The Budget Process and the National Debt

In the fall of 1998, Congress reported a $70 billion budget surplus. What miracle happened that wasn't apparent when the students were invited to tackle the budget deficit in their essays last fall?

As Jana correctly stated below:
"Our economy would benefit greatly if we didn't have to support as many unemployed and if more money was being earned. More jobs mean more money and more income in the hands of consumers."
Jana Williams, Concordia High School, Concordia, Kansas

What Jana described above happened. More jobs, expanding economy, a bull stock market resulted in more revenue. At the same time the need for fewer subsidies and lower interest on our national debt resulted in lower spending.

Was the Singer Foundation late in bringing the issue of the National Debt to the attention of students? Was the budget process still an issue deserving of research and the effort required to gain some understanding of the problem?

The excerpts below assured us this exercise was not undertaken in vain:
"The National Debt is a major problem for the U.S. and many people do not realize the importance of this subject. It threatens the very stability and freedom people have come to believe is their birthright."
Stacie Nelson, Concordia High School, Concordia, Kansas

"When asked the question, 'What is the National Debt and the Budget Process,' I thought to myself, 'Who cares? What's that got to do with me?' I feel like most of us teenagers think that these problems are only things that the President tells the public…so the public thinks he is doing something besides drinking coffee in the White House. Well, through researching for this report, I found that it is a lot more than that."
Garrett M. Benson, Paoli High School, Paoli, Oklahoma

"Many persons do not know what the National Debt is. Some do not know that it is a rising problem in American society today. The experts that are informed about the National Debt need to tell others about it."
Stephen Smith, Concordia High School, Concordia, Kansas

"The National Debt is a complicated thing to understand and something I knew nothing about. Before doing research on the subject, I thought that it was just a whole lot of money that the government borrowed and thus owed itself. The only thing that I did know is that the United States Government has compiled such a huge debt that it will probably never be paid off. There are many things that are involved with what makes up the National Debt, how the government deals with it, and how people perceive it."
Justin Istas, Concordia High School, Concordia, Kansas

"The Budget Process and the National Debt are complicated issues…The budget process needs to be clarified for all of the American people."
Shannon Small, Iowa-Grant High School, Livingston, Wisconsin

"The National Debt is not an easy thing to control, and definitely not an easy thing to understand. Many people wonder where all this money comes from, but even more wonder where it goes."
Garrett Miller, Concordia High School, Concordia, Kansas

Jacqualyn and the other students whose work is represented below, made us proud of the learning that took place:
"The government essentially has three choices: it can spend less, it can tax more, or it can do both. While neither option is entirely appealing to constituencies, some course must be taken to reduce the deficit. If that course is taxation, there remains the decision of where to apply the tax. And even far more difficult, if spending is to decrease then funding for the government's social programs must decrease, raising the question of which programs to cut. The enormous public debt [future liabilities], which the United States currently owes, and the continually increasing yearly deficit which causes it, are burdens which have been repeatedly shifted from each generation onto the next. In the past, this was not a matter of great concern, but as we become evermore aware of the reality and the almost incomprehensible size of our national debt, and realize its potential to snowball into an unavoidable disaster for our economy, we are forced to realize that something must be done about the situation before it becomes impossible to do anything."
Jacqualyn Bezner, Hereford High School, Hereford. Texas

"Today there are about as many theories about ways to control the national debt, as there are hairs on a dog's head. Almost everyone, from an average person to the most powerful Congressman, has a hypothesis relating to the national debt. What we need is to hear all these ideas and make a compromise."
Shannon Small, Iowa-Grant High School, Livingston, Wisconsin

"After reading various editorials and opinions, the average citizen hardly knows what to believe about the national debt. Some folks contend we don't have a debt, some think it is good to have some debt, and others predict impending doom unless the budget is balanced and the debt paid off soon."
Larry Florea, Concordia High School, Concordia, Kansas

"As a teenager getting ready to graduate high school, the United States budget process and National Debt seems more important than ever. Through…research, the problems of the national debt and budget seem to be more and more clear.…The cause of the National Debt is easy to explain."
Jared Reed, Concordia High School, Concordia, Kansas

Jared, above, may have exaggerated a bit. Joshua and Eddie, below, use analogy to clarify the issue. Eddie concludes that though the cause may be easy to explain the answer to the problem is not easy:

"An ordinary consumer approaches a supermarket checkout counter pushing a shopping cart. The shopper slowly unloads such things as National Defense, Social Security, Medicare, and funding for Education onto the counter. Like most shoppers, this one purchases these items with a credit card. This shopper is the Government of the United States of America, and its credit card contains many unpaid debits. The only problem is the government cannot pay the yearly bill. The debt to the creditors increases as they add on more and more interest and the government continues to use the credit card."
Joshua Collette, Concordia High School, Concordia, Kansas

"Uncle Sam is driving cross-country. As he drives, however, he realizes that he is quickly running out of gas. Considering the problem, he decides that by driving more slowly his remaining gas will last a longer period of time. What he fails to realize is that although it will, indeed, take him longer to use up the gas, this course of action will not allow him to arrive any nearer to his goal than if he had proceeded at his original speed. In the same way that Uncle Sam's perceived solution to his dilemma fails to address his real problem, many times the efforts by the United States to solve its problems with the enormous public debt and yearly deficits fails to address the root of the conflict.… First, we must examine the courses of action taken in the past and proposed for the present. Next, we will consider the various options available towards controlling our public debt, taking into account the extremely divisive issue of entitlements. Lastly, we will consider the responsibility of American citizens in this whole process… Among the methods proposed for strengthening budget controls are the line-item veto, enhanced rescission authority, biennial budgeting and appropriations, and entitlement caps. All of these, with the exception of entitlement caps, emphasize control over discretionary spending. Ironically, it is this area of the budget that is already the most controlled.
    Just as Uncle Sam avoided his problem, these methods attempt to solve our national dilemma by taking a relatively ineffective approach. According to information provided by the Congressional Budget Office, entitlements and interest payments are projected to consume all federal tax revenues by 2015, leaving the Federal government with no money for education, children's programs, highways, national defense, or anything else. This is where attention has to be focused if the budget is ever to be brought under control.
    Proposed solutions to this dilemma include: tax rate increases, eliminating some entitlement programs, reducing benefit levels in some or all entitlement programs, denying wealthier citizens Social Security and Medicare benefits, reducing health care benefits under Medicare, or fully taxing entitlement benefits as if they were ordinary income. None of these is politically popular. Tied to the CPI through Cost-of-Living-Adjustments, many of these programs like Social Security, federal pensions, and persons currently on Medicare, represent prior governmental commitment, and cannot be altered. But other entitlement programs, including the various welfare programs and Medicaid, and the future operation of Social Security and other CPI-based entitlements, must be changed. Whether they will be changed in substance or by means of entitlement caps or some other methods [has not been] determined, but that something must be done is certain.
    As American citizens, it is our responsibility to work towards reducing deficits and thereby, the burden we have imposed on future generations. But care must be taken that this is done with care and consideration for the less advantaged who may be victimized by such efforts. Perhaps elements in the private sector could help voluntarily. Solutions will certainly be difficult. Uncle Sam got clever and finally resolved his dilemma by pulling into a gas station-the United States may not find its answers quite so easily."
Eddie Montoya, Hereford High School, Hereford, Texas

Definitions:

"First, let's understand national deficit and debt. Each year that the government spends more than revenues collected for that year, it causes a deficit. This deficit totaled with the previous deficits is called the debt, or the total amount of money the U.S. Government owes. The government must pay interest on the money it has borrowed to make up the deficits, thus adding to the debt if it can't be paid."
Larry Florea, Concordia High School, Concordia, Kansas

"The U.S. Treasury in its National Debt Debate on February 21, 1998 stated, 'The National Debt = debt held by the government + debt held by the public.'"
David Fakler, Concordia High School, Concordia, Kansas

"When the money from the U.S. budget is spent and expenses remain, the U.S. Government must borrow money. The money that the government borrows then becomes part of the national debt."
Kristina Brichalli, Concordia High School, Concordia, Kansas

"The national debt is the money owed by [the federal government.] It is usually in the form of bonds that are issued to finance budget deficits."
Kayli Chivers, Luck High School, Luck, Wisconsin

"Defined, the National Debt of the United States is the total of all the obligations of the Treasury to pay money to the federal government's creditors. It consists of bonds, notes and bills issued to the creditors when they lend money to the government"
Jenny Horkman, Concordia High School, Concordia, Kansas

"The National Debt is the total amount of money that the U.S. Government owes. Every year the government spends more than it collects from taxes, fines, fees, customs duties, [and] property sales. This runs up a deficit. Each year's deficit adds to the total debt. Last year the federal deficit totaled nearly $160 billion. In addition to the yearly deficit, the government must pay interest on the money it has borrowed. For example, to spend that extra $160 billion last year, the government had to borrow $160 billion. The government does most of its borrowing in the form of Treasury Bills and Savings Bonds. Each year the government must pay interest on these outstanding bonds, further adding to the National Debt. Interest payments alone consume 23 percent of the yearly Federal Budget.
    Before people can understand the real problem of the National Debt, they have to know the difference between the debt and the deficit. The debt and the deficit are two totally different things but people always seem to get them mixed up. The deficit is the actual amount of money borrowed each year by the federal government. The debt is the accumulated real deficits from year to year. The debt was started hundreds of years ago when our government first started borrowing money. A great number of people blame our country's debt on the 1980's, but if they look further, they can see it started prior to that time."
Bryson Benne, Concordia High School, Concordia, Kansas

How The Budget Works:

"The first step in understanding the federal budget is to know exactly what it is. It is a plan for how the Government spends our money. It is also how the Government pays for its activities and a plan for borrowing."
Jacob Letourneau, Concordia High School, Concordia, Kansas

"Many people wonder how [a budget is created.] The first Monday in February, the President submits a proposed budget to Congress. Congress also creates its version of the budget. After careful negotiation, the two reach what they decide is a budget. When Congress and the President sign [the agreement], there is an actual budget."
Kayli Chivers, Luck High School, Luck, Wisconsin

"The United States creates a new budget every year. The budget allows a set amount of money to be used for specific purposes."
Kristina Brichalli, Concordia High School, Concordia, Kansas

"The federal budget is a forecast of governmental expenditures and revenues for the next fiscal year. The responsibility of preparing the budget falls into the hands of the President and his Office of Management and Budget.…the budget has to go through many stages before it goes into action. First, several subcommittees of the House of Representatives examine the budget in great detail. Then, if needed, they propose minor amendments. Second, the budget goes through the examination of [the full House], which in past times has made a large impact on the final product. It then goes back to the President for his approval and signature. If the President completely disagrees with the changes, he can make additional adjustments and send the budget through the long process again and again until an agreement [is] reached."
Jillian Davenport, Paoli High School, Paoli, Oklahoma

