One of the most important activities engaged in by the president and Congress every year is the creation of a federal budget, establishing how the government will raise revenues and how those revenues will be spent. In terms of federal revenues, over four-fifths of total revenues comes from an individual’s paycheck (federal income taxes and social insurance taxes like Social Security and Medicare). In terms of federal spending/outlays, almost three-quarters of the budget is devoted to three major expenditure areas: health care costs (Medicare, Medicaid, etc.), Social Security and national defense. Since the early 2000s, the federal government has been spending far more money than it has raised through revenues, creating huge annual deficits and adding to an already large national debt.
How would you try to balance the federal budget (expenditures/outlays not exceeding revenues)? What areas of federal spending would you cut and why? In what areas would you try to increase federal revenues? Why would you choose those additional revenue sources?