019. These limits are
approximately the same as the outlays that President Trump proposed in his FY 2018
budget. Therefore, for this exercise students may either maintain total discretionary
spending at the same level as Trump’s proposed FY 2018 budget, or decrease it. They
cannot add to the total spending. Also, in keeping with the law, they cannot move any
chips they may want to eliminate in the National Defense spending category to Non-
Defense spending categories and vice versa. However, you may decide that you want to
change the rules and provide your students with the freedom to disregard the caps and
add chips to National Defense and/or Non-Defense discretionary spending categories.
Have students review the materials for homework and ask them to be prepared to discuss and
create their budgets the next day.
Day Three
6. Divide students into groups of 5-6. Supply each group with:
(a) a game board and poker chips
(b) Functional Areas with Budget Details handout
(c) National Defense Spending handout
(d) Special Interest Groups Requests
(e) Tally Sheet
7. Ask students to consider first how the funds were allocated for President Trump’s proposed
FY 2018 budget. Do they agree with his priorities? What would they like to see changed? What
categories/programs are important to them?
8. Ask students to read the Special Interest Groups Requests and consider whether or not it
would influence their budgeting decisions.
9. Have students reconfigure the budget to represent their own priorities. As you monitor each
group’s progress, make sure they know that they will need to justify their budgeting decisions to
the rest of the class. When they are finished, have them fill in the tally sheet and submit it to you.
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3
If students need more time to budget, you can have them continue their discussions the following
day.
Day Four
10. Share the budgets of all the groups with the class, and have students discuss their decisions.
11. For a follow-up to the students’ budgeting, have them consider the following questions:
A. What programs did they choose to cut? Why did they choose to cut those programs
over others?
(1) How will the program cuts they have made affect specific groups (the elderly,
students, environmentalists, people who are poor, foreign aid recipients)?
(2) Have them write a letter to the head of an organization whose funding will be
cut and explain why they have cut the funding.
B. What programs did they choose to enrich? Why did they choose to enrich those
programs over others?
(1) How will the programs they have enriched affect specific groups (the elderly,
students, environmentalists, people who are poor, foreign aid recipients)?
(2) Have them write a press release to be read by the president’s press secretary,
describing the reasons they have enriched these programs.
C. What are the tradeoffs they foresee in diminishing some programs while protecting or
enriching others? What might be some of the political “fallout” of their decisions? How
might they address this “fallout”? Have students write a brief paper on these tradeoffs and
respond to the potential political “fallout.”
D. Were there any arguments made by their classmates during the budgeting workshop
that surprised them? Why?
Sources
Most of the figures used for this budget simulation program were taken from the Outlays section
of “Supplemental Materials” Table 25-1 – Budget Authority and Outlays by Function, Category
and Program:
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
The descriptions of the functional areas were mostly drafted from Appendix III of the Catalog of
Federal Domestic Assistance: https://www.cfda.gov/downloads/CFDA_2009.pdf
Some of the figures used in the “Understanding the Federal Budget” handout were taken from
Table S-4: Proposed Budget by Category.
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf
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4
Other Valuable URLs
The Federal Budget: Overview and Issues for FY 2018 and Beyond
https://fas.org/sgp/crs/misc/R44881.pdf
This is a June 30, 2017 report from the Congressional Research Service.
National Priorities Project
http://nationalpriorities.org/
This organization provides analyses of federal data “so people can prioritize and influence how
their tax dollars are spent.” Their website includes a summary of the federal budget process:
https://www.nationalpriorities.org/budget-basics/federal-budget-101/federal-budget-process/
The Concord Coalition
http://www.concordcoalition.org
This organization describes itself as “dedicated to educating the public about the causes and
consequences of federal budget deficits, the long-term challenges facing America's unsustainable
entitlement programs, and how to build a sound economy for future generations.”
America's Historical Struggle with Debt and Taxes
http://www.youtube.com/watch?feature=player_embedded&v=k7ktBe3TUIk
This 10-minute video from the PBS NewsHour (2012), includes Paul Solman’s interview with
Simon Johnson.
'Red Ink': Understanding Why the U.S. Has So Much Debt
https://www.youtube.com/watch?v=5NOcrbaLd10
This is Paul Solman’s 2012 interview with The Wall Street Journal's David Wessel about his
new book "Red Ink," a primer to the budget. It is dated, but interesting.
Status of Appropriations Legislation for FY 2018
https://www.congress.gov/resources/display/content/Appropriations+for+Fiscal+Year+2018
This web page can help you keep track of what parts of the FY 2018 budget have been passed,
and what is pending.
Bureau of the Public Debt
http://www.treasurydirect.gov/govt/reports/pd/mspd/mspd.htm
This U.S. Department of the Treasury website includes a link to the most current calculation of
the U.S. debt.
Foreign Assistance
https://www.foreignassistance.gov/
This government website provides maps and data that show how and where our foreign
assistance dollars are spent.
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5
Understanding the Federal Budget
1
"This Budget’s defining ambition is to unleash the dreams of the American people. This requires
laying a new foundation for American Greatness."
--From Message from the President on the Fiscal Year 2018 Budget,
President Donald J. Trump, May 23, 2017
1. Introduction
One of the most important documents produced each year by the president and Congress is the
federal budget. Through a lengthy process, government leaders determine how much money they
expect the government to receive during each of the next several years, where it will come from,
and how much to spend to reach their goals in areas such as national defense, foreign affairs,
social insurance for the elderly, health insurance for the elderly and poor, law enforcement,
education, transportation, science and technology.
You will be participating in a simulation in which you will be making decisions similar to those
made every year by the government to determine next year’s federal discretionary budget.
The president and Congress decide how much spending they will finance through taxes, and
debate how to use the budget to help the economy grow or to redistribute income. More recently,
they have been debating how long we can sustain large budget deficits that many government
leaders feel have been necessary to stimulate our economy. In this overview, we will discuss
some of these decisions--that is, how the government raises revenues and where it spends money.
1
Adapted from the Office of Management and Budget publications, A Citizen’s Guide to the Federal Budget, FY
2001and FY 2002. Note that most numbers and dates have been adapted to reflect the 2017 fiscal year.
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6
2. What Is the Budget?
The federal budget is:
a plan for how the government spends taxpayers’ money.
What activities are funded? How much should we spend for defense, national parks, the FBI,
Medicare, and meat and fish inspection?
a plan for how the government pays for its activities.
How much revenue does it raise through different kinds of taxes--income taxes, excise taxes
(taxes applied to various products, including alcohol, tobacco, transportation fuels and
telephone services), and social insurance payroll taxes?
a plan for government borrowing or the repayment of borrowed funds.
If revenues are greater than spending, the government runs a surplus. If expenses are greater
than revenues (as is currently the case), the government runs a deficit.
something that affects the nation's economy.
Some types of spending--such as improvements in education and support for science and
technology—increase productivity and raise incomes in the future.
Taxes, on the other hand, reduce incomes, leaving people with less money to spend.
something that is affected by the nation's economy.
When the economy is doing poorly, people are earning less and unemployment is high. In
this atmosphere, revenues decrease and the deficit grows.
an historical record.
The budget reports on how the government has spent money in the past, and how that
spending was financed.
The 2019 budget document embodies the president's budget proposal to Congress for fiscal year
2019, which begins on October 1, 2018. It reflects the president's priorities and proposes his
initiative to meet our national and international needs.
The federal budget, of course, is not the only budget that affects the economy or the American
people. The budgets of state and local governments have an impact as well. State and local
governments are independent of the federal government, and they have their own sources of
revenue (taxes and borrowing).
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7
Where the Money Comes From
The money that the federal government uses to pay its bills--its revenues or receipts--comes
mostly from taxes. For FY (fiscal year) 2018, the federal government forecasted that it would
receive $3.7 trillion in revenues.
