You too can play the budget game - federal budget balancing computer game, Hard Choices

Nation's Business, Feb, 1989 by Albert G. Holzinger

You Too Can Play The Budget Game Phoey to all you who have told the National Economic Commission that the federal budget can't possibly be balanced anytime soon unless President Bush agrees to increase taxes. It can be balanced. I know. I was able to do it.

Soon after Congress and former President Reagan created the NEC to recommend ways to eliminate the deficit while maintaining economic growth, the commission invented a computer game, which it named Hard Choices. The game is based on a model of the federal budget, and its object is to eliminate the deficit by 1994 solely by restraining spending.

For each of the 18 budget categories, which range from national defense and international affairs to veterans' benefits and agriculture, players are given the Congressional Budget Office's baseline spending estimates for fiscal years 1989 to 1994. These are estimates of the amounts Congress would have to appropriate for those categories in those years to fulfill requirements of current policies and statutes.

Under the rules of the game, players can curtail any estimated spending in any years with two exceptions--payments for Social Security and interest on the national debt. Players also cannot challenge the CBO's assumption of an annual economic growth of only 2.4 percent during 1989-94. The growth-rate assumption is vital because of its impact on revenues and spending.

The commission invited official Washington and the news media to play its game, and then shook its head knowingly when nobody could "win" without making politically unfeasible spending reductions. The game demonstrates why taxes will have to be raised, commission cochairmen Robert Strauss and Drew Lewis said.

Not so, said the National Chamber Foundation, the research and education arm of the U.S. Chamber of Commerce. The foundation, believing the game was rigged, produced a variation of its own, called the Fair Freeze Simulation. The principal difference between the two is that, in the foundation's game, players can see the effects of different economic-growth assumptions and choose the one they believe is most realistic.

When I played the foundation's game, I chose a growth rate of 2.9 percent. This is about midway between the pessimistic CBO assumption and the average growth rate of the past 40 years, which is 3.3 percent.

I'm not going to tell you precisely how I produced a $21 billion surplus in 1994, just in case you want to play the NCF game yourself. Rest assured, however, that I provided programs such as Medicare and Medicaid with hefty increases, because their costs have been rising much faster in recent years than inflation and because Congress is unlikely to bring them down sharply in the near future.

If you want to try your hand at balancing the budget, the foundation will send you its game for $20. The game is available on 3-1/2-inch or 5-1/4-inch diskettes. It works with an IBM or IBM-compatible computer with 640 kilobytes or more of memory and a Lotus 1-2-3 spreadsheet program version 2.0 or 2.01. Write to Yvone Beeler, National Chamber Foundation, 1615 H Street, N.W., Washington, D.C. 20062, or call (202) 463-5552.