"According to constitutional historian, Professor Forrest McDonald of the University of Alabama, it was understood that Congress was to provide a lump sum ceiling on expenditures and the executive branch was to determine how the funds were to be spent. More important, until 1974, Presidents repeatedly impounded appropriations and refused to spend them. Congress had no recourse. Thus from the inauguration of Washington until Richard Nixon's last year in office, Presidents employed several means to exercise what amounted to an absolute line item veto."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma

"Prior to the Budget Enforcement Act of 1974, federal spending was a relatively decentralized and disorganized process. The process was one of constant conflict between congressional authorization, appropriations and tax committees. We know that per capita debt started to rise in the mid-1960's and, thereafter, the increase accelerated. In an eight-year period between 1981 and 1988, about 1.7 trillion, or 32 percent of the U.S. current debt, was accumulated."
Bryson Benne, Concordia High School, Concordia, Kansas

Budget Enforcement Act of 1974

"The Congressional Budget and Impoundment Control Act of 1974 was the first major attempt to impose rules to work toward a balanced budget. It established the House and Senate Budget Committees and the Congressional Budget Office and required the passage of annual congressional budget resolutions for the first time. Before the year 1974, Congress passed separate revenue and appropriations bills each year, but never passed a piece of legislation specifying budget totals or the difference between revenue and spending. The Act was expected to result in smaller budget deficits because members of Congress would be reluctant to vote for budget resolutions specifying large deficits."
Kristin Carnahan, Hereford High School, Hereford, Texas

"The Budget Control Act of 1974 changed the fiscal year of the federal government so it runs from October 1 to September 30 and set up a timetable for when the President, the committees, and Congress had to submit their resolutions and pass the budget."
Vanessa Vesperman, Iowa-Grant High, Livingston, Wisconsin

"Each year, Congress must pass and the President must sign thirteen appropriation bills that include all of the discretionary spending. The President and Congress do not have to enact new laws governing entitlements or taxes."
Cressie Simoneau, Concordia High School, Concordia, Kansas

"The Congressional Budget and Impoundment Control Act of 1974…had as its aim to reduce budget deficits by making the budgeting process more open to the public eye. It was unsuccessful."
Eddie Montoya, Hereford High School, Hereford, Texas

"This act forbade impoundment, replacing it with recision and deferral. The Budget Control Act inadvertently created power struggles within Congress itself. The Act originally required ceilings to be placed on spending, but these ceilings would have restricted Congress's ability to [enact new] and increase the size of older programs without robbing the funds from other [programs]. To solve the problem, flexible spending targets were created instead of rigid ceilings. The Budget Control Act resulted in little success at curbing Congress's spending, and may even have helped to increase it. More recently, Congress has proposed a bill that would amend the Budget Control Act forbidding them from increasing any tax that applies to years before this bill was enacted."
Jonathan Haritatos, Concordia High School, Concordia, Kansas

"The…Budget Control Act of 1974…was wildly misnamed as far as the content of the act is concerned…Congress actually used this act to shift the balance [of] power [to] itself…Less than a month after the then-President, Richard Nixon, signed the Budget Control Act, he resigned. At the time of his resignation, Nixon had caused the Presidency to become weaker than it had been in [the] forty years since Franklin D. Roosevelt had been inaugurated."
Richard Condray, Concordia High School, Concordia, Kansas

G-R-H The Balanced Budget and The Emergency Deficit Control Act

"The 1974 deficit amounted to .4 percent of the Gross Domestic Product (GDP). In 1985, with the deficit exceeding 5 percent of the GDP, Congress enacted the Balanced Budget and Emergency Deficit Control Act, better known as the Gramm-Rudman-Hollings Act. This bill set specific targets for the size of annual budget deficits beginning in 1987, with each deficit targeted to be progressively smaller. Each area would be targeted until a deficit no longer existed. Congress planned that this would happen in 1991. In recession year 1990, GRH was altered again. It was pursued between President George Bush and Congressional representatives. The omnibus Budget Reconciliation Act of 1990 combined with other legislation implemented $42 billion of deficit reduction in fiscal year 1991. It also revised the deficit targets upward again and made them adjustable for revised economic and technical assumptions. These changes, which allowed the targets to be adjusted to take account of revisions in the economic forecast and in deposit insurance and other entitlement obligations, made the deficit targets effectively irrelevant."
Amanda Kriegshauser, Hereford High School, Hereford, Texas

"In the early 1980's, President Reagan and Congress agreed on a large tax cut, but could not agree on spending cuts. The President wanted to cut domestic spending more than Congress, while Congress sought fewer defense funds than the President wanted. By 1985, both sides were ready for drastic measures. That year, they enacted the Balanced Budget and Emergence Deficit Control Act, better known as [the] Gramm-Rudman-Hollings [Act]. It set annual deficit targets for five years declining to a balanced budget in 1991. The President and Congress never achieved those revised targets that year."
Stephanie Walker, Concordia High School, Concordia, Kansas

Balanced Budget Amendment

"Thomas Jefferson said, "My greatest regret in the drafting of the Constitution was not requiring a balanced budget."
Stacie Nelson, Concordia High School, Concordia, Kansas

"The Constitution is our nation's backbone. It is sacred, righteous, and makes the United States of America different from other countries. If the balanced budget amendment [had] passed…less pork-barrel legislation would have been able to be passed. The government would have had to balance the budget without citizen's approval. In order for the balanced budget amendment to be successful certain clauses must be added. The government must set strict guidelines for times when the nation can have a deficit, including times of war, depression, and extreme inflation….The balanced budget amendment would help force politicians, without voter's support, to stop deficit spending and, in turn, reduce and, quite possibly, eliminate our national debt."
Gina K. Walejko, Iowa-Grant High School, Livingston, Wisconsin

"Many argue that there should be a constitutional amendment to balance the budget but many have to ask themselves a question. Should a founding document that sets out the rights of individuals be burdened with a provision that many could interpret as special pleading for the bond market? The first proposal in 1935 failed when Roosevelt tried to amend the constitution to require balanced budgets. That idea, mostly Republican-backed, has been revived several times over the past 60 years, and at a more frequent pace since budget deficits began soaring in the early 1980's. Article V of the Constitution outlines the procedure for consideration of a constitutional amendment: A joint resolution must be approved by a two-thirds vote in both the House and Senate; after that, it must be ratified by three-fourths of the States."
Amanda Kriegshauser, Hereford High School, Hereford, Texas

Bryson, Laura and Jacob Weigh The Pros and Cons:
"Senator Larry Craig [said] 'Only one thing will make fiscal responsibility and tough choices the norm instead of the exception, but it will be a rickety, dangerous bridge unless it is constructed with the steel of the balanced budget amendment'. Founders of the Constitution and early Presidents agreed on the danger of an excessive public debt, but for about 150 years, balanced and surplus budgets were the rule. The government hasn't balanced the budget since 1969. The inability of Congress to match spending and income causes Americans to demand an amendment to the Constitution requiring Congress to balance the budget each fiscal year. Supporters say a balanced budget is needed…to avoid [burdening] future generations…with an overwhelming legacy of debt. Opponents say that balancing the budget is an important goal, but they argue that the Constitution should not be tampered with because the system is [already] in place for congress to create balanced budgets."
Bryson Benne, Concordia High School, Concordia, Kansas

"Many economists do not like the idea of a balanced budget amendment. They believe it would not allow Congress and the President to boost the economy in a recession…The opposing economists say that if the borrowing is to build a new mass transit system or improve air traffic control, hospitals, or prisons, then that is not bad. It is time to start worrying if the government is borrowing to pay pensions for retired public employees."
Laura Cook, Iowa-Grant High School, Livingston, Wisconsin

"Two senators, one for and one against the Constitutional Amendment for a Balanced Budget, were asked their reasons. Senator Larry Craig supported the Amendment. He said that the debt of $5.3 trillion is already depressing wages and living standards of the working families. He argues that a child born today will pay nearly $200,000 in additional taxes, not to pay down the debt but to pay interest on the debt. If we balance the budget by the year 2002 and keep it balanced, that will create 2.5 million new jobs and save a typical family $1,500 a year in interest costs on mortgages, etc. He closes by telling the dangers of the future welfare of the government without an amendment. On the other side of the coin, Senator Paul Sarbanes is against the amendment. He states that the balanced budget amendment threatens to turn economic downturns into recessions and recessions into depressions. He argues that [the] way to balance the budget is to make the budget decisions we are confronted with, not amend the Constitution. We have lowered the deficit down from 4.9 percent of gross domestic product to 1.4 percent. He closes by recapping his ideas and further pushing the 'no vote' for the amendment."
Jacob Letourneau, Concordia High School, Concordia, Kansas

"Just the Facts, Mam"- Jill, Karen and Amanda report:
"An important feature of Section 1 is that it imposes upon Congress and the President to prevent total actual spending. This guards against the possibility that actual outlays might exceed statement outlays the next fiscal year. Congress would then be required to enact a bill expanding a specified tax base and increasing specified rates. Section Three says that in an event of a declaration of war, Congress has discretionary authority to operate outside of provisions of the amendment. Section Four has a purpose to exclude the proceeds of debt insurance from receipts. Treasury notes and bonds would not count as receipts, but as proceeds of selling debt. The amendment permits Congress to plan for a budgetary surplus. The last section, Section Five, stipulates when the amendment would take effect. It would take effect for the second fiscal year beginning after its ratification."
Jill Morrissette, Concordia High School, Concordia, Kansas

"A compromise budget plan was presented to Congress in June 1995. The plan calls for a balanced budget by the year 2002. Under the plan, savings over the next seven years would total $894 billion while tax cuts totaling $245 billion would be implemented. Spending for nearly all government programs would be reduced except for defense, where overall spending would increase by $58 million."
Amanda Kriegshauser, Hereford High School, Hereford, Texas

"The Contract with America, or CWA, hoped to achieve a balanced budget for 1995. The first item of the CWA legislative agenda was the Fiscal Responsibility Act. The Fiscal Responsibility Act sought an amendment to the U.S. Constitution requiring that all expenses for any fiscal year not exceed the amount of revenue. The Amendment also required balance at the time of budget submission by the President, adoption by Congress and …execution. The Amendment only allowed three circumstances under which deficits would be allowed; when a Declaration of War is in effect, when a Joint Resolution is signed by the President and adopted by the majority of the total membership of each House saying that the nation faces serious military threat to national security and when outlays in excess of receipts are agreed to by three-fifths of the total membership in each House of Congress. The CWA amendment neglected to secure enough votes for ratification on January 26, 1995. Later that evening, a Balanced Budget Amendment drafted by Charles Stenholm and Dan Schaefer passed on a vote of 300 to 132. This Resolution was different from the CWA proposal in two major ways. It imposed no national debt ceiling…and no tax limitation provision. . The national debt ceiling is a limit set by Congress beyond which the National Debt cannot rise."
Karen Oeffler, Luck High School, Luck, Wisconsin