Revenues come from these sources:
Table 1. FY 2018 Estimated Federal Receipts
Source
Amount
(Billions)
Percentage
Individual Income Taxes
1,836
50%
Payroll Taxes (Social Security, Medicare,
Unemployment insurance, and other retirement)
1,224
33%
Corporate Taxes
355
10%
Miscellaneous*
270
7%
Estate and Gift Taxes
24
1%
Allowance for Repeal & Replace Obamacare**
-55
-2%
Total Collected
3,654
100%
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf
Summary Tables: Table S-4. Proposed Budget by Category
The government collects customs duties, excise taxes (taxes applied to various products, including alcohol, tobacco,
transportation fuels and telephone services), and other miscellaneous revenues--e.g., Federal Reserve earnings, fines,
penalties, and forfeitures.
** This item assumes tax cuts and revenue reductions from repealing and replacing the Affordable Care Act
(Obamacare) taxes and mandates.
Chart 1. FY 2018 Estimated Federal Receipts
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8
Spending
To better understand federal spending, let’s look briefly at President Trump’s proposed federal
budget in which the government projected it would spend approximately $4.1 trillion. Federal
spending is divided into mandatory spending which is required by law, and discretionary
spending which is decided upon yearly by the president and Congress.
Discretionary spending is what the president and Congress must decide to spend for the next year
through annual appropriations bills. It includes money for such activities as the FBI, housing,
education, space exploration, highway construction, defense, and foreign aid. Discretionary
spending for FY 2018 was estimated to account for 30% of all federal spending.
Mandatory spending, which accounts for approximately 70% of all FY 2018 spending, is
authorized by permanent laws, not by the annual appropriations bills. It includes entitlements--
such as Social Security, Medicare, Medicaid, and the Supplemental Nutrition Assistance
Program (formerly known as the Food Stamp Program)--through which individuals receive
benefits because of their age, income, or other criteria. It also includes interest on the national
debt. The only way the president and Congress can change how much is spent in these accounts
is to change the laws which dictate the amount of spending on these mandatory programs.
The largest federal mandatory spending program is Social Security, which provides monthly
benefits to nearly 62 million retired and disabled workers, their dependents, and survivors.
2
The government projected it will spend approximately $1 trillion on this program, which they
calculated would account for approximately 25% of all federal spending.
Medicare provides health care coverage for over 55 million elderly Americans and people
with disabilities.
3
The government projected it will spend $582 billion on this program,
approximately 14% of all federal spending.
Medicaid provides health care services to millions of Americans, including the poor, people
with disabilities, and senior citizens in nursing homes. This program accounts for $404
billion of the budget, approximately 10% of all federal spending.
Other entitlements provide benefits to people and families with low incomes such as the
Supplemental Nutrition Assistance Program (SNAP) and veterans' pensions. The remaining
mandatory spending mainly consists of federal retirement and insurance programs,
unemployment insurance, and payments to farmers. All these remaining mandatory spending
items account for $570 billion, approximately 14% of all federal spending.
Discretionary security spending for FY 2018 (funding for the Pentagon, homeland and border
security, etc.) was budgeted at approximately $643 billion, comprising approximately 16% of
all spending.
Discretionary spending on programs not related to defense includes a wide array of initiatives
such as education, training, science, technology, housing, transportation, and foreign aid, was
budgeted at $601 billion, and represents approximately 15% of the budget.
2
https://www.ssa.gov/news/press/factsheets/basicfact-alt.pdf
3
https://blog.medicare.gov/2015/07/27/medicare-and-medicaid-50-year-anniversary/
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9
Interest payments are payments made to pay back the interest on the federal debt. This
accounts for $315 billion or approximately 8% of the federal budget. As the government
increases the size of its debt, the amount of interest that must be paid increases.
Table 2. Estimated Federal Spending in FY 2018
Budget Item
Amount
(Billions)
Percentage
Discretionary:
Defense
643
16%
Non-Defense
601
15%
Mandatory:
Social Security
1,005
25%
Medicare & Medicaid
986
24%
Other Mandatory
570
14%
Net Interest on Debt
315
8%
Allowance for Obamacare Repeal and
Replace*
-30
Allowance for Infrastructure Initiative
5
Total
4,095
100%
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/budget.pdf
Summary Tables: Table S-4. Proposed Budget by Category
*This item assumes a savings in mandatory spending from the repeal and replacement of the Affordable Care Act (Obamacare).
Chart 2. Estimated Federal Spending in FY 2018
Discretionary:
Security
16%
Discretionary:
Non-security
15%
Social Security
25%
Medicare &
Medicaid
24%
Other
Mandatory
14%
Net Interest
on Debt
8%
Infrastructure
Initiative
>1%
3. How Does the Government Create a Budget?
The president and Congress both play major roles in developing the federal budget.
The President's Budget
The law requires that by the first Monday in February, the president submit to Congress his or
her proposed federal budget for the next fiscal year, which begins October 1. For the fiscal year
2019 budget, President Trump was supposed to submit his budget to Congress on February 5,
2018, however, there have been several instances over the years in which the budget proposal
has been delayed.
The White House's Office of Management and Budget (OMB) prepares the budget proposal after
receiving direction from the president and consulting with his senior advisors and officials from
Cabinet departments and other agencies.
The president's budget is thousands of pages long and provides an abundance of details.
The Budget Process
Through the budget process, the president and Congress decide how much to spend and tax in
any one fiscal year. The president's budget is his plan for the next year. But it's just a proposal.
After receiving it, Congress has its own budget process to follow. Only after the Congress passes
and the president signs the spending bills has the government created its actual budget.
For fiscal year 2019--that is, October 1, 2018 to September 30, 2019--the major steps in the
budget process are outlined in Table 3 below.
Table 3. Major Steps in the Budget Process
Formulation of the president’s
budget for 2019
Executive Branch agencies develop
requests for funds and submit them
to the Office of Management and
Budget. The president reviews the
requests and decides what to include
in his budget.
February 2017 – January 2018
State of the Union Address
The president speaks to the country
about his priorities for the year
ahead.
Late January/Early February
2018
Budget preparation and
submission
The budget documents are
completed by the OMB and sent to
Congress.
January 2018 – February 2018
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2
Congressional action
Congress reviews the president’s
budget, develops its own, and
eventually approves spending and
revenue bills.
March 2018– September 2018
(see footnote #4 below)
President’s final approval
President signs spending and
revenue bills to make them law.
Late September 2018
4
Fiscal year begins
October 1, 2018
Budget implemented
Agency program managers begin to
spend (and raise) the money
approved by the Congress and the
president.
October 1, 2018 through
September 30, 2019
Action in Congress
Congress first passes a "budget resolution"--a framework within which the Members will make
their decisions about spending and taxes. It includes targets for total spending, total revenues, the
surplus or deficit, and allocations within the spending target for the two types of spending--
discretionary and mandatory.
In the simulation in which you will be participating, you will only be examining the discretionary
programs that are part of the federal budget. It is these programs that the president and Congress
must act upon each year.
Once Congress passes the budget resolution, it turns its attention to passing the annual
appropriations bills – ideally by the end of September. For many years, the annual appropriations
bills have not been passed by the beginning of the fiscal year and most government activities
were funded through “continuing resolutions” which keep funding no higher than the levels of
the previous fiscal year until the current budget is passed.
Congress begins by examining the president's budget in detail. Scores of committees and
subcommittees hold hearings on proposals under their jurisdiction. The president’s budget
director, cabinet officers, and other administration officials work with Congress as it accepts
some of the president's proposals, rejects others, and changes still others. Congressional rules
require that these committees and subcommittees take actions that reflect the budget resolution.
Monitoring the Budget
Once the president and Congress approve spending, a number of government agencies oversee
the budget in order to ensure that programs are well managed, are achieving the intended results
and are operating consistently within legal requirements.
4
It has been many years since Congress and the president have been able to finalize the federal budget before the
beginning of the fiscal year. See “Action in Congress” for more information.”
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3
4. Deficits and Debt
The federal government has run a deficit for 45 out of the last 50 years.
