Breakfast with Reporters
I was pleased to speak yesterday with a group of reporters who gather regularly at the invitation of the Christian Science Monitor. You can listen to the entire hour-long session if you’d like.
At the beginning of the meeting, I highlighted the following figure from The 2013 Long-Term Budget Outlook, which we released on Tuesday.
The projections in this figure are drawn from CBO’s extended baseline, which generally adheres closely to current law, following CBO’s 10-year baseline budget projections through 2023 and then extending the baseline concept for the rest of the long-term projection period.
Under the extended baseline, we project that federal spending for Social Security and the major health care programs (Medicare, Medicaid, the Children’s Health Insurance Program, and subsidies to be provided through health insurance exchanges) is projected to rise significantly as a percentage of GDP during the next 25 years. Meanwhile, federal spending for all other programs taken together declines sharply relative to GDP in our extended baseline. Within the next decade under current law, total federal spending apart from Social Security, the major health care programs, and interest payments would be a smaller percentage of GDP than at any time since the 1930s.
Thus, the upward pressure on federal spending relative to the size of the economy that can be seen in the figure comes not from general growth in the size of the federal government but from growth in just a handful of the largest programs along with the rising costs of servicing the government’s debt.