Students provided reasonable arguments:
"In the 105th Congress, the Republican leadership has put the balanced budget amendment at the top of the agenda. The balanced budget constitutional amendment proposal currently under consideration in the House and Senate would not guarantee a balanced budget but it would make an unbalanced budget much more difficult to pass…Those who support the amendment insist that the only way to balance the budget is to impose constraints on the process that cannot be easily overridden. Opponents contend that the deficit has already fallen significantly in recent years and that the Congress and the President should work together to maintain the trend. These critics caution that the amendment increases the likelihood of recessions by forcing Congress to cut spending and raise taxes during times of economic pitfall and prevent the government from responding to natural disasters and other emergencies. President Clinton also opposes the balanced budget amendment, as he expressed in his recent State of the Union address to Congress, 'Balancing the budget requires only your vote and my signature. It does not require us to rewrite our Constitution.'"
Andrew Carr, Hereford High School, Hereford, Texas

"Opponents feel that the amendment is not needed [and it] is likely to lead to major shifts in the balance of powers. [Suppose] the budget slipped out of balance during a year [and] Congress and the President could not agree on budget cuts or tax increases large enough to restore balance, and three-fifths of the Congress [fail to] agree to waive the balanced budget structure and raise the debt limit. In an event like this, the President or the courts could take the matter into their own hands. The court might order cuts themselves. They even could rule [that] the amendment gives the President unprecedented authority to cut programs unilaterally. Such authority goes far beyond line-item veto authority, which Congress can override and which applies only to recently enacted legislation…This amendment increases the likelihood that the fiscal policies adopted in the decades to come would favor the wealthy at the expense of the poor and average Americans. It would alter the congressional voting procedure. This amendment would require that legislation raising taxes be approved on a roll call vote by a majority of the full membership of both houses. Spending majority of those present and voting could be passed on a voice vote. The amendment would require more votes to curb special interest tax breaks than to cut programs such as Medicare and assistance for poor children. This raises the equity issues. Wealthy individuals and large corporations receive most of their government benefits through tax subsidies or tax expenditures. By contrast, most middle to poor income families receive their government benefits through programs."
Stacy Gering, Concordia High School, Concordia, Kansas

"Increasing exasperation with the deficit problems and with politicians' ability to circumvent budgetary restrictions has led to growing support for a balanced budget amendment. As the Congressional Digest explains, such an amendment would prohibit deficits unless authorized by a 3/5 majority in Congress, require the same majority to increase the debt, require a simple majority in each House to increase revenues, and only waive these provisions in time of war. Although popular in many circles, Professor of Public Policy, Allen Schick, points out some of the problems with such an amendment, explaining that it may not distinguish between the size of deficits, between deficits caused by cyclical fluctuations as opposed to structural causes, or between any number of factors that will have to be determined by legislation in order to implement a balanced budget amendment, and would be subject to countless loopholes. More importantly, it is the economy, and not politicians that have the ultimate say in determining national budgets."
Eddie Montoya, Hereford High School, Hereford, Texas

"Attempts to pass a constitutional amendment requiring Congress to balance the budget started during the Great Depression. Since then, Congress has been introduced to eleven balanced budget amendments. Each time the proposed amendment failed to get a two-thirds majority vote in both Houses, which is necessary for a constitutional amendment to be sent onto the states for ratification. The claim [that] the policy makers will only balance the budget if a constitutional amendment requires them to do so is, as of now, being proven incorrect. For more than 200 years, the nation strove to keep deficits small or non-existent except during wars or recessions. The only other time in the past 200 years that the government has adopted policies that made the deficit larger was during the early Reagan years. When it became clear that these policies were not working, Congress and three administrations spent the rest of the 1980's and 1990's pushing the deficit back. Progress was achieved without a constitutional requirement… The Congressional Budget Office did a study where deficits were held to approximately 1.5 percent of the Gross Domestic Product through 2030. The CBO projected that under such a policy, total income per person would grow 41 percent between now and 2030, after adjusting for inflation. The CBO also projected that if the budget were balanced each year through 2030, average income per person would rise 43 percent. This new finding illustrates the fallacy of the claim that the balanced budget amendment is needed to save us from an 'economic meltdown' and a deterioration of the living standards of future generations."
Rachel Wachter, Iowa-Grant High School, Livingston, Wisconsin

The disadvantages were readily apparent to students:
"The disadvantages of the amendment are that the federal government could require the states to continue programs without federal funding; it could cut funds for the poor; it could trigger significant short-term unemployment and by cutting Medicare and Medicaid, it could led to a reduction in services at hospitals."
Linda Scott, Concordia High School, Concordia, Kansas

"An amendment would…make education and children's programs extremely vulnerable. An amendment would also put a straight jacket on Congress and impose far greater restrictions on the average family."
Jacob Letourneau, Concordia High School, Concordia, Kansas

"[Some people] feel the…assumption that Congress would reduce spending rather than just raise taxes is unrealistic. Another reason the amendment might not work is that it gives constitutional cover for raising taxes."
Curtis Cantrell, Hereford High School, Hereford, Texas

"Keynesian economics state that if a recession is bogging down the economy, the government [should stimulate] spending. This would stabilize the GDP [gross domestic product]. This action might be delayed because Congress usually is very cumbersome in taking votes. If that would happen, the recession would keep spiraling down and down into depression. Another con would be that if the balanced budget amendment were to be passed, it would be pretty much permanent because only one other amendment was revoked, and that amendment took several years…That means [that] if the balanced budget amendment was to be passed and it were a total mistake, it would probably take several years for it to be revoked."
Matt Boyd, Iowa-Grant High School, Livingston, Wisconsin

"Congress and the President spend more money that [we] do not have and then raise the debt ceiling. A Balanced Budget Amendment would keep the debt ceiling from rising again…Many politicians are skeptical because they feel that it will not be effective. The Balanced Budget Amendment does not really cut much federal spending…One thing that makes the Balanced Budget Amendment ineffective is that the Democrats want to exclude Social Security from the cuts. If the Balanced Budget Amendment is going to work, it has to be universal and cut a little from all programs. Another reason the Balanced Budget Amendment might fail is because 'Congress is not a gentle place and a lot of things are what you and I would call rigged.' This amendment will be very painful and will take a lot of good budgeting. Future congressmen will make loopholes in the amendment. There will be 'real spending and phony cuts!'"
Barbara Larsen, Concordia High School, Concordia, Kansas

Below, Rachel, Stacie and Jody tell it like it is:
"In today's society, most of the voting population is centered around the Baby Boomers [who] …pay a good portion of our…taxes…it is most likely these people would reap the benefits of a balanced budget."
Rachel Wachter, Iowa-Grant High School, Livingston, Wisconsin

"Keeping a balanced budget for yourself is tough enough. Think of how difficult it is to keep a balanced budget for the whole population of the United States. Spending money is easy; saving the money is where we run into problems."
Stacie Haden, Concordia High School, Concordia, Kansas

"When people on the street are asked if they would like a balanced national budget, an overwhelming number of people say, 'Yes.' However, when they find out the details, the majority of the people say, 'No.'"
Jody Berg, Iowa-Grant High School, Livingston, Wisconsin

Students had their own ideas:
"In a recent survey, around eighty percent of interviewed citizens felt that a balanced budget amendment was a good idea, but when informed that this might lead to higher taxes or cuts in programs like Social Security and Medicare, support dropped to around thirty percent.…I feel that a constitutional amendment for a balanced budget, with exceptions in times of war or extreme depression, is the only way that…[will be balanced].…In order for this to work, citizens must become educated and they must realize that they will not always be pleased."
Gina K. Walejko, Iowa-Grant High School, Livingston, Wisconsin

"Ultimately, this amendment would violate the fundamental principle that elected officials should be responsible for government policy, and would put that power in the hands of the judicial branch."
Eddie Montoya, Hereford High School, Hereford, Texas

"Strong action is needed to reduce the long-term deficit. But a constitutional amendment requiring a balanced budget is not a sound way to achieve this goal. It is neither necessary nor wise, from the standpoint of keeping the economy strong, to have the Constitution mandate that the budget never be in a deficit in any year."
Rachel Wachter, Iowa-Grant High School, Livingston, Wisconsin

"Unfortunately, [under one] version of the balanced budget amendment…total government expenditures in any year, including expenditures for Social Security benefits, could not exceed total revenues collected in the same year, including revenues from…payroll taxes. The budget would be considered balanced when the deficit outside Social Security exactly offset the surplus inside Social Security. However, when that happens, the main purpose of accumulating a Social Security surplus [is threatened]. The benefits of the Baby Boomers would likely have to be financed in full by the taxes of those working in the years the Baby Boomers are retired. This version of the balanced budget amendment would undercut some of the central achievements of the 1983 Social Security reform.  
   Even though the Social Security trust funds will have accumulated large balances… when the Baby Boomers retire…The trust funds will spend more in benefits…than they were receiving in taxes. That would result in great deficit spending. This deficit spending could be offset by a corresponding surplus in the rest of the budget. Achieving such a large surplus in the rest of the budget would be an unachievable task, especially since Medicare and Medicaid costs will also rise when the Baby Boomers retire. Also, under the balanced budget amendment, reductions in Social Security could be used to help Congress and the President balance the [general] budget. This could lead to too little being done to reduce or eliminate deficits in the non-Social Security part of the budget and [to] unnecessary benefit reductions in Social Security.
   The balanced budget amendment is likely to lead to periodic mid-year crises, when budgets thought to be balanced at the start of a fiscal year fall out of balance during the year as a result of extremely slow economic growth. Because of the reductions to Social Security and other programs, I am against the balanced budget amendment."
Denise Gard, Iowa-Grant High School, Livingston, Wisconsin

"A constitutional amendment to balance the budget is not necessary. Requiring such a law could easily backfire. Since when has a petty law been able to curb 535 politicians and the entire Executive branch from doing what they have been content doing for years. Besides, a founding document as great as the Constitution of the United States of America should not be burdened with such a provision. The document outlines basic human rights and the amendment would cause a loss of respect and authority for the Constitution. The balanced budget depends most heavily on Congress."
Julie Schlabs, Hereford High School, Hereford, Texas

"The 'pay-as-you-go' method, which was devised under President Bush, created another hardship for those creating the budget. Those who proposed new spending on entitlements or lower tax rates were forced to offset the costs by cutting other entitlements or raising taxes. This method was devised to limit discretionary spending and force proponents of new entitlements and tax cuts to develop ways to finance them. This method of controlling the debt often creates a split.…the only way to create or add to a program without hurting other programs would be to raise taxes."
Leah McCann, Iowa-Grant High School, Livingston, Wisconsin

"I agree with [former President] Bush's plan: rather than setting annual deficit targets, he limited discretionary spending while ensuring that any new entitlement programs or tax cuts did not make the deficit worse…I believe that additional target spending would improve Bush's plan and make it effective enough to work for the Unites States right now."
Jana Williams, Concordia High School, Concordia, Kansas

Jonathan, below, sets the record straight:
"Budgeting programs like the Balanced Budget Amendment and the Budget Control Act tried to reduce [our] national debt [and failed.]…The United States of America is a country like no other. It is a place where its citizens enjoy an unmatched level of safety, wealth, and standard of living. However, these luxuries that our government helps provide for us come at a price. Americans have come to expect comforts like these, for which citizens and the government must somehow pay. That is where the Unites States' budget and national debt come in. However, what was created as a safety net has exploded into a great burden. With the staggering size and growth of the national debt, it is no wonder that a new emphasis has been placed on reducing it."
Jonathan Haritatos, Concordia High School, Concordia, Kansas