5
The size of the deficit is
determined by the amount of revenues the government collects through taxes and the amount of
money it spends.
When President Clinton was first elected in 1992, the federal budget was in a deficit. During the
1990s, as a result of a strong economy, the government brought in much higher revenues than
expected and began, by the end of the decade, to run a budget surplus. In 2002, as a result of
September 11, increased military spending and anti-terrorism spending, tax cuts, and the
downturn in the economy, the federal budget went back into deficit.
For the past several years, the U.S. economy has been recovering from an economic downturn
that began in 2007. Due to the downturn, the government collected fewer tax revenues and
passed bills to stimulate economic and job growth which reduced taxes further and added to
spending. Additionally, costs for entitlement programs such as Social Security, Medicare and
Medicaid increased. As a result, the non-partisan Congressional Budget Office recorded many
years of significant budget deficits (see Chart 4: The Federal Deficit on the following page). As
you can see from the chart, however, deficits have recently been shrinking—though in the last
two years there was a slight uptick. The next section will discuss some of the laws that have been
enacted since 2011 in response to federal deficits.
There are different economic arguments about whether running a large deficit is a good idea or
not. An increase in borrowing can be seen as a necessary response to a weak economy. Many
economists have argued the necessity of increased government spending as an investment to help
our economy grow. You might think of it as the way a family takes out a mortgage to buy a
house. Most people think taking out a mortgage is a good idea and an investment in a family’s
future. Credit card debt, on the other hand, is something that most families try to avoid as they
end up spending needlessly on the high interest on these accounts.
The Politics of Deficit/Debt Reduction
Deficits may be common, and may be necessary during difficult economic times, but many
government leaders have been concerned about how long significant deficits can be sustained,
and what can be done to lower them in the future. During FY 2011, members of Congress and
the president were unable to agree upon solutions to the problem of our long term debt. In
December 2010, a bipartisan commission (Simpson-Bowles Debt Commission) set up by
President Obama to investigate this issue, recommended an increase in taxes and future cuts in
Social Security and Medicare benefits, among other proposals. These recommendations are
politically charged, since both raising taxes and lowering benefits to these entitlement programs
can be politically unpopular. The Simpson-Bowles proposal did not gain the 14 votes required to
send the plan to Congress.
In August 2011, a crisis in government funding almost occurred when Congress appeared ready
to prevent the raising of the debt ceiling—the maximum amount of money the United States can
5
https://www.whitehouse.gov/omb/budget/Historicals (Table 1.1)
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4
borrow. The deal they reached at the last moment (the Budget Control Act of 2011) placed
annual caps on discretionary spending and created the Joint Select Committee on Deficit
Reduction (the “Super Committee”)--6 Senators and 6 Representatives from both parties who
were given the task of finding a minimum of $1.2 trillion in spending cuts spread out over 10
years.
Since the “Super Committee” failed to come to an agreement by their November 2011 deadline,
significant automatic spending cuts were triggered for FY 2013 in both national security and
non-security discretionary spending, cutting $85 billion from the FY 2013 budget. These across-
the board cuts (known as “sequestration”) meant drastic cuts not only for the military, but for
programs in areas such as medical research, clean air, and transportation. Sequestration was
never supposed to really happen— since it was distasteful to all sides of the budget debate, it was
designed as a “poison pill” to force a bipartisan budget agreement. Yet, because no bipartisan
agreement could be reached, these significant cuts were made in FY 2013.
Since FY 2013, there have been several crises and compromises in the course of passing the
annual federal budgets, including a 16-day government shutdown in October 2013 when many
government agencies and programs were not funded. There were also brief shutdowns in January
and February of 2018. The most recent compromise enacted in February 2018 (the Bipartisan
Budget Act of 2018) prevents a return, for FY 2018 and FY 2019, to the austere spending caps
required under the Budget Control Act of 2011.
($158)
($378)
($412)
($319)
($248)
($163)
($459)
($1,400)
($1,300) ($1,300)
($1,100)
($680)
($483)
($439)
($587)
($666)
($1,600)
($1,400)
($1,200)
($1,000)
($800)
($600)
($400)
($200)
$0
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Chart 4: The Federal Deficit
Dollar Amount in Billions
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Please note that the numbers used in this document are for the purposes of this simulation only.
5
Glossary
Appropriation
An appropriation is an act of Congress that enables federal agencies to spend money for
specific purposes.
Balanced Budget
A balanced budget occurs when total revenues equal total outlays for a fiscal year.
Bipartisan
Relating to the agreement or cooperation of two political parties that normally oppose
each other.
Budget Resolution
The budget resolution is the annual framework within which Congress makes its
decisions about spending and taxes. This framework includes targets for total spending,
total revenues, and the deficit, as well as allocations, within the spending target, for
discretionary and mandatory spending.
Continuing Resolution
Legislation used by Congress to fund the government if appropriations have not been
signed into law by the beginning of the fiscal year.
Debt
See “National Debt.”
Debt Ceiling
Enacted in 1917, this law limits the amount of money the United States can borrow.
Deficit
The deficit is the difference produced when spending exceeds revenues in a fiscal year.
Deficit Spending
Deficit spending occurs when the government’s revenues do not cover the cost of all its
spending and it borrows money to finance its programs, using that borrowed money to
pay for items in the budget.
Discretionary Spending
Discretionary spending is what the president and Congress must decide to spend for the
next fiscal year through annual appropriations bills. Examples include money for such
programs as the FBI, the Coast Guard, housing, education, space exploration, highway
construction, defense, and foreign aid.
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6
Entitlement
An entitlement is a program that legally obligates the federal government to make
payments to any person who meets the legal criteria for eligibility. Examples include
Social Security, Medicare, and Medicaid.
Excise Taxes
Excise taxes apply to various products, including alcohol, tobacco, transportation fuels,
and telephone service.
Fiscal Year
The fiscal year is the government’s accounting period. It begins October 1 and ends on
September 30. For example, fiscal year 2018 ends September 30, 2018.
Gross Domestic Product (GDP)
GDP is the standard measurement of the size of the economy. It is the total production of
goods and services within the United States.
Mandatory Spending (Non-discretionary Spending)
Mandatory spending (also called non-discretionary spending) is authorized by permanent
law. An example is Social Security. The president and Congress can change the law to
change the level of spending on mandatory programs—but they don’t have to do so.
National Debt
When revenues do not cover the costs of government spending, the government borrows
money to finance this deficit. The total it has borrowed over the years, but not repaid, is
the national debt.
OMB
Part of the Executive Office, the Office of Management and Budget assists the president
in the development and implementation of the federal budget.
Revenue
Revenues include the collections that result from government activity, such as taxes.
They do not include collections that result from the government’s business-like activities,
such as the entrance fees at national parks. Business-like collections are subtracted from
total spending to calculate outlays for the year.
Sequestration
Automatic, across-the-board, spending cuts that apply to all programs and activities of
government agencies.
Social Insurance Payroll Taxes
This tax category includes Social Security taxes, Medicare taxes, unemployment
insurance taxes, and federal employee retirement payments.
Surplus
A surplus is the amount by which revenues exceed outlays.
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Please note that the numbers used in this document are for the purposes of this simulation only.
7
Understanding the Federal Budget Review Questions
Please answer the following questions (use back of this page if necessary).
1. When the president and Congress begin to create a budget for the coming year, they must
make some key determinations. What are the three things they must determine?
1.
2.
3.
2. What is it called when the government spends more money than it brings in?
3. Where do most federal government dollars come from? (What is the federal government’s
primary source of funds?)
4. Explain the difference between mandatory and discretionary spending? Provide an example
of each kind of spending.
5. What program accounts for more federal spending than any other? Describe this program.
6. On what day is the president’s budget usually submitted to Congress for its approval?
7. What has to happen, and who has to agree, for the 2018 budget to finally become law?
8. Describe some of the crises in federal funding that have occurred since December 2010?
9. Explain how deficit spending can be helpful and/or harmful.
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8
WHAT ROLE SHOULD THE GOVERNMENT
PLAY IN THE ECONOMY?
