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Escaping the Cliff: In Search of Real Budget Heroes

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Congress is heading home for the holiday break, having made no progress on avoiding the looming fiscal cliff. As family and friends gather, the nation's future is sure to be a topic of conversation. We all know we need to make thorny decisions about taxes and spending and chart a long-term course for popular programs like Social Security and Medicare. But are our politicians, especially members of Congress, up to the job?

We're reaching a collision of epic proportions, between lawmakers' short-term jockeying and the nation's need for long-term fiscal sanity. But amid the battles, there's real hope -- citizens have shown an instinct for making the genuinely hard choices that can help us avoid the cliff.

We've been able to gauge citizens' instincts for lasting solutions through a novel tool: an online video game called Budget Hero. Developed by the Woodrow Wilson International Center for Scholars and American Public Media, Budget Hero uses the model and many of the assumptions of the Congressional Budget Office, Congress' own research arm on budget matters. The game lets players examine the policy choices facing lawmakers, make decisions about spending and revenues using real (and nonpartisan) numbers, and explore the resulting trade-offs.

More than one million people have played the game since 2008, including high schoolers in Washington, D.C., students at the University of Maryland and Ohio University, and growing legions of "grey gamers." We have learned that Budget Hero players see the choices facing Congress as the complex policy decisions that they are. But we've also learned that the players are willing to make the difficult choices. In case after case, players have stepped up and have made the tough calls needed to balance the budget going forward. They've shown it can be done.

Analysis of the data, however, also provides telling evidence of where the deep fault lines in this debate really lie. Consider the Bush tax cuts, a key boulder on the fiscal cliff. These tax breaks--enacted in 2001 and 2003, renewed in 2010 -- provide lower marginal tax rates for almost all U.S. taxpayers. Just like our lawmakers, Budget Hero players could choose to extend the Bush tax cuts for all but the wealthy or keep all tax breaks.

And what did our players decide? Perhaps surprisingly, income did not affect whether players kept the tax cuts for all, or maintained them only for only those making more than $250,000 a year. Neither was there a gender gap in playing the Bush tax cut card.

Party politics, however, did matter. Self-described Democrats and Greens were 53 percent more likely than Republicans and Libertarians to exclude the wealthy from the tax break. And players living in red states were 21 percent less likely than people in blue states to favor ending the Bush-era tax cuts for the wealthy.

At the same time, Democrats and Greens were 80 percent less likely than Republicans and Libertarians to extend the tax breaks across the board. Independents were also 65 percent less likely than Republicans and Libertarians to keep the cuts for everyone. The difference boils down to players' attitude to a progressive tax system: whether to treat everyone the same or tax wealthier individuals at a higher rate.

We found a second major fault line: The older the gamer, the more likely the player was to favor eliminating the Bush-era tax cuts for top earners. Players aged 18-44 were 20 percent more likely to favor eliminating the tax cuts than those 18 years old or younger. Players aged 65 or older were a whopping 117 percent more likely to want to eliminate the tax cuts than those under 18.

Players of Budget Hero also tackled big-ticket tax breaks, like the deduction for home mortgage interest. Who favored this step? Men were 90 percent more likely to endorse this move than women. And during the home stretch of the election, from September to November, this deficit-cutting option was the fourth most popular one chosen by residents of swing states, like Florida, Ohio, and Colorado.

Players of Budget Hero are lucky, of course. They get to make these policy decisions in a digital world free of procedural landmines and the need to get reelected. Yet the game forces them to see "how everything is interconnected and you cannot just change one thing to fix the budget," as a woman in Minnesota told us. "There needs to be overall reform on both the revenue and expenditure sides of the equation." A balanced budget, she concluded, requires a balanced approach.

And, perhaps most important, our players in the end decided it was more important to make the big decisions for economic health than to circle the wagons around their favorite bits of the budget and tax code. Amid the unbearably nasty battles on Capitol Hill, that's a bit of refreshingly good news.

Now if only our leaders in Washington would bring themselves not just to see -- but to do -- the same.