A Little History

"The debt hasn't been caused by mismanaging alone. It originally began in the 1790's when the United States was first established. Since the Revolutionary War had just ended, many of the states had incurred huge debts. When they all came together to form our country, the government assumed all debts. From this time until the 1980's, wars were the main cause of the national debt."
Jillian Davenport, Paoli High School, Paoli, Oklahoma

"The oldest data available shows the National Debt in 1870. At that time, it was 2.4 billion dollars. By 1910, it had shrunk to 1.1 billion dollars and after World War I, the debt grew to 24 billion dollars!"
Stephanie Walker, Concordia High School, Concordia, Kansas

"Congress raised or extended the temporary debt ceiling thirteen times during the 1960's and eighteen times in the 1970's. The permanent debt ceiling was set at $400 billion just to pay the interest on the national debt for one year. For many years, the permanent $400 billion debt limit held fast while temporary debt limits increased: $535.1 billion of temporal debt in 1982, $890.2 billion in 1983 and finally on May 26, 1983, the distinction between permanent and temporary debt limits was abolished. Since then, a less deceptive but steady rise in the debt limit has occurred, which amounted to $5.5 trillion at the end of March 1996."
Mandy Roberts, Paoli High School, Paoli, Oklahoma

"The Budget Resolution for Fiscal 1997 would balance the budget over the next 6 years, cutting projected spending by about $580.1 billion and produce $4.6 billion surplus by the year 2002. It also includes $122.4 billion in tax cuts. It cuts $158.1 billion from Medicare, $72 billion from Medicaid and $53 billion from Welfare. This resolution is a start in the balancing project and, hopefully, will start a series of events that will lead to a balanced and more stable nation."
Meredith Tabor, Hereford High School, Hereford, Texas

"According to the United States' National Debt Clock, the National Debt was at a height of $5,496,078,662.29 on December 16, 1997, while on March 11, 1998 it reached a new total of $5,524,170,246,052.48. In just three short months, the National Debt increased $28,092,161,390.19. These may seem like some large numbers, they [explain] why the National Debt has become such a large problem in the United States. Each American citizen's estimated share of the National Debt is $20,515.23, more than some…individuals earn in one year.
    Right now, the National Debt averages somewhere around $5,225,000,000,000.00. For many Americans, it is hard to imagine how much money this actually is. One source says that if one were to line up the dollar bills of the National Debt end-to-end, they would wrap around the world seven times. If one were to average a driving distance of 500 miles a day, it would take 2,768 years to complete the distance compared with the linear distance of the dollars of the National Debt."
Jenny Horkman, Concordia High School, Concordia, Kansas

"In this balancing act, even when the federal budget starts showing a surplus, the gross national debt will keep going up as the government borrows from one place to pay off another. That money will have to be repaid beginning in about 14 years, when the cushion of surplus Social Security revenues won't be available to offset other spending. The broadest measure of the national debt, now nearly $5.4 trillion, is projected to increase to $6.8 trillion in 2005 because of borrowing from trust funds designated for future costs. So amid the debate over spending future surpluses is [the fact] that there really won't be any."
Chelsie Ritchie, Iowa-Grant High School, Livingston, Wisconsin

Interest on the National Debt

"Around fifteen percent of the federal government's money goes to paying off interest toward the nation's Debt. Nothing is created. No food is put in starving children's mouths. No jobs are given to one-income families. No highways are constructed. Every year this percentage of wasted government money rises. In several years, one-third of the government's money could go toward nothing."
Gina K. Walejko, Iowa-Grant High School, Livingston, Wisconsin

"The money that the U.S. pays each year for interest on the National Debt is money that could be used to improve our society…[the] yearly interest could be used to…train one million displaced workers; put more than 250 thousand police officers on the streets; fund the operations of the FBI, State Department and Environmental Protection Agency; fund highway construction, safety, mass transit, and railroad projects for one year; educate half a million students for two semesters at a public college; and, build 200 thousand homes for disaster victims and the homeless. Those are only a few of the benefits that we are now living without because of the National Debt."
Kristin Brichalli, Concordia High School, Concordia, Kansas

"Approximately half of all individual income taxes are required to pay the interest on the Federal debt. The Federal debt is a heavy drag on the economy."
David Fakler, Concordia High School, Concordia, Kansas

"Our country spends more money each year paying the interest on the National Debt than it does on Defense."
Curt Cantrell, Hereford High School, Hereford, Texas

"Much of the Federal Budget is used to pay off the interest accumulated from the money the government owes. The money that the government owes is borrowed from the American public.…Over the past nine years (four with a Republican President and five with a Democrat), the interest alone on the National Debt has totaled $2,756,000,000,000, nearly $3 trillion. The amount of money that the Federal Government spends to pay interest on the National Debt is nearly astronomical. In 1996, the U.S. Government paid $344 billion to pay interest on the National Debt. The government spent nearly $357 billion in 1997 to pay off interest on the National Debt. The National Debt, itself, is well over the high figure of $5.5 trillion and is growing as this is being read."
Richard Condray, Concordia High School, Concordia, Kansas

"The Federal Debt grows by the minute depending on its interest rate of around three percent to twelve percent. The higher the interest rate, the more money owed. The government issues securities, such as savings bonds and treasury bills, in order to raise additional dollars to finance the Debt…When we finance the Debt it consumes national and foreign savings, meaning less money is available around the world for private and business investments, and the expansion of new technology and equipment. The drain of the capital money drives interest rates higher. Of course, we feel the high interest rates in our car loans, home mortgages, credit cards, etc. Additionally, the rates also hurt businesses by making them have higher borrowing costs which, in turn, drives prices up causing inflation. The Federal Reserve Chairman predicts that a balanced budget by the year 2002 would reduce interest by as much as two [percent], causing the Debt to decline."
Holly Weishaar, Hereford High School, Hereford, Texas

"In 1997, the interest on the Debt alone was $365 billion. That year, it took all the individual taxpayers west of the Mississippi River, or 58 million people, just to pay the interest on the Debt. The rising interest rates have caused citizens to pay more for car loans, home mortgages, and other personal debts. Businesses also have to pay higher costs to borrow money and then must charge more for the goods that they sell…The government is currently not paying anything on the still increasing Debt, so this is causing the interest to be more and more every year. The government must pay the interest each year, and these payments alone use up 23 percent of the [annual] federal budget. These interest payments that bought nothing could have paid [for] the cost of our Defense Department for eleven and a half years."
Justin Istas, Concordia High School, Concordia, Kansas

"Each year, the government loses more and more money on interest to the National Debt."
Jill Cibolski, Concordia High School, Concordia, Kansas

Students were motivated by their research. Meredith, for example recognized the importance of reducing the National Debt:
"The National Debt has grown to an astronomical sum. Too many tax dollars are spent on paying the interest on the Debt instead of on important government programs such as Social Security, Education, Crime Prevention, and Military and Defense programs. With [Debt reduction] more money could be pumped into educational funds providing for better education. With better education come higher paying jobs and more money in circulation, thus fueling the economy. Also, the interest rates of a balanced budget would fall, saving the citizens who are re-paying loans substantial amounts of money. Parents, who are working two or three jobs to put food on the table, would have more real income; therefore, they would be providing a better life for their family…American citizens should be educated as to the effects of an unbalanced budget. If this were done, more Americans would be more willing to let go of some of their entitlement earnings because they would regain the money in other ways, whether it is in lower interest rates or higher standards of living. For example, if the economy had grown as fast from 1975 to the present as it had from 1955 to 1975, the average family income would be $50,000 instead of the $35,000, which it is now. Also, more jobs would be available and at a faster rate if the deficit were reduced. This again is because of lower interest rates and the stimulation of business growth. A balanced budget would create 4.24 million jobs over the next ten years and a sixteen percent increase in per-capita income."
Meredith Tabor, Hereford High School, Hereford, Texas

Rachel expressed another point of view:
"Economists generally believe the best level for our National Debt is zero-that is, that the nation has no debt at all. They also believe we must balance the budget each and every year. If our national debt is considerable, we must tighten out belts, sacrifice, increase taxes, and do whatever is necessary so we can show a surplus, and get that national debt down to where it belongs-even if it necessitates a higher unemployment rate and nipping a boom in the bud! I will try to show that all of the above is quite wrong.
   When the government spends more than it receives…it must borrow money from other sources…The government borrows money by selling bonds to banks, individuals, and other investors. The bonds that the government borrows will eventually be paid back. The government bonds that are sold are simply IOUs that require the government to pay back the money to the investors along with interest.
   Government bonds are considered the safest of all possible investments because the government can raise the necessary funds to repay the borrowed money when bonds come due. It can also raise the money by selling new bonds. If enough money is not collected this way, the government has the power to raise taxes…
   Over the years, the government has accumulated a very large National Debt…Some people are fearful that if the National Debt becomes too large, [we] will become bankrupt. But this is not possible…because [the nation] has revenue-raising powers. If the government needs more money, it may sell more bonds or raise taxes…It is true that we are passing the National Debt onto future generations. But it is also true that the ownership is also being passed on. Many different solutions to the National Debt have been formulated, but none have ever really been put into full effect."
Rachel Wachter, Iowa-Grant High School, Livingston, Wisconsin

Students even tackled the dry subject of accounting:

"Disgracefully, the majority of the public is unaware of the financial state of the country. Under the current accounting system, cash-basis accounting, [there is] no written or visible record that informs the people when the government borrows to finance their investments. The cash-basis accounting treats large investments as current expenses even though the value of them rests in the future; in addition, it does not provide a dependable plan for the budget. On the surface, however, everything appears normal which could be fatal to the government.
    In contradiction, supporters of the cash-basis accounting argue that it provides the most control. They [maintain] that under the other accounting option, accrual accounting, the decision as to which budget-an operating budget or a capital budget-[an expenditure] would be classified as, would depend on political considerations. For instance, politicians would have their projects labeled as capital outlays so that taxpayers would not have to pay for them immediately, and they would not add to the deficit. This could mean the acceptance or rejection of their programs.
    Basically, neither accounting option helps the U.S. because, under cash-basis accounting, no financial statements are available to the public, and under accrual accounting, an official may get away with favoring a pet project before anybody discovers it."
Leslie Michael, Hereford High School, Hereford, Texas

Below, Vanessa and Jared attempt to clarify the subject:
"An accrual accounting system [books] the government's revenues and liabilities as they are acquired rather than when…paid…The cash-basis accounting doesn't account for the depreciation of assets and assumes that all assets are in mint condition until they are no longer used. The accrual accounting would depreciate assets so the government would know their true value."
Vanessa Vesperman, Iowa-Grant High, Livingston, Wisconsin

"Cash-basis [accounting] can be best interpreted as reporting an expense when it is paid, and recording income when it is received."
Jared Reed, Concordia High School, Concordia, Kansas