From the National Council on Economic Education, New York, NY
Civics and Government: Focus on Economics, Unit II, Lesson 4
(http://ecedweb.unomaha.edu/lessons/fecgF.htm)
Although it is generally agreed that there is a role for the government in our national economy,
there is considerable disagreement over what areas the government should be responsible for and
how far the government should go in these areas. Some people feel that "big government" is a
problem, that government is doing too much. Others believe that the government sector of the
economy is being starved and that government should be allowed to do more. What the
appropriate role is for government is a basic question, and one that involves a great deal more
than economics.
Conservative View
Conservatives believe that the government's role should be severely limited. They feel that
economic and political freedom is likely to be undermined by excessive reliance on government.
Moreover, they tend to question the government's ability to solve social and economic problems.
They believe that faith in the government's power to solve these problems is unreasonable. They
point to the slowness of the government bureaucracy, the difficulty in controlling huge
government organizations, the problems political considerations can breed, and the difficulties in
telling whether government programs are successful or not. On the basis of these considerations,
they argue that the government's role should be carefully limited.
Liberal View
While conservatives question the government's ability to solve important social and economic
problems, liberals, on the other hand, question the market's ability to solve these problems. They
point to the important limitations of the market system, and they claim that the government can
do a great deal to overcome these limitations. Government can regulate private economic
activity. It can also provide goods and services that the private businesses produce too little of.
Liberals tend to be less concerned than conservatives about the effects on personal freedom of
greater governmental intervention in the economy.
Adapted from: Edwin Mansfield and Nariman Behravesh. Economics USA, New York: W.W.
Norton, 1992, pp. 592-594.
Question to consider:
1. What is your view of the government’s role in the economy? Do you think the government
does more harm or more good in our society? Ask a parent or teacher what their views are
on this important question.
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
9
Rules of the Game
Introduction
One of the main areas of debate in Washington involves the federal budget. When the
president and Congress make decisions concerning the budget, in essence they are setting
priorities for our country. Where should we be investing tax dollars? Which programs should be
cut? Which programs should be expanded? Should there be a tax cut and/or a tax increase? Is it
okay to continue to run a large deficit?
Here is the challenge. After analyzing the FY 2018 budget that President Trump proposed
last year, you must design a FY 2019 budget with a group of your peers.
You must set the priorities for your administration by looking at the current list of
programs and spending and deciding how much to invest in each category.
Total government spending for President Trump’s proposed 2018 fiscal year was
projected at 4.1 trillion dollars (4,100 billion). Please note that government spending on some
programs is fixed by laws and, therefore, cannot be manipulated in the budgeting process. These
programs are part of the mandatory budget. The two main programs which are mandatory in the
federal budget are Social Security (1 trillion dollars—25% of the total spending) and Medicare
(healthcare for the elderly—582 billion dollars—14% of the total spending). The net interest on
the national debt is estimated at 315 billion dollars—8% of total spending.
You will be budgeting for the main programs in the discretionary budget for the FY 2019
budget. After you have prepared your budgets in your small group sessions, you will return to the
main hall to explain the reasoning behind your budgets to the president.
Please note that the Budget Control Act of 2011, as amended by the Bipartisan Budget
Act of 2018, establishes discretionary spending limits for FY 2019. These limits are
approximately the same as the outlays that President Trump proposed in his FY 2018 budget.
Therefore, for this exercise you may either maintain total discretionary spending at the same
level as Trump’s proposed FY 2018 budget, or decrease it. You cannot add to the total spending.
Also note that due to the ravages of hurricanes Harvey, Irma and Maria, and the
destructive wildfires in California, additional spending has been required to help communities
recover from these disasters in FY 2018 and beyond. We have included estimated outlays for FY
2018 in the last row of your spending chart (p. 6), so that you are aware of this additional
emergency spending in the “Community and Regional Development” category.
Let’s Begin!
The rules of this simulation are fairly simple. You have 134 poker chips. Each chip represents
approximately $10 billion. You will begin by observing how the money had been allocated in
President Trump’s proposed FY 2018 budget to 14 discretionary spending categories—noted on
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Please note that the numbers used in this document are for the purposes of this simulation only.
10
your worksheet. You should then work with your group to consider how you might reconfigure
the chips in your FY 2019 budgets based on your group’s discussions of its priorities and values.
Please keep in mind that you cannot move any chips saved in National Defense into Non-
Defense categories and vice versa.
The following are 14 major spending categories with some of the associated functions noted
below:
1. National Defense
$708 ($643+$65) billion in discretionary spending. (71 chips will maintain current
level.)
Please note that for FY 2018, President Trump’s budget proposal included $643 billion
in outlays for National Defense, but that figure did not include the $65 billion in
supplemental spending that he requested to fund overseas military operations (Overseas
Contingency Operations). For our purposes, we have included those funds in the
National Defense discretionary category.
The raising, equipping, and maintaining of armed forces
Development and utilization of weapons systems (including nuclear weapons), and
related programs
Operations and maintenance of military facilities
Direct compensation and benefits paid to active military and civilian personnel
Health insurance and life insurance for military personnel
Military construction, family housing
Research, development, testing, and evaluation of new technology and weaponry
2. Transportation
$90.3 billion in discretionary spending. (9 chips will maintain current level.)
Highways
Mass transit and railroads
Air and water transportation (including air traffic control)
3. Education, Training, Employment, and Social Services
$88.8 billion in discretionary spending. (9 chips will maintain current level.)
Elementary, Secondary & Vocational education (including funding for public schools
in low-income neighborhoods and for special education)
Loans, scholarships and stipends for students to participate in education
Retraining adults for new vocations and employment counseling
Children and families services programs (including programs that help individuals
with physical or mental disabilities to obtain employment and live more
independently)
4. Veterans Benefits and Services
$77.9 billion in discretionary spending. (8 chips will maintain current level.)
Medical facilities, medical research, and medical care of veterans
Departmental administration
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11
5. Income Security
$66.2 billion in discretionary spending. (7 chips will maintain current level.)
Housing assistance for people with low and moderate income
Special supplemental food program for women, infants and children (WIC)
Low income home energy assistance
6. International Affairs
$65.3 ($53.3 + 12) billion in discretionary spending. (7 chips will maintain current
level.)
Please note that for FY 2018, President Trump’s budget proposal included $53.3 billion
in discretionary outlays for International Affairs, but that figure did not include the $12
billion in supplemental spending that he requested to fund Overseas Contingency
Operations (OCO). These OCO funds would contribute to Diplomatic and Consular
programs, international disaster assistance for famine prevention and relief, and
migration and refugee assistance. For our purposes, we have included those funds in the
discretionary category.
Foreign diplomacy (embassies and ambassadors)
Contributions to International Organizations & Peacekeeping (including support for
the UN)
Economic and military aid to countries that are friendly to us
Humanitarian aid to countries that need assistance
Promotion of democracy and protection of human rights throughout the world
7. Health
$57.0 billion in discretionary spending. (6 chips will maintain current level.)
Research into the causes and cures of diseases
Substance abuse and mental health services
Financing specialized programs for training health workers and researchers
Promotion of consumer and occupational health safety (which includes food safety
and inspection against harmful bacteria and bioterrorism)
Health care to low income, uninsured, vulnerable people who need government
support when they become ill
Funding for the Food and Drug Administration which assures the safety,
effectiveness, and security of medications and medical devices
8. Administration of Justice
$50.9 billion in discretionary spending. (5 chips will maintain current level.)
Federal law enforcement and judicial activities
Federal correctional activities (incarceration of people convicted of federal crimes)
Grants to state and local governments to assist them in operating and improving their
law enforcement and justice systems.
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Please note that the numbers used in this document are for the purposes of this simulation only.
12
9. Natural Resources and the Environment
$33.6 billion in discretionary spending. (3 chips will maintain current level.)
