Federal Budget Challenge - Assignment Example

My total budget deficit for 2015 is $309.3B. This excessive reduction was brought about by huge cuts in defense (by $101B), intelligence (by $40B), and military operation (by $20B spendings, while increasing tax rates on higher levels of income brackets. I increased medical research spending by $4B and the expenditure on NASA projects by $9. Individuals with salaries over $1m have their tax rates increased from 18.4% to 20.2% (this effectively reducing the deficit by $40.5B). Other individuals with annual earnings above $100,000 are charged the 5% new rate (this effectively reduces the deficit by another $46.7B). I decided to increase the corporate tax to 15.4% ($16.5B reductions) and also charge a ‘financial crisis’ fee (Colander 320) to large banks ($9B reductions), however, I did not tax ‘carried interests’.

Tax on fuel and Sugar products reduced the deficit by $66B, but an unchanged inheritance tax regulation increases by deficit by a further $9B. These reductions give me a projected budget deficit of $309.3B for 2015. The percentage of long-term Social Security deficit solved is 37.5%, this is as a consequence of raising the limit on wages subject to the payroll tax to at least $156,000 and choosing to increase the retirement age to at least 68. This would be quite tolerable for the federal government.

A majority of my policy proposal includes moderate cuts in spending across all the sectors. The choices I made were based on reasonable and modest cuts that would allow for timely adjustments by the federal government. They were popular.  A social security cut of $460B would provide additional revenue to the Social Security program, which, according to the Congressional Budget Office’s estimates, will not have enough income to fund the benefits that are due to beneficiaries under current law.

Moreover, healthcare cuts (around $276B inclusive of Medicare) by providing a fixed voucher for beneficiaries to purchase private health insurance.  Essentially this gives beneficiaries an incentive to choose the health cover that minimizes wasteful spending. Reduction in security and defense by $48B is justifiable. The huge investment in the intelligence agencies can fairly compensate for this cut.