Garrett weighs the pros and cons:

"Even though cash-basis accounting allows the most control, it also encourages deficit spending by underestimating the actual deficit. This makes it almost impossible to plan intelligently under this system because things may look okay but may, in fact, be a problem."
Garrett Miller, Concordia High School, Concordia, Kansas

Amanda and Jill offer judgments:

"One of the first things Congress and the White House could do to relieve the pressure on spending, would be to take capital expenditures off the annual operating budget by creating a capital budget."
Amanda Kriegshauser, Hereford High School, Hereford, Texas

"By using the accrual-basis method [of accounting] rather than the cash-basis method, it is possible to set goals and due dates on payments. This would possibly allow for a more accurate set of accounting books. When using the cash-basis method, income and expense are only recorded when they have occurred. This method can distort income and expenses… The federal government uses this method of accounting although it prohibits publicly traded corporations from doing so.
    In 1975, the Federal Government predicated bailout loans to New York City on switching to the accrual-basis method of accounting. The 1988 reconciliation bill barred large farms from using the cash-basis method. The accrual basis method records income when a sale occurs whether it is the delivery of a product or the rendering of a service, regardless of when payment occurs.…Income earned in one period is accurately matched against the expenses that correspond to that period. Even though the cash-basis method is easier, the accrual-basis method is better because it shows gains and losses where a cash-basis method would not. It gives a clearer picture of the financial status by keeping track of all information."
Jill Cibolski, Concordia High School, Concordia, Kansas

There was much ado concerning the budget surplus in FY1998. Rachel, below, expressed skepticism even before the surplus was official:
"If there was a surplus in revenues this money, it is said, could be used to pay back part of the national debt. But, most likely, Senators and Representatives will want to take any surplus money back to their home states"
Rachel Wachter, Iowa-Grant High School, Livingston, Wisconsin

Shannon expressed the underlying problem succinctly:

"Each Congressman has a favorite program they won't see cut. And each American doesn't want to see the program they most benefit from get cut, so it's hard to get anything accomplished…Congress needs to forfeit their popularity and do what's best to expel the National Debt."
Shannon Small, Iowa-Grant High School, Livingston, Wisconsin

Cressie is not going to let legislators off the hook:

"Despite its name, mandatory spending is not fixed in stone. The President and Congress can change the laws that govern entitlements [and] taxes, but they must take explicit action to do so."
Cressie Simoneau, Concordia High School, Concordia, Kansas

Politicians reflect the sentiments of their constituencies:

"Today, politicians are so caught up in getting re-elected that it can cloud their minds. Too often, a necessary tax increase has been left until later because no one wanted to be known as the person who voted for the increase…Not only the politicians, but the voters also need to get some priorities straight. The Congressmen have good reason to be afraid of voting for a tax increase since almost everyone wants a tax decrease instead. Most voters wouldn't think twice about voting against someone who raised their taxes. [Voters] need to realize that the tax increase would benefit them in the long run. If Americans supported politicians who were trying to reduce the debt, even if they used tax increases and spending cuts, then politicians would be more willing to work at reducing the debt."
Vanessa Vesperman, Iowa-Grant High, Livingston, Wisconsin

"The federal lawmakers are caught between the contradictory demands of the voters who want lower taxes but continued government spending. If Congress lowers taxes, they cannot meet the financial needs of the nation, but if they raise taxes to meet the needs, they face angry voters."
Kristina Brichalli, Concordia High School, Concordia, Kansas

"This brings us back to one of the simplified solutions of raising revenue to control the National Debt.…The American people generally hate tax hikes, and the politicians hate displeasing the public. The public and the politicians are at fault in this area because politicians are too busy looking out for their own personal popularity, and the American people, while complaining about the National Debt., don't want their taxes to be increased. So these much-needed tax increases never take place."
Shannon Small, Iowa-Grant High School, Livingston, Wisconsin

So What About Taxes?

"The government makes us help by paying higher taxes and by putting more restrictions on our economic freedoms. In 1948, a normal family of four paid one to two percent of their wages to help the government. Times have changed though, and the normal family now pays twenty-four percent of their wages to the government. Interest on the Debt has been a big reason why we have had higher taxes."
Justin Istas, Concordia High School, Concordia, Kansas

"April 15 of every year is a day dreaded by just about every United States citizen. It is the deadline for filing family income tax for the previous year. Even though people complain, they do not realize it is the only way to keep the government running. It helps keep our military equipment up to today's standards, pays the wages of government officials, helps with research, and pays for welfare. Tax money that the government receives pays for Social Security, Medicare, and veteran's benefits also."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma

"About 41 percent of the Federal Government's revenue come from individual income taxes. That is equal to about eight percent of the GDP and has been estimated to be $691 billion in 1998. About 33 percent come from social insurance payroll taxes, which is the fastest growing segment of federal revenue. These involve Social Security taxes, Medicare taxes, unemployment insurance taxes, and federal employee retirement payments. Corporate income taxes, which account for eleven percent of the Government's revenue, have consistently shrunk as a percentage of GDP. The rest of the revenue collected is split between excise taxes and other miscellaneous taxes such as fines, custom duties, etc."
Shannon Small, Iowa-Grant High School, Livingston, Wisconsin

"The government may have to raise taxes, which is not a popular decision. Higher tariffs on oil or imports may be possible, but [then] foreign countries may not want to [purchase] our goods. Republican Senator Phil Gramm said, 'The average American household spends more on taxes than on health care, housing and nutrition combined. 'Congress is trying to relieve some of the pressure by promising not to raise taxes and trying to balance the budget…We can not always raise taxes to meet our demands. Saying 'No' may not be popular, but it may occasionally be wise."
David Fakler, Concordia High School, Concordia, Kansas

"Congress cannot agree on what would be the best solution to the Debt. Every day that they argue about possibilities, [it costs a billion dollars in interest charges.] One possible solution would be simply to raise taxes. There are three good arguments against this idea. First, raising taxes is highly unpopular because many Americans feel they are taxed too much already and they have little confidence in their public officials. Second, legislators are concerned about higher taxes having a negative impact on work, savings and investment. Third, many people feel that higher taxes will simply pave the way for further spending increases."
Karen Oeffler, Luck High School, Luck, Wisconsin

"One other way to decrease the Debt might be to raise taxes. One side of this might be that the National Debt is not as large as it is because Americans do not pay enough taxes, but because the government spends too much money. Another side is that Americans want to use all of the services that the government provides but they don't want to pay for them. Some experts say that Americans want a free ride. Paying more in taxes would decrease the Debt if it were used for the Debt and not…for [other] things.…So while the amount of taxes Americans pay have been increasing, so has the Debt. It seems to be going in the wrong direction."
Lisa Saint, Concordia High School, Concordia, Kansas

"Clinton will offer some tax breaks in his budget for the 1999 fiscal year, but they will be modest. The plan includes a break to middle-income people for day-care expenses and energy-conservation costs. The tax cuts would be paid for by closing corporate tax loopholes and eliminating some subsidies. The tax breaks can't be that great…because to get tax breaks people have to give something up, which, of course, many people don't want to do. They want the best of both worlds; to have lower taxes and still receive all the benefits of paying higher taxes."
Chelsie Ritchie, Iowa-Grant High School, Livingston, Wisconsin

"It is the duty of a citizen to pay their taxes. Taxes must be paid not just to control the debt, but for economic and regulating purposes."
Jana Williams, Concordia High School, Concordia, Kansas

Benefits of reform:
"Long-term economic benefits will flow from putting our fiscal house in order. Eliminating the deficit will help put our nation back on the path to lasting prosperity and a rising standard of living in the next century."
Jacob Letourneau, Concordia High School, Concordia, Kansas

"A surplus would…help corporations and businesses wishing to sell stocks and bonds. By paying off all of its debts, the government would no longer need to borrow money to pay interest. As long as no emergency occurred the government wouldn't need to offer bonds, so people interested in investing [and] who would normally buy government bonds would look to Wall Street instead."
Sam Marcum Iowa-Grant High School, Livingston, Wisconsin

Debt reduction is a hot topic:
"The National Debt is as hotly debated in the town halls and voting booths as it is in the nation's highest courts.… Agreement is widespread that the deficit should be reduced, in wake of the fact that large deficits hurt savings and investment, increase interest rates, curtail the formation of capital, and slow economic growth. The fact remains, methods of lowering spending and deficit reduction that worked in the past are now obsolete, and new more forward thinking measures must be addressed."
Andrew Carr, Hereford High School, Hereford, Texas

Reduce The National Debt-Yes, But How?

"The big question is how to control the National Debt. The Republicans want to cut social programs like Social Security, Medicaid, and Medicare. Democrats target the $254 billion dollar defense program for budget cuts."
Joshua Collette, Concordia High School, Concordia, Kansas

"A variety of opinions exist about ways to control the debt…[some] taxpayers ask themselves if cutting back on spending and trying to make the debt smaller is worth the sacrifice of programs government money supports."
Jana Williams, Concordia High School, Concordia, Kansas

"The President and Congress have long held a balanced budget as a political ideal. However, controversy still remains over how to best achieve that goal. Republicans tend to favor cuts in social spending. Democrats are fonder of cuts in defense spending while compounding spending toward social programs. … Many in congress wish to deter immigration by stripping most legal immigrants of most benefits. Most legal immigrants would be unable to receive food stamps. Others favor cuts in Medicare and Medicaid."
Andrew Carr, Hereford High School, Hereford, Texas

Are state practices relevant?
"Recently, federal and state budget practice had been subject to comparison…[There are] six critical points…[First], many states [are] required to balance their operational budget, not their total budget. States maintain separate budgets for operating expenses and capital expense. Investments in roads, bridges and school construction are often not subject to budget balancing requirements. [Secondly], many states have established rainy day or reserve funds…[Thirdly], many states require that the governor submit a balanced budget or that legislature enacts a balanced budget but not that year-end balance actually be achieved. Two other points are the federal budget has a larger impact on the United States economy than state budgets do and many states allow governors to act unilaterally without legislative approval to cut spending in the middle of a fiscal year. The last point is the majority of states require the same number of votes to raise revenues as [they do to] cut programs."
Stacy Gering, Concordia High School, Concordia, Kansas

Students know reducing the deficit isn't enough:

"Clinton has a plan of reform for the next five years. However, he intends to move many spending programs to an off-budget status which, in turn, lowers the deficit, but doesn't lower the Debt. This focus on the deficit while neglecting the Debt, causes the interest on the Debt to increase even more."
Bill White, Paoli High School, Paoli, Oklahoma

"The Senate says it will not pass any bill that balances the budget unless it also sets aside money to pay [off] the Debt. Starting in 1999,the American Debt Repayment Act will [prevent] outlays from exceeding revenue. [Supposedly] enough of the annual revenue will be set aside to pay off the debt by the year 2029."
Joshua Collette, Concordia High School, Concordia, Kansas

Students Recommend:

Regulate spending more closely:
"Medicare is costing us too much; the cost of Medicaid is shared between the states and the Federal government. I think Medicare should account for [a smaller] percentage of the Federal budget"
Jana Williams, Concordia High School, Concordia, Kansas

Prioritize:
"If the government was to [prioritize] expenditures, making sure that mandatory items are paid for first, then the government would have enough money to pay for wanted items.… Every household must balance a budget. If they believe that they will be short on money for the month, they may decide to postpone any unnecessary activities for the month. They make a list of their priorities. Wants and luxuries are at the bottom of the list; they are purchased with any excess money that is available. Social Security, Medicare, and veteran's benefits are necessities that need to be paid for first."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma

To rev the economy reduce spending and lower taxes:
"Some people say just print more money, but that would make all situations worse because the value of the dollar would decrease. The only way to minimize the debt is to cut back on major expenses, which would cause the debt to stop increasing so drastically at once. Then they could cut back on taxes that people pay. When people spend less money on taxes, they have more money to spend other places. This revenue, in return, rises and the debt decreases."
Mark Nelson, Concordia High School, Concordia, Kansas

Auctions:
"One way we can help the budget is to plan for more auctions for communications-spectrum licenses by the Federal Communications Commission, which will provide $20 billion in revenue by 2002."
Jacob Letourneau, Concordia High School, Concordia, Kansas

Deflate the bureaucracy:
"The government makes budgets too high for the departments. Decrease their budgets, because the government could use some of the money to pay off the debt."
Amanda Webster, Paoli High School, Paoli, Oklahoma

Amanda got a little carried away:
"All money taken from work paychecks should be in a direct deposit to the national debt. The people of the United States work and they get about fifteen to twenty percent of the money taken away for taxes. Then, all the tax money goes to things we can live without."
Amanda Webster, Paoli High School, Paoli, Oklahoma

Government must be a smart shopper:
"The United States [Government should do some] comparison-shopping…The U.S. has had a tendency to pay overly exaggerated prices for their governmental products and materials. In some cases, they have records showing that they have spent up to $500 for a calculator that only retails for $100."
Jared Reed, Concordia High School, Concordia, Kansas

Solicit voluntary contributions:
"If every person in the United States pitched in five bucks, in about twenty years we might get rid of the national debt."
Branum Keith Webster, Paoli High School Paoli, Oklahoma

Reduce spending and raise taxes
"The Concord Coalition suggests that we reduce government spending and increase taxes for a short-term sacrifice."
Jacob Letourneau, Concordia High School, Concordia, Kansas

Erase! Start over!
"I don't know, maybe we could all forget about the deficit and start all over. If it's money we owe ourselves, then if we didn't pay ourselves back, it wouldn't be such a bad thing. I sure don't have a burning desire to pay myself back. Let's just start all over."
Garrett M. Benson, Paoli High School, Paoli, Oklahoma

How about a freeze?
"Government programs to employ millions of people were…started during the years of President Roosevelt to help with the depression. Since then, hundreds of programs have been established and are receiving an increase annually to keep them going. This increase which is helpful to the projects, and sometimes even felt necessary due to our annual inflation, could easily be done away with for just one year. [Inflation is low and these] programs would survive…This would be…[a freeze, not a] cutback…If we could [eliminate] the annual increase on Medicare, Medicaid, Social Welfare and more [programs], the economic welfare of the United States would improve dramatically."
Holly Weishaar, Hereford High School, Hereford, Texas

Reduce COLAs [Cost of living adjustments]
"The federal pension system consists of payments made to retired civil and military workers. The problem arises in the system used to adjust the payments issued to the pensioners. As it stands right now, the cost-of-living adjustments, or COLAs, are far too excessive. To eliminate yearly debates over how much money [should be used] to increase the pensions, they were placed on a plan that would automatically increase them by the same percentage as the official inflation indicator, the Consumer Price Index, or CPI. However, in creating this plan, Congress never realized that three-fourths of retired federal employees collected more than one pension, making the COLAs far too excessive. As time goes on and the indexed pensions are compounded repeatedly, pensioners are receiving undeserved amounts of money. One possible solution would be to grant only one COLA equal to the maximum Social Security payment. This cap on COLAs could reduce the pension payments by 50% and bring equality to the system. Fortunately, Congress has introduced the Public Pension Parity Act of 1997, an act which promises to do just this."
Jonathan Haritatos, Concordia High School, Concordia, Kansas

David and Gina caution that getting the job done may not be so easy:
"The United States spends billions on entitlement programs, insurance programs, and farm payments. The amount spent on education, technology, housing, transportation, and foreign [aid] has shrunk. Each interest group is crying for more money, but it may not always be available."
David Fakler, Concordia High School, Concordia, Kansas

"'Do not cut Social Security or Medicare,' say the elderly.
'Don't touch interest rates, ' argue the Baby Boomers.
'Please don't reduce farm subsidies,' plead farmers.
'Fix the debt!' they all yell.
There are two sides to every argument. The environmentalists do not need defense and the military doesn't need national parks."
Gina K. Walejko, Iowa-Grant High School, Livingston, Wisconsin

Once again, Jacqualyn is extremely persuasive:
"As we examine current spending, it becomes apparent that there are four large groups into which government spending falls: interest payments on the national debt, national defense discretionary spending, non-defense discretionary spending, and entitlement spending…Interest payments on the national debt is the one area of federal spending that cannot be cut; therefore, it needn't be considered.…Considering non-defense discretionary spending, which is 17 percent of the estimated 1998 annual budget, we find that this category entails a wide array of programs including education, training, science, technology, housing, transportation, and foreign aid. Some of these programs constitute investments in the future and should be protected as much as possible, but others are less vital. While they are all important when it comes to budget cuts, most likely they would all need to be cut to some extent, and some to a large extent.
    Entitlement spending comprises an estimated fifty-two percent of the budget, embodies a variety of programs, and is one of the most ardently defended areas of the budget. In addition, it is the fastest growing percentage of government spending. If deficits are to be reduced, this will most likely be where the most significant cuts will be made. Some programs cannot and should not be cut. Federal pensions and Social Security represent government obligations made in the past that [should] not be defaulted on. Many [people] will be entirely dependent on these programs…If change is to be made…it must be to change the structure [which will] affect future [generations], not present recipients. Other programs, like Medicare, Medicaid, and welfare entitlements will also have to be restructured. These programs are unsustainable at current rates of growth, and will soon overwhelm the [annual] budget if corrections are not made.
    It is imperative that while solutions are sill possible, something be done about our enormous debt. We can only do this by ending deficit spending, [which will require] sacrifice."
Jacqualyn Bezner, Hereford High School, Hereford, Texas

Maybe the national debt isn't so bad after all:
"The word 'debt' has a bad stigma attached to it. Why? I can't wait to get into debt. My family is in debt. I'm not worried about a silly little word like 'debt,' neither is my family. As long as your debts do not exceed your assets, debt is a good place to be in. [Especially during times of high inflation.] The same is true for a nation such as the United States. In the U.S., assets outnumber debts. As long as our GDP grows more in a year than our National Debt, the U.S. will be okay."
Jody Berg, Iowa-Grant High School, Livingston, Wisconsin

"The government supports many social programs and each program seems necessary to the people it helps and their lobby groups…Government spending not only helps people through social programs, it also helps businesses continue running by keeping up aggregate demand. As demand increases, businesses…hire more people, so government spending indirectly helps people stay employed. Deficit spending seems to do more good than harm."
Vanessa Vesperman, Iowa-Grant High , Livingston, Wisconsin

"Like a lot of businesses that run on debt, the government is doing the same thing. Many companies borrow money to expand or grow. In the case of the government, it is no different. The government borrows to fund public programs that give jobs to hundreds of people, and if the government was to just start cutting programs, those people would lose their incomes and the businesses those workers shop at would lose money and so on.
    By borrowing large amounts of money, the government takes away from businesses. When the government wants money,[it sells Treasuries.] People buy [government] bonds because they are a safer investment than buying stocks. But when there is less money invested in the stock market, companies cannot hire more people or maybe they have to lay off large numbers of people. This hurts the economy…and when banks invest in the government they have less money to loan to their customers. This decrease in funds increases interest rates on loans and then people will not borrow money for something they had planned on buying that would help the economy.
    In conclusion, I think that the National Debt, in moderation, is not such a bad thing. A huge national debt would take money from potential investors and slow growth in a lot of companies. It's bad because it is so huge that even the interest that is paid on it is phenomenal. But one good thing about the National Debt and the Budget Deficit is that it is a sign that the government is spending money, which helps the economy."
Greg Vondra, Iowa-Grant High School, Livingston, Wisconsin

"The only way the debt could get out of control is if it began growing faster than the economy is growing. At this time, the debt is not posing a threat to America and is actually helping our economy grow. It would cause more problems to reduce the debt than continue government spending as it has been. At this time, it is probably in America's best interest to continue government spending, but try to keep the debt from expanding at dangerous levels."
Vanessa Vesperman, Iowa-Grant High, Livingston, Wisconsin

Is Andrew, below, right that the U. S. Government should redefine itself as a social agency?
"As our nation and our government approach the 21st century, we must come to grips with the transformation of our government from an instrument of defense into a social agency built to help the elderly and the poor."
Andrew Carr, Hereford High School, Hereford, Texas

Not all students agree:
"I…feel that our government should concentrate on reducing federal…social programs…There are programs such as Medicare, non-defense discretionary spending, and food stamps that could be regulated more closely. These programs are costing the Unites States a lot and a cutback on money spent for them wouldn't hurt our economy.…Non-defense discretionary spending has shrunk as a share and I believe it could be reduced even more.…Finally, all this could be accomplished by setting stiffer targets for spending. A President should [place] a tougher cap on total annual discretionary spending, which I feel would improve our debt crisis."
Jana Williams, Concordia High School, Concordia, Kansas

Kirstin understands the dilemma:
"While Roosevelt started many entitlement programs during the days of the Great Depression, the American people cannot control the specifics of the budget as lawmakers do. [The public elects politicians. Politicians] pass laws to please the people and eventually to be re-elected. If a homeless man on the street were given a warm bed in a shelter set up by the government, he would be foolish not to take advantage of it. But the money to pay for the food this man is given, the cost of blankets and pillows and showers, and other toiletry items, and even the cost of gas to heat the building all come from somewhere, and more often than not, it comes from the federal government, and adds to that year's deficit. If the government did not give the money to people in some form of welfare, the national debt would not be as large, but a great many people would die of starvation and disease."
Kristin Carnahan, Hereford High School , Hereford, Texas

Misconception regarding the amount of money spent on foreign aid:
"Food aid…to other countries, I feel, is also costing too much money. As long as our government is spending more than it is taking in, we will suffer. Our nation's security and success should come first before we spend money to [assist] countries with food."
Jana Williams, Concordia High School, Concordia, Kansas

"It is very sad to hear about little kids dying, but what about the kids here in the United States rather than the ones in other countries. Also, when we go to war we send money for the repairs and send money for food. We could still help, but not go overboard with spending money. What would happen if there were no more money left to even take care of our own country. Do you really think that they would help us?"
Amanda Webster, Paoli High School, Paoli, Oklahoma

"Items such as money sent to other countries to help them financially can be postponed."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma

Many Americans overestimate the amount the United States sends to other countries. Foreign aid is, in reality, a minuscule portion of our national budget which is approaching the 1.7 trillion mark. In fact, since 1993 we have reduced international development and humanitarian assistance 25 percent. With alerts for terrorists in effect, citizens might be alarmed to know we have even cut back on international security assistance four percent and funding for foreign information and foreign exchange activities by twelve percent in the past five years.