Promotion of conservation
Controlling and reducing air, water, and land pollution
Development and maintenance of recreational resources such as national parks
Work to clean up previously polluted sites, restore them to uses appropriate for
surrounding communities, and respond to and prevent waste-related or industrial
accident
10. General Science, Space, and Technology
$30.5 billion in discretionary spending. (3 chips will maintain current level.)
America’s space program
Grants for cutting-edge discoveries in science and engineering
11. Community and Regional Development
$22.1 billion in discretionary spending. (2 chips will maintain current level.)
Urban community and economic development programs, such as those providing
money for the revitalization of public housing, or money to build affordable housing
Disaster relief and insurance
Grants and loans for water supply and sewer systems
Regional economic development programs
Aids to businesses such as loans and loan guarantees
12. General Government
$19.6 billion in discretionary spending. (2 chips will maintain current level.)
Costs for administering the Internal Revenue Service (IRS)
Costs for Congress and the Executive Office of the President
13. Agriculture
$6.1 billion in discretionary spending. (1 chip will maintain current level.)
Agricultural research and education programs
Animal and plant inspection programs
14. Energy
$5.0 billion in discretionary spending. (1 chip will maintain current level.)
Funding for alternative fuel research and development
Nuclear waste disposal of commercial (non-Defense) spent nuclear fuels
Strategic Petroleum Reserve, which provides emergency oil supply in the event of a
severe disruption of supply
Funding for energy efficiency and renewable energy
Fossil energy programs (ex., R&D for coal uses)
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Please note that the numbers used in this document are for the purposes of this simulation only.
13
President Trump’s Proposed 2018 Budget
Each chip equals approximately 10 billion dollars.
Function
2018 estimated
total spending
(in billions of
dollars)
2018 estimated
discretionary
spending (in
billions of
dollars)
Number of
chips in the
2018
budget
Number of
chips in the
2019
budget
1. National Defense
717.6
708
71
Non-Defense Spending Categories:
2. Transportation
91.8
90.3
9
3. Education, Training, Employment &
Social Services
96.5
88.8
9
4. Veterans Benefits and Services
177.9
77.9
8
5. Income Security
495.9
66.2
7
6. International Affairs*
67.5
65.3
7
7. Health
532.1
57.0
6
8. Administration of Justice
65.0
50.9
5
9. Natural Resources and Environment
37.5
33.6
3
10. General Science, Space &
Technology
30.6
30.5
3
11. Community & Regional
Development
23.1
22.1
2
12. General Government
27.2
19.6
2
13. Agriculture
26.6
6.1
1
14. Energy (Total spending is less than the discretionary
spending because the total number includes revenues.)
2.7
5.0
1
Total Non-Defense Chip
1674.4
613.3
63
Supplemental Disaster Relief
(Community and Regional Development)
--
6
(estimated)
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
14
Setting National Priorities: A Federal Budget Simulation
Functional Areas with Budget Details
See also: https://www.cfda.gov/downloads/CFDA_2009.pdf, Appendix III
The text in italics is the information that students have been given in their programs.
1. National Defense
$708 ($643+$65) billion in discretionary spending. (71 chips will maintain current
level.)
Please note that for FY 2018, President Trump’s budget proposal included $643 billion
in outlays for National Defense, but that figure did not include the $65 billion in
supplemental spending that he requested to fund overseas military operations (Overseas
Contingency Operations). For our purposes, we have included those funds in the
National Defense discretionary category.
The raising, equipping, and maintaining of armed forces
Development and utilization of weapons systems (including nuclear weapons), and
related programs
Operations and maintenance of military facilities
Direct compensation and benefits paid to active military and civilian personnel
Health insurance and life insurance for military personnel
Military construction, family housing
Research, development, testing, and evaluation of new technology and weaponry
This functional area includes all programs related to the common defense and security of the
United States. Some points to consider:
Many people believe that national security is a government’s first priority.
Military spending creates jobs. The Department of Defense is one of the
nation’s largest employers, with over 1.3 million personnel on active duty,
742,000 civilians, and 826,000 men and women in the Selected Reserve of
National Guard and Reserve forces
6
(Wal-Mart employs about 1.5 million
workers in the US.)
7
The U.S. spends about as much on its military as the next top 7 nations
combined (2014 data). The U.S. accounts for 34% of total global military
spending.
8
The FY 2018 budget request for intelligence agencies consisting of the CIA
and other agencies reporting to the Director of National Intelligence was $57.7
billion. An additional $20.7 billion was requested for military intelligence.
9
As of August 2017 there were roughly 11,000 U.S. troops in Afghanistan.
10
The Defense Department manages an inventory of installations and facilities
to keep Americans safe. The Department’s physical plant is huge by any
6
https://www.defense.gov/About/
7
http://corporate.walmart.com/newsroom/company-facts
8
http://www.politifact.com/truth-o-meter/statements/2016/jan/13/barack-obama/obama-us-spends-more-military-
next-8-nations-combi/
9
http://www.fas.org/irp/budget/index.html
10
http://www.brookings.edu/about/programs/foreign-policy/afghanistan-index
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Please note that the numbers used in this document are for the purposes of this simulation only.
15
standard, consisting of more than several hundred thousand individual
buildings and structures located at more than 5,000 different locations or sites.
When all sites are added together, the Department of Defense utilizes over 30
million acres of land.
11
2. Transportation
$90.3 billion in discretionary spending. (9 chips will maintain current level.)
Highways
Mass transit and railroads
Air and water transportation (including air traffic control)
This functional area includes all programs that provide for the transportation of the general
public. Some points to consider:
Transportation, including the ownership and operation of vehicles and
expenses for public transit, is one of the largest expense categories for most
American households.
These were President Trump’s 2018 discretionary allocations for ground
transportation:
Highways: $44 billion
Mass Transit: $12.7 billion
Railroads: $1.5 billion
He allocated $21.6 billion in discretionary spending for air transportation
(FAA, security, air traffic controllers) and $9.0 billion for water
transportation.
12
Federal spending for water transportation includes some of
the costs associated with maintaining harbors and navigation channels and
equipment used to support sea-borne traffic (such as Coast Guard vessels).
13
We need to continue funding highway, bridge, transit and safety programs in
order to maintain our economy. When a bridge starts crumbling and cars and
trucks have to be diverted, that costs our economy in time, gas and money.
Efficient transportation of goods (such as the transportation that gets food into
our grocery stores) represents an important aspect of a strong economy.
3. Education, Training, Employment, Social Services
$88.8 billion in discretionary spending. (9 chips will maintain current level.)
Elementary, Secondary & Vocational education (including funding for public schools
in low-income neighborhoods and for special education)
Loans, scholarships and stipends for students to participate in education
Retraining adults for new vocations and employment counseling
Children and families services programs (including programs that help individuals
with physical or mental disabilities to obtain employment and live more
independently)
11
http://www.defense.gov/About-DoD
12
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
13
https://www.cbo.gov/sites/default/files/114th-congress-2015-2016/reports/49910-infrastructure.pdf
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Please note that the numbers used in this document are for the purposes of this simulation only.
16
This functional area includes funding for the entire Department of Education, social services
programs within the Department of Health and Human Services, and employment and training
programs within the Department of Labor. Some points to consider:
Primary, secondary and higher education. Approximately 70% of the FY
2018 money budgeted for discretionary spending in this category was
allocated to K-12 and higher education programs (approximately $62.6
billion).
Education is mostly funded by state and local governments (Massachusetts
spends approximately 18% of its state budget on education --$7.1 billion of its
$40.2 billion total budget)
14
, however, the federal government spends money
on education for the disadvantaged (approx. $16.0 billion) and special
education (approx. $12.8 billion).
15
President Trump proposed spending $22.4
billion of discretionary spending for Pell grants. ($7.1 billion for Pell grants
are in the mandatory spending category.)
16
Pell provides approx. 7 million low
and moderate income students with aid for college.
17
President Trump requested $6.2 billion in discretionary funding for training
and employment services.