The role of government:
"The government can lessen armed forces expenses and limit their spending. We could also not send as many people to the military when no one is being used. Save the money."
Amanda Webster, Paoli High School, Paoli, Oklahoma

But is that true?
"Some spending the government cannot cut, like military hardware. They buy supplies with a contract. The government must fulfill their agreement. Therefore, they cannot cut this spending."
Barbara Larsen, Concordia High School, Concordia, Kansas

"National defense discretionary spending is the area of the federal budget that provides funding for the various branches of the military. This totaled approximately 15 percent of the budget last year. This is one area that is often targeted for spending cuts. How feasible that is, is uncertain, however. If we are to have a strong, secure country, we need to maintain our preparedness for any sort of conflict. But when we look at the amount of defense spending in the past, we find that defense spending has been [recently slowing]. In the past, it has been a convenient target for budget cuts, but it is becoming increasingly more difficult to cut."
Jacqualyn Bezner, Hereford High School, Hereford, Texas

Michelle, below, gets tough:
"Many people wonder what causes the members of Congress to continue to spend more on federal expenditures than is brought in by federal revenue. One of the causes of this is that at least two-thirds of our federal expenditures are on social spending programs. Some examples of these programs are Medicare, Medicaid, school lunches, farm and business handouts, job training, education, and Social Security. These programs are helpful to many people, but they do not always [reach] those who need [assistance] the most. The Constitution doesn't give Congress the authority to develop these programs. James Madison, the father of our Constitution said, 'I cannot undertake to lay my finger on that article in the Constitution which grants a right to Congress of expending, on the object of benevolence, the money of their constituents.' This may seem cruel and harsh, but these programs are exactly what are putting the U.S. Government deeper and deeper into debt. With all of the money owed to these groups added into the National Debt, the total debt is over $24 trillion. Not all cuts to these programs would seem fair. They would be painful to many people, but no more painful than it is for someone who is trying to dig themselves out of debt."
Michelle Larsen, Concordia High School, Concordia, Kansas

Private and public charities , wake up!! Where did Leah get the ideas expressed below?
"Most federally funded programs benefit us all whether we know it or not. People scoff at welfare and unemployment (how it is a waste of their money) but we need these programs to keep the economy rolling. Without these programs, the burden of the poor would fall onto private charities that the public would have to donate to. I would rather pay taxes to institutions that will deal with your money fairly and equally. Not all people would get an equal chance for unemployment and welfare if it were left to private charities. I believe that we need the government, and with having a government, we must pay to keep it going."
Leah McCann, Iowa-Grant High School, Livingston, Wisconsin

Michelle may have been tough earlier on foreign aid, but that may seem mild compared to Heather's stance on domestic assistance, reproduced below:
"It's great to want to help people, but our Constitution does not authorize Congress to do so. Its spending authority is Article I, Section 8 of the Constitution. A dim-witted Congressman might say, 'We do have authority for those spending programs under the welfare clause.' Yeah, whatever. James Madison, the father of our Constitution, said, "I cannot undertake to lay my finger on that article in the Constitution which granted a right to Congress for expending, on the object of benevolence, the money of their constituents.'
   We cannot lay the entire blame, not even an important share of it, at the feet of Congress. American people are to blame for our fiscal mess. We elect Congressmen who will the power of their offices to take some other American's earnings to subsidize: our children's education, our farms and businesses, our retirement and medical needs, and volumes of other desires. Any Congressman who'd respect, heed and obey the letter and spirit of the Constitution would not get our vote. Our hero is the Congressman who exhibits the deepest contempt for the limitations of the Constitution's Article I, Section 8.
   Maybe I am being too harsh. Maybe my fellow Americans think Congress is authorized to do anything that's wonderful. In that case, I'd suggest that we heed Abraham Lincoln's admonishment, 'Study the Constitution. Let it be preached from the pulpit, proclaimed in legislatures, and enforced in courts of justice.'
   We vote these people into office. When they do not follow the guidelines of the Constitution we should vote them out. It is that simple. Only there is one catch: We must first understand the Constitution. Do the teachers in our schools know how to teach a true understanding of the Constitution? Do they want to teach the real Constitution? Or are they content to see this country drift into socialism? Constitutional ignorance is curable, whereas constitutional contempt is hopeless."
Heather Weingartner, Paoli High School, Paoli, Oklahoma

Misty picks up on her classmate's rhetorical question and takes education in another relevant direction:
"Investing money into our future is an excellent way to balance the budget. Taking care of schools and other education facilities will prove to have a positive outcome. Education is very important to the future of our nation. Without it, we would not have anyone sophisticated enough to balance the budget. Teach students today how to balance their budgets, and one day they may be able to plan and balance our nation's budget. The future of tomorrow depends on the actions of today."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma

We turn now from James Madison to Thomas Jefferson:
"One of our Founding Fathers, Thomas Jefferson, discouraged bringing the nation into debt saying, ,The question whether one generation has the right to bind another by the deficit it imposes is a question of such consequence as to place it among the fundamental principles of government. We should consider ourselves unauthorized to saddle posterity with our debts, and morally bound to pay them ourselves.' As a result of Congress' obvious disregard of his words, the country has fallen into a startling $5.3 trillion debt."
Leslie Michael, Hereford High School, Hereford, Texas

Once again, Rachel interjects a less popular and optimistic viewpoint:
"Contrary to what many Americans believe, the nation's track record in limiting deficits to lower levels is good. A recent Congressional Budget Office analysis shows that if deficits are kept to modest levels in the future, the economy will grow at a solid rate and future generations will be better off than current generations… The deficit had declined from 5.1 percent of the Gross Domestic Product in 1986 to 1.4 percent in 1996."
Rachel Wachter, Iowa-Grant High School, Livingston, Wisconsin

What do Americans think of Social Security these days?
"What do Americans think of Social Security these days? Most have given up on the program. More young people believe in UFOs than the idea of receiving a Social Security check when they retire, which leaves them to wonder why they are even paying taxes for Social Security when they won't receive any when they are at retirement Today, there are three workers for every retiree. By the time the 76 million Baby Boomers, which includes us, begin to retire there will only be two. This is kind of scary, knowing that I may not receive a social Security check when I retire and it makes me wonder what the government will do about it to make sure that we do get something."
Chelsie Ritchie, Iowa-Grant High School, Livingston, Wisconsin

"The federal government will spend an estimated amount just shy of $1.7 trillion in the 1998 fiscal year. This spending is a compilation of many categories, the largest being Social Security. Social Security provides support to more than 43 million retired and/or disabled workers and their families."
Bill White, Paoli High School, Paoli, Oklahoma

"Social Security and Medicare account for 35 percent of all government spending, and interest on the National Debt alone is up to $365+ billion each year."
Jenny Horkman, Concordia High School, Concordia, Kansas

"The Social Security Administration was created by the Social Security Act of 1935 to administer the nation's Social Security program. Today, the program is made up of three main parts to help three different groups of people The first part is the old-age, survivors, disability, and hospital insurance which is also known as OASDHI. OASDHI forms the foundation of the social security system. It provides a means of income to over 90 percent of the elderly who otherwise would not be able to achieve some kind of economic security. It helps replace lost income due to retirement, disability, or death. It even pays part of the medical care for people age 65 or older, allowing them to get the care they need. The second part is unemployment insurance. It was established to provide weekly cash payments for workers who have lost their jobs provided that they look for a new job while they receive payment. The last part is worker's compensation. Worker's Comp, as it is commonly known, aids people who are injured as a result from their job. It also pays death benefits and pensions to the dependents of a worker who was killed due to work."
Jillian Davenport, Paoli High School, Paoli, Oklahoma

"Social Security, which accounts for 23 percent of federal spending, was created as a way to provide a pension for supporting retired people who were too elderly or sick to work for a living. The retirement age was set at 65, although at the time, few people lived to be 65 or older. In other words, the government committed itself to fund something that they never expected anyone to use…However, as technology and medical breakthroughs improved so did the average life expectancy of Americans. Today, most Americans live [to be] much older than 65 and a huge population of aging Baby Boomers will be eligible for Social Security in the next 10 years. This creates a huge crisis."
Jonathan Haritatos, Concordia High School, Concordia, Kansas

"Social Security is an off budget entitlement program and one of the largest social programs the government sponsors. [It] accounts for over one-fifth of annual spending. The government uses the Consumer Price Index and the annual cost of living adjustments to determine the amount every retired worker and disabled citizen receives. They do this by raising…the payments to compensate for a change in the cost of living.…By the time today's college graduates retire, Social Security will not have sufficient funds to continue to make payments. Sometime between 2003 and 2015, the number of workers will decrease to the point the taxes deducted from their paychecks will not be able to support the large number of retirees…The problem of poor money management falls on the shoulders of the government. It is true that they currently have a growing surplus of…in the Social Security fund, but the surplus is simply a promissory note. In order to decrease the deficit, the government borrows the surplus instead of investing it; therefore, it becomes part of the national debt. President Clinton and Congress are trying to eliminate the problem."
Joshua Collette, Concordia High School, Concordia, Kansas

"Right now, more people pay into Social Security than receive Social Security payments. By the year 2015, [this] situation will reverse. [This] means [that] if the United States does not figure out something soon, we will go into a deep dark hole. Medicare is doubling in cost every ten years."
Bryson Benne, Concordia High School, Concordia, Kansas

"If the Social Security fund is not replenished soon, when the Baby Boomers retire, American will go into economic chaos."
Lisa Saint, Concordia High School, Concordia, Kansas

"Most people think that there's a separate Social Security Trust Fund into which the government deposits the payroll taxes that we pay, plus the income tax that some high-income retirees pay on their Social Security retirement benefits. That's the way a truly separate trust fund would work…Instead, the government counts all the Social Security payroll tax and income-tax money that it takes in as revenues and counts the checks it sends to retirees and disability recipients as an expense. The effect is that Social Security cuts the federal deficit about [$70] billion a year.
   The government doesn't count as an expense the huge and growing interest payments it pays the Social Security Trust Fund. That interest is money the government is pledging to future Social Security recipients, but that doesn't count as an expense in the federal budget. If a separate trust fund actually existed, that interest would be called an expense. Instead, because the fund is merely an account at the Treasury, the interest is considered money that the government shifts from one pocket to another, and therefore not an expense. For right now, we do not need to worry about Social Security going broke."
Megan Hetfeld, Luck High School, Luck, Wisconsin