18
President Trump requested $13.4 billion in social services including
rehabilitation services, children and family service programs and aging
services programs.
19
Some conservatives believe that funding and control of education should be
left to the states and would like to eliminate the U.S. Department of Education
4. Veterans Benefits and Services
$77.9 billion in discretionary spending. (8 chips will maintain current level.)
Medical facilities, medical research, and medical care of veterans
Departmental administration
This functional area consists of programs providing benefits and services, the eligibility for
which is related to prior military service but the financing of which is not an integral part of the
costs of national defense. Some points to consider:
As of 2016, there were approximately 18.5 million veterans in the U.S. – 50%
(9.2 million) were over the age of 65.
20
For Trump’s proposed FY 2018
budget, 89% of funding in this category ($69.5 billion) was allocated towards
14
http://www.mass.gov/bb/gaa/fy2018/
15
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
16
https://www2.ed.gov/about/overview/budget/budget18/summary/18summary.pdf (page 26)
17
https://trends.collegeboard.org/student-aid/figures-tables/pell-grants-total-expenditures-maximum-and-average-
grant-and-number-recipients-over-time
18
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
19
Ibid.
20
https://www.census.gov/newsroom/facts-for-features/2017/veterans-day.html
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Please note that the numbers used in this document are for the purposes of this simulation only.
17
medical care of veterans.
21
As more choose to use VA as their primary care
provider, the strain on the system continues to grow.
President Trump allocated $7.6 billion for Departmental administration.
22
5. Income Security
$66.2 billion in discretionary spending. (7 chips will maintain current level.)
Housing assistance for people with low and moderate income
Special supplemental food program for women, infants and children (WIC)
Low income home energy assistance
This functional area consists of a range of income security programs that provide cash or near-
cash assistance (e.g., housing, food, and energy assistance) to low-income persons, and benefits
to certain retirees, persons with disabilities, and the unemployed. Housing assistance programs
account for 68% of discretionary spending ($44.8 billion) in this function.
23
Some points to
consider:
For FY 2018, President Trump requested $44.8 billion for low and moderate-
income housing aids.
“[A]bout one out of four families that qualifies for some kind of housing
assistance get it. In cities like Washington, D.C., the waiting list is not counted
in years but in decades.”
24
President Trump requested $6.0 billion for special supplemental food
programs for women, infants, and children (WIC).
25
He requested $1.1 billion for low income home energy assistance.
26
He requested $2.8 billion for child care and development block grants.
27
Subsidized housing for low income Americans is particularly important in
urban areas such as Boston where rents are too high for lower income people
to afford.
6. International Affairs
$65.3 ($53.3 + 12) billion in discretionary spending. (7 chips will maintain current
level.)
Please note that for FY 2018, President Trump’s budget proposal included $53.3 billion
in discretionary outlays for International Affairs, but that figure did not include the $12
billion in supplemental spending that he requested to fund Overseas Contingency
Operations (OCO). These OCO funds would contribute to Diplomatic and Consular
programs, international disaster assistance for famine prevention and relief, and
migration and refugee assistance. For our purposes, we have included those funds in the
discretionary category.
Foreign diplomacy (embassies and ambassadors)
21
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
22
Ibid.
23
Ibid.
24
https://www.theatlantic.com/business/archive/2016/03/eviction-matthew-desmond-housing/471375/
25
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
26
Ibid.
27
Ibid.
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Please note that the numbers used in this document are for the purposes of this simulation only.
18
Contributions to International Organizations & Peacekeeping (including support for
the UN)
Economic and military aid to countries that are friendly to us
Humanitarian aid to countries that need assistance
Promotion of democracy and protection of human rights throughout the world
This functional area contains funding for all U.S. international activities, including: operating
U.S. embassies and consulates throughout the world; providing military assistance to allies;
aiding developing nations; dispensing economic assistance to fledgling democracies; promoting
U.S. exports abroad; making U.S. payments to international organizations; and contributing to
international peacekeeping efforts. Some points to consider:
President Trump’s FY 2018 budget allocated $8.9 billion for State
Department operations and another $2.1 billion for embassy security,
construction and maintenance.
28
Trump’s FY 2018 budget allocated $24.4 billion for international
development and humanitarian assistance (including global health, refugee
programs, international disaster assistance, etc.) and $15.0 billion for
international security assistance (including foreign military grants, economic
support and antiterrorism programs).
29
These numbers do not include OCO
spending (see above).
The U.S. provides more aid to the Middle East than any other region of the
world. For FY 2018, President Trump requested approximately $3.1 billion
for Israel, $1.4 to Egypt, $1 billion to Jordan, $783 million to Afghanistan,
$348 million to Iraq and $345 million to Pakistan,.
30
Our current level of
financial support for Israel and Egypt grew out of the 1979 Camp David Peace
Treaty.
Less than 1% of the federal budget is spent on foreign aid, but most
Americans significantly (and consistently) overestimate how much of the U.S.
budget is spent on foreign aid. Though the U.S. is one of the largest donors in
international economic aid donor in dollar terms, when calculated as a percent
of gross national income, it provides one of the smallest contributions among
the major donor governments.
31
President Trump’s Foreign Affairs Overseas Contingency Operations
spending request “totals $12.0 billion, 42% below the FY2017 enacted level.
It seeks $3.0 billion for Diplomatic and Consular Programs that includes $2.4
billion for Worldwide Security Upgrades; $1.3 billion for International
Disaster Assistance for famine prevention, relief, and prevention; $2.7 billion
for the Economic Support Fund; and $2.0 billion for Migration and Refugee
Assistance, among funds for other things.”
32
28
Ibid.
29
Ibid.
30
https://fas.org/sgp/crs/mideast/IN10716.pdf and https://www.foreignassistance.gov/explore
31
http://www.fas.org/sgp/crs/row/R40213.pdf (page 20)
32
https://fas.org/sgp/crs/row/IF10143.pdf
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Please note that the numbers used in this document are for the purposes of this simulation only.
19
7. Health
$57.0 billion in discretionary spending. (6 chips will maintain current level.)
Research into the causes and cures of diseases
Substance abuse and mental health services
Financing specialized programs for training health workers and researchers
Promotion of consumer and occupational health safety (which includes food safety
and inspection against harmful bacteria and bioterrorism)
Health care to low income, uninsured, vulnerable people who need government
support when they become ill
Funding for the Food and Drug Administration which assures the safety,
effectiveness, and security of medications and medical devices
Health covers the physical and mental health of the nation’s population, including the prevention
of illness and accidents. Funding for the National Institutes of Health (NIH) represents
about 53% ($30.0 billion) of discretionary funding for health.
33
Medicare, Medicaid, and
CHIP (Children’s Health Insurance Program) are all mandatory programs, and, therefore, not
part of today’s budgeting. Discretionary programs in this category include most direct health care
services programs. Some points to consider:
The goal of the National Institute of Health (NIH) is to acquire new
knowledge to help prevent, detect, diagnose, and treat disease and disability,
from the rarest genetic disorder to the common cold.
President Trump’s FY 2018 request for NIH general cancer research was
approximately $4.5 billion.
34
President Trump’s FY 2018 request for NIH research activities into domestic
HIV/AIDS was approximately $2.2 billion.
35
Funding for Substance Abuse and Mental Health services was estimated at
approximately $3.7 billion.
36
The Health Resources and Services Administration is charged with increasing
access to health care for those who are medically underserved. HRSA’s
programmatic portfolio includes a range of programs or initiatives designed to
increase access to care, improve quality, and safeguard the health and well-
being of the nation’s most vulnerable populations. The president requested
$5.4 billion for their FY 2018 budget.
37
President Trump requested approximately $2.1 billion in funding for the Food
and Drug Administration (FDA) for FY 2018.
38
The Centers for Disease
Control and Prevention notes that each year 1 in 6 Americans get sick from
tainted foods or beverages.
39
33
Ibid.
34
https://www.hhs.gov/about/budget/fy2018/budget-in-brief/nih/index.html#budget
35
http://kff.org/global-health-policy/fact-sheet/u-s-federal-funding-for-hivaids-trends-over-time/
36
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
37
Ibid.
38
Ibid.
39
https://www.cdc.gov/foodsafety/foodborne-germs.html
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
20
President Trump requested $5.6 billion in funding for the Centers for Disease
Control and Prevention.
40
(Note: this is separate from NIH funding.)
President Trump’s FY 2018 request for the Consumer Product Safety
Commission’s was approximately $124 million (not billion).
41
8. Administration of Justice
$50.9 billion in discretionary spending. (5 chips will maintain current level.)
Federal law enforcement and judicial activities
Federal correctional activities (incarceration of people convicted of federal crimes)
Grants to state and local governments to assist them in operating and improving their
law enforcement and justice systems.
This functional area includes those programs designed to provide judicial services, police
protection, law enforcement (including civil rights), rehabilitation, and incarceration of
criminals, and promotion of the general maintenance of domestic order. This area includes The
FBI, Immigration and Naturalization Services (now part of the Department of Homeland
Security), Drug Enforcement Agency (DEA), Bureau of Prisons (BOP), U.S. Attorneys, and the
U.S. Marshals Service (USMS). Some points to consider:
President Trump requested $6.5 billion to fund criminal investigations by
agencies such as the FBI, DEA (Drug Enforcement Agency), and DHS
(Department of Homeland Security).
42
President Trump requested $13.0 billion for federal litigative and judicial
activities—including prosecution and representation of alleged criminals.
43
At present, there are approximately 184,000 total federal inmates in prison,
most of whom were convicted for drug-related offenses, weapons or arson
charges, or for illegal immigration.
44
For FY 2018, $7.2 billion was requested
to fund the federal prison system—including federal detention and
incarceration. These DOJ components ensure that Federal criminals and those
awaiting trial or sentencing are safely and cost-effectively incarcerated and
detained.
45
Other requests for FY 2018: $24.1 billion for border and transportation
security related to preventing illegal immigration and $1.9 billion for the
Secret Service.
46
“Based on previous analysis from the Center for American Progress, a mass
deportation strategy [for undocumented immigrants] would cost an average of
$10, 070 per person, for a total of $114 billion to remove 11.3 million
people”
47
40
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
41
Ibid.
42
Ibid.
43
Ibid.
44
https://www.bop.gov/about/statistics/population_statistics.jsp
45
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
46
Ibid.
47
http://www.newsweek.com/how-much-would-it-cost-deport-all-undocumented-immigrants-364316
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
21
9. Natural Resources and the Environment
$33.6 billion in discretionary spending. (3 chips will maintain current level.)
Promotion of conservation
Controlling and reducing air, water, and land pollution
Development and maintenance of recreational resources such as national parks
Work to clean up previously polluted sites, restore them to uses appropriate for
surrounding communities, and respond to and prevent waste-related or industrial
accident
This functional area includes programs concerned with environmental protection and
enhancement; recreation and wildlife areas; and the development and management of the nation's
land, water, and mineral resources. Some points to consider:
President Trump requested $2.8 billion allocated to support recreational
resources such as national parks, refuges, and public lands.
48
He requested $9.6 billion for conservation and land management.
49
He requested $6.5 billion for pollution control and abatement.
50
$6.6 billion was requested to fund the Army Corps of Engineers—part of
their mission is the planning, designing, building and operating of water
resources and other civil works projects (Navigation, Flood Control,
Environmental Protection, Disaster Response, etc.)
51
10. General Science, Space, and Technology
$30.5 billion in discretionary spending. (3 chips will maintain current level.)
America’s space program
Grants for cutting-edge discoveries in science and engineering
The general scientific research under the National Science Foundation (NSF), NASA, and the
Department of Energy is covered in this area. Some points to consider:
President Trump requested $6.7 billion for The National Science Foundation
programs,
52
an independent federal agency created by Congress "to promote the
progress of science; to advance the national health, prosperity, and welfare; to
secure the national defense…" This is the funding source for approximately 24%
of all federally supported basic research conducted by America's colleges and
universities. In many fields such as mathematics, computer science and the social
sciences, NSF is the major source of federal backing.
53
He requested $18.8 billion for space flight, research, and supporting activities
(NASA).
54
48
ps://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
49
Ibid.
50
Ibid.
51
Ibid.
52
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
53
http://www.nsf.gov/about/
54
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
22
He requested $5.0 billion for Department of Energy science programs.
55
These
research programs “advance the science needed for revolutionary energy
breakthroughs, seek to unravel nature’s deepest mysteries, and provide the
Nation’s researchers with the most advanced large-scale tools of modern
science.”
56
The more we know about the environment, agriculture, weather, geological
phenomena, the oceans and alternative sources of energy, the more we can do to
actually save lives and make our quality of life better. There might be a discovery
just around the corner that can save us billions of dollars, and save us from
earthquakes, famine, etc.
11. Community and Regional Development
$22.1 billion in discretionary spending. (2 chips will maintain current level.)
Urban community and economic development programs, such as those providing
money for the revitalization of public housing, or money to build affordable housing
Disaster relief and insurance
Grants and loans for water supply and sewer systems
Regional economic development programs
Aids to businesses such as loans and loan guarantees
Federal support for community and regional development helps economically distressed urban
and rural communities. This functional area consists of broad-based community, regional, urban
and rural renewal and development programs. The purpose of this development is to create
physical facilities or financial infrastructures that promote workable community economies.
Some points to consider:
President Trump requested $7.8 billion for community development.
57
He requested $3.0 billion for area and regional development.
58
He requested $11.4 billion for disaster relief and insurance including funding for
FEMA (Federal Emergency Management Agency).
59
Please note that recent natural disasters (hurricanes, wildfires, etc.) have required
significant additional emergency spending for this fiscal year and beyond.
Should the government be putting aside additional funds to deal with potential
future disasters?
12. General Government
$19.6 billion in discretionary spending. (2 chips will maintain current level.)
Costs for administering the Internal Revenue Service (IRS)
Costs for Congress and the Executive Office of the President
55
Ibid.
56
http://science.energy.gov/programs/
57
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
58
Ibid.
59
Ibid.
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
23
Not only does this category cover the general overhead costs (and salaries) of the Federal
Government, including legislative and executive activities, but it also covers the IRS. Some
points to consider:
This may seem like an easy place to take money, but money for this function
supports the cost of running our federal agencies, and running the IRS. We need
tax revenues from the IRS to pay for our government programs. President Trump
allocated $11.6 billion for the IRS.
60
The IRS estimates that, for every $1 invested
in the IRS budget, it produces $4 in revenue.
61
Since 2010 the IRS budget has been cut by 17% and its staff reduced by 23%. The
passage of recent tax reform will require increased activity by the IRS.
62
President Trump proposed spending $4.3 billion on legislative branch
discretionary programs which support the operations of the U.S. Congress.
63
The president gets $400,000 in salary plus an expense account of $50,000.
President Trump has been donating his salary to different government entities.
The vice president's annual salary is $230,700. Representatives and senators earn
approximately $174,000.
64
13. Agriculture
$6.1 billion in discretionary spending. (1 chip will maintain current level.)
Agricultural research and education programs
Animal and plant inspection programs
This functional area includes farm income stabilization, agricultural research, and other services
administered by the U.S. Department of Agriculture (USDA). The mandatory programs include
crop insurance, and certain farm loans. Some points to consider:
The USDA ensures the safety and abundance of our food supply with agricultural
and grain inspections, animal health monitoring, and pest detection.
President Trump requested $2.0 billion for agricultural research and education
programs.
65
President Trump requested $1.0 billion for animal and plant inspection
programs.
66
60
Ibid.