"Social Security really is not that bad. It is a program that helps workers; retired workers and their families get a degree of economic security. It provides cash to replace lost income as a result of retirement, unemployment, disability or death. It also helps pay the cost of medical care for some people 65 or older. One in seven people receive Social Security benefits. You can get the benefits by working a certain period of time in a job covered by Social Security…The Medicare program for the 65-years-or-older [person] consists of hospital insurance for them and their dependents. It helps cover the cost of the initial amount of the hospital bill for each time they are sick.
    Another Social Security program is unemployment insurance. It provides weekly cash payments for people who have lost jobs and are looking for jobs. Worker's Compensation is another social security program that pays the cost of health care and the lost income of people that get hurt on the job or get a disease from their work. It also pays death benefits and pensions to the dependent of workers who have been killed on the job. If [people] [take] Worker's Compensation, they also forfeits their right to sue an employer from job-related disabilities."
Branum Keith Webster, Paoli High School, Paoli, Oklahoma

"The Social Security system is now building up reserves. By 2019, these reserves will be nearly $3 trillion. However, after that, as the majority of the Baby Boomers move into retirement, it will be necessary to draw down the reserves under the present law. It is likely Congress will act to support Social Security's finances by reducing benefits or increasing revenues before then and causing the reserves to grow larger and last longer than the 2019 year indicated under current projections. [By increasing reserves while Baby Boomers are working, and drawing reserves down in retirement, the government is doing] what families do by saving for retirement during their working years.
    If the Social Security surpluses were to be used in the next two decades to increase national saving rather than to offset the deficit in the rest of the budget, that would…enable the country…to support the Baby Boomers when they [retire]. To do this, the deficit in the non-Social Security budget would need to be reduced significantly or even eliminated and further reforms in Social Security would need to [occur] to restore [the system] to actuarial balances."
Denise Gard, Iowa-Grant High School, Livingston, Wisconsin

Social Security Fraud
"We must also become honest people who don't try to get all we can out of the government. Too many people in today's society try to get out of paying their taxes. Others don't even file taxes for years. The biggest problem of corruption can be found in the subprograms of the Social Security Program. In every town, someone is trying to outdo the system. A good example is one of a man who bought my grandmother's house. He is an older man who claims SSI due to what he claims is a chronic back problem. He supposedly isn't able to work at all but, on any given day, he can be found doing a number of strenuous activities. In the past couple of years, during which he was claiming SSI, he has added a chimney, a pipe-fence, and a tin roof to his house. He also drives a tractor on a regular basis, an activity that would be impossible if a person was a victim of severe back pain. Unfortunately, these kinds of cases cause many politicians and American citizens to come to the conclusion that we don't need the Social Security system. These people only look at the problems and don't consider the impact the Social Security program has on many of America's elderly and the legitimately disabled."
Jillian Davenport, Paoli High School, Paoli, Oklahoma

"Programs such as Social Security, Medicare, Medicaid, and Food Stamps are worthwhile projects, but when they are abused by citizens, they tend to [put] questions in the minds of Americans. Increased verification of need and security are required to ensure an honest… distribution of these funds.… The American people must let the President and Congress know through active communication that they are expected to strictly adhere to the budget they set each fiscal year,…With increased pressure from voters, lawmakers may more readily stay on their toes."
Julie Schlabs, Hereford High School, Hereford, Texas

"President Clinton is on the right track to fixing Social Security. He believes that the public needs to be informed about the system if it is going to be successful. Therefore, he has planned to attend many conferences on Social Security reform. He will then host a White House conference to share his findings with the nation. By keeping the people informed about Social Security, hopefully, more will understand the need to get rid of the abusers. When they see a SSI recipient that works just as hard as the next guy, they will immediately turn him in."
Jillian Davenport, Paoli High School, Paoli, Oklahoma

Social Security Reform Alternatives

Easy to Fix?
"Social Security's problems are, in fact, not as bad as generally imagined. Overall, government entitlement programs-from federal pension to the ever-more-expensive Medicare, are out of control, but Social Security can be fixed relatively painlessly, according to what some people think…[One] step could include raising the taxes on benefits for wealthier recipients and pushing the age of eligibility higher than is now planned."
Chelsie Ritchie, Iowa-Grant High School, Livingston, Wisconsin

"One reform is the means-testing reform, which would determine an individual's benefits according to his or her financial resources."
Joshua Collette, Concordia High School, Concordia, Kansas

"According to a report in 1996, starting in 2012, the taxes paid into Social Security will no longer cover the benefits going out as millions of Baby Boomers begin retiring. There are several opinions as to how to fix this program, such as investing some of the money in the trust fund in the stock market, which has a present return rate of ten percent. Some skeptics fear that if politicians objected to investing in these index funds, they would find ways to direct the dollars toward favored industries.
    Another alternative reform is to adjust the Consumer Price Index to minus one percentage point, which will greatly affect the cost of living adjustment standard. Some do not believe the CPI truly measures the COLA correctly to begin with. It may understate inflation because older people are big consumers of health care, and medical costs have been rising faster than other prices. A shift to minus one would definitely affect older people. The cost of living adjustments would be considerably lower, and that would mean less money in Social Security recipients' pockets."
Denise Gard, Iowa-Grant High School, Livingston, Wisconsin

Chelsie is one of those skeptics Denise referred to:
"The latest commission looking for ways to rescue the Social Security system has decided the government is incapable of fixing itself. The blue-ribbon panel suggested that they invest up to half of the taxpayers' money in the stock market. Of course, this is fine as long as you believe that the stock market is only going to go up."
Chelsie Ritchie, Iowa-Grant High School, Livingston, Wisconsin

Welfare

"The average American man …works all day long and looks forward to playing softball with his kids when he gets home around 5:30 or 6 o'clock. He then helps his wife with supper and may end up making a trip to the store for a gallon of milk and a loaf of bread. He spends his hard-earned money to buy essential items that the government has made sure he is able to get. The government makes sure this man is able to purchase these things, and for an ever-growing percentage of Americans, food stamps and welfare are paying for the essentials in their everyday life. Politicians are arguing over balancing the budget, which will reduce the convenience of welfare and food stamps and even the retirement benefits Social Security has promised."
Kristin Carnahan, Hereford High School, Hereford, Texas

"In Texas and Oklahoma, laws have done away with the actual Food Stamp. Recipients now use a Lone Star card or an Access Oklahoma card. They are modeled after a credit card. Cardholders are given a certain agreeable amount of funds that can be used for the purpose of purchasing groceries for the month."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma

"If the people use the money to help themselves get back on their feet, it is okay. If they are just on welfare because they are lazy and they do not want to work, that is where it becomes wrong."
Stacie Haden, Concordia High School, Concordia, Kansas

Stacie, above, gave the view that was represented in most student papers. But many were intolerant of fraud:
"There are some people who abuse the money given to them. For example, some claim to be single but have a husband sitting on the couch all day watching TV. Some people have more kids just to have the money."
Mandy Roberts, Paoli High School, Paoli, Oklahoma

"The government has put a limit on the period of time a person is eligible to receive government assistance. They should also assure [taxpayers] that food stamps could not be traded for money."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma

"Today, you see people driving expensive cars, living in fancy houses, dressing to kill and still able to draw welfare. Workmen's Compensation is taken advantage of, too. For example, when my father owned an oil company, a man said he hurt his wrist. After he got his workmen's compensation, he took a job as a painter. Another man was supposedly hurt so badly he could not even pick up a skillet. But after he received his workmen's compensation, he got a job as a carpenter. Just think of all of these companies that worked hard for everything they have gotten and are paying these people for fraud. Because of these two people and others, my father lost his business because his company could not afford to pay for its workmen's compensation costs."
Amanda Webster, Paoli High School, Paoli, Oklahoma

Several students championed welfare reform:
"I do like the plan President Clinton made by giving the people who are on Medicare only three years to find a job and to get off welfare. I understand the people on welfare need the money because I am on welfare and I am not ashamed of being on welfare. It is an excellent fund for people like my family and me."
Mandy Roberts, Paoli High School, Paoli, Oklahoma

"If laws were stricter about welfare, the government would be able to cut the cost of what they pay to their recipients. Any person on welfare should be able to find a job to earn some kind of money. Every town has some place of employment. At times, every one must swallow his/her pride and work somewhere that only pays minimum wage. It is not acceptable for all the people who are employed and pay their taxes to support those who won't even try."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma

"We could also lower welfare and limit the time a person can spend on it. Too much money is being put into special services and nothing is coming back."
Amanda Webster, Paoli High School, Paoli, Oklahoma

Students were outraged by the moral dilemma posed by the National Debt:
"Along with the economic problems, [there is the] moral dilemma of leaving an overwhelming debt for future generations…Governor Mike Leavitt (R) of Utah says, 'Inherited national debt is the ultimate taxation without representation.' It is shameful for lawmakers to shirk the duty that 49 states accomplish every year…American parents should feel a certain amount of guilt upon the realization that their children and grandchildren will inherit a rapidly growing debt which has already skyrocketed past the $5 trillion mark. Responsible Americans should realize that this is a pressing problem and…should do their part in working towards a solution."
Meredith Tabor, Hereford High School, Hereford, Texas

"The Congressional Budget Office projects those children born today may face tax rates as high as 82 percent if we continue to spend at today's rate."
Jill Cibolski, Concordia High School, Concordia, Kansas

"In one of the local newspapers it said, 'Chronic overspending by the federal government is fiscal child abuse…It is our children's future vs. Washington's spending addiction.' "
Laura Cook, Iowa-Grant High School, Livingston, Wisconsin

"It [the National Debt] is something we cannot just ignore or be ignorant about because it will not only affect us, but it will affect our children and grandchildren."
Jacob Letourneau, Concordia High School, Concordia, Kansas

"America's children face a future in which they will face inhuman tax rates to pay for others' past irresponsibility. The government…must make a bold and whole-hearted commitment to a balanced budget and a reduced National Debt."
Andrew Carr, Hereford High School, Hereford, Texas

"The United States is not going to be a very good place for the next generation if we do not do something about it now. It does not matter if balancing the budget requires an amendment or simply another act, just so long as something is done. It will be a long, hard struggle, but good things will come from balancing the budget."
Barbara Larsen, Concordia High School, Concordia, Kansas

"The National Debt should be attended to as soon as the lawmaking process will allow. For the sake of the future generations and the present American public, Congress should be expedient in balancing the budget."
Meredith Tabor, Hereford High School, Hereford, Texas

"The National Debt is a problem that needs to be solved so it isn't a burden on future generations."
Shannon Small, Iowa-Grant High School, Livingston, Wisconsin

Responsibility

"I believe that if every citizen takes his/her responsibility seriously, our government will be able to balance the budget within the next ten years. A lot of people like to be paid cash for their services instead of by check. This way they can avoid paying taxes to the government. This is not only cheating the government, but is also cheating the payer out of the Social Security benefits that can be received in the future. Many adults are always telling adolescents to take responsibility. Paying taxes is not only a big responsibility; it is also a law. It is a law that everyone must follow."
Misty Dawn Costanza, Paoli High School, Paoli, Oklahoma