61
https://www.irs.gov/newsroom/prepared-remarks-of-commissioner-of-internal-revenue-service-john-koskinen-
before-the-national-press-club or https://www.nytimes.com/2017/03/27/opinion/why-steven-mnuchin-wants-a-
stronger-irs.html
62
https://www.nytimes.com/2017/12/18/business/irs-tax-bill.html?_r=0
63
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
64
http://library.clerk.house.gov/reference-files/114_20160510_Salary.pdf
65
https://www.whitehouse.gov/sites/whitehouse.gov/files/omb/budget/fy2018/25_1.pdf
66
Ibid.
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
24
14. Energy
$5.0 billion in discretionary spending. (1 chips will maintain current level.)
Funding for alternative fuel research and development
Nuclear waste disposal of commercial (non-Defense) spent nuclear fuels
Strategic Petroleum Reserve, which provides emergency oil supply in the event of a
severe disruption of supply
Funding for energy efficiency and renewable energy
Fossil energy programs (ex., R&D for coal uses)
Most programs in this category are within the Department of Energy, comprising civilian energy-
related programs including research and development and environmental clean-up. This category
does not include national security activities. Some points to consider:
Funding for programs in this discretionary area include $1.8 billion for energy
efficiency and renewable energy, $834 million for nuclear energy R &D, $599
million for towards programs related to fossil energy and $757
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
25
FY 2018 Proposed National Defense Spending Allocations
Major itemized allocations:
Total operations and maintenance: $ 252 billion
Total personnel (Army, Navy, Air Force, Marines, National Guard): 145 billion
Total federal procurement of aircrafts, ships, weapons, ammo, some examples: 113 billion
F-35 Joint Strike Fighter, 70 aircraft; $10.3 billion
KC-46 Tanker, 15 aircraft; $3.1 billion
B-21 Bomber, $2.0 billion
Virginia Class Submarine, 2 ships; $5.5 billion
DDG-51 Destroyers, 2 ships, $4.0 billion
CVN-78 Class Aircraft Carrier, 1 ship, $4.6 billion
Total R&D, test and evaluation of weapons: 76 billion
Operations in Afghanistan, Iraq, Syria and Counterterrorism*: 65 billion
Nuclear defense activities: 22 billion
Military construction 8 billion
FBI – defense related activities: 5 billion
*President Trump requested approximately $65 billion for overseas operations in Afghanistan, Iraq and
Syria and other global counterterrorism operations--including operations against the Islamic State (IS).
Approximately 11,000 U.S. troops currently remain in Afghanistan. (Historically, it has cost
approximately $10 billion annually for every 10,000 troops deployed in Afghanistan or Iraq.)
---------------------------------------------------------------------------------------------------------------------
FY 2018 Proposed National Defense Spending Allocations
Major itemized allocations:
Total operations and maintenance: $ 252 billion
Total personnel (Army, Navy, Air Force, Marines, National Guard): 145 billion
Total federal procurement of aircrafts, ships, weapons, ammo, some examples: 113 billion
F-35 Joint Strike Fighter, 70 aircraft; $10.3 billion
KC-46 Tanker, 15 aircraft; $3.1 billion
B-21 Bomber, $2.0 billion
Virginia Class Submarine, 2 ships; $5.5 billion
DDG-51 Destroyers, 2 ships, $4.0 billion
CVN-78 Class Aircraft Carrier, 1 ship, $4.6 billion
Total R&D, test and evaluation of weapons: 76 billion
Operations in Afghanistan, Iraq, Syria and Counterterrorism*: 65 billion
Nuclear defense activities: 22 billion
Military construction 8 billion
FBI – defense related activities: 5 billion
*President Trump requested approximately $65 billion for overseas operations in Afghanistan, Iraq and
Syria and other global counterterrorism operations--including operations against the Islamic State (IS).
Approximately 11,000 U.S. troops currently remain in Afghanistan. (Historically, it has cost
approximately $10 billion annually for every 10,000 troops deployed in Afghanistan or Iraq.)
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
26
Special Interest Group Requests
1. The first group that has asked for our attention is an American Road and
Transportation Association. This is their statement:
The Federal Highway Administration (FHWA) found in 2013 that 16.1% of major
highways eligible for federal aid were in poor or mediocre condition and needed repaving
or even more substantive repairs.
The American Society of Civil Engineers (ASCE) notes that more than two out of every
five miles of America’s urban interstates are congested, and traffic delays cost the
country $160 billion in wasted time and fuel in 2014.
An ASCE report notes that 9.1% of American bridges are structurally deficient (as of
2016) -- requiring significant maintenance or repair to remain in service.
Our economy requires a safe and efficient transportation system. Businesses and
industries use transportation to acquire the materials and labor they need, and to get their
products and services to customers. Households depend on transportation for access to
work, shopping, medical care, and family.
The US has been underfunding maintenance of highways for many years.
They are asking for an increase of approximately 10 billion dollars in the functional area of
Transportation. This would be one chip that we would add by taking one from another
program.
2. The second group that has asked for our attention is called Concerned Environmental
Scientists of America. This is their statement:
The major US scientific agencies agree that a rise in the Earth’s temperature is mainly
due to the effects of greenhouse gases--such as carbon dioxide--which are produced
naturally, and also by humans in the burning of oil, gas, coal and wood products. It is
important for us to reduce the amount of greenhouse gas pollution we release and
lower the risk of continued global warming and its severe consequences.
One way of reducing greenhouse gas pollution is for countries to find ways to make
energy derived from oil, gas and coal (also called fossil energy) less harmful to
people and the environment. Another way is to switch from fossil energy technology
to alternative energy such as solar or wind power. Another is to find new ways to
increase the efficiency of appliances, homes, businesses and vehicles. Research and
development of these energy alternatives, efficiencies, and renewable energy takes
money.
Funds are also needed to make sure that regulations that have currently been put in
place to minimize greenhouse gases are enforced.
They believe this is the most significant issue of our generation, and are asking for an
increase in funding of approximately 10 billion dollars in the functional area of Energy.
This would be one chip that we would add by taking one from another program.
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
27
3. The third group that has requested additional funding is the Bipartisan Foreign Policy
Association. This is their statement:
Failed states pose a major threat to the US, providing terrorist groups like Al Qaeda
and ISIS with a refuge and base for their operations. Both Democratic and Republican
administrations have used the three D’s—defense, diplomacy and development— to
address the problem, but development programs are often the most effective. Robust
foreign aid programs are, therefore, essential for national security.
Problems in distant parts of the world—such as disease, drought or destruction of rain
forests—can have a serious impact on the health and well-being of Americans. We
have to support international organizations that are addressing these issues to assure
our own country’s future.
Earthquakes, tsunamis, floods and other natural disasters have increased in recent
years, destroying the lives and livelihoods of millions worldwide. The US must
continue to contribute its fair share to relief efforts.
We need to think of foreign aid as an investment, not as charity. Helping other
nations to grow their economies helps us to grow our own.
They are asking for an increase of approximately 10 billion dollars in the functional area of
International Affairs. This would be one chip that we would add by taking one from
another program.
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
28
Group #____
Function
# chips
to start
final # of chips
1. National Defense
71
Non-Defense Spending Categories:
2. Transportation
9
3. Education, Training, Employment & Social
Services
9
4. Veterans Benefits and Services
8
5. Income Security
7
6. International Affairs
7
7. Health
6
8. Administration of Justice
5
9. Natural Resources and Environment
3
10. General Science, Space & Technology
3
11. Community & Regional Development
2
12. General Government
2
13. Agriculture
1
14. Energy
1
Total Non-Defense Chips
63
Prepared by the Department of Education and Public Programs, John F. Kennedy Presidential Library and Museum.
Please note that the numbers used in this document are for the purposes of this simulation only.
29
Income
Security
7
General Science,
Space &
Technology
3
Veterans’
Benefits &
Services
8
Natural Resources
& Environment
3
Energy
1
Education,
Training,
Employment &
Social Service
9
9
Administration
of Justice
5
Agriculture
1
Transportation
9
Health
6
General
Government
2
National
Defense
71
International
Affairs
7
Community &
Regional
Development
2