The Long Term Budget Outlook is Worse than You Think; ObamaCare is Part of the Reason

[U[nder CBO’s base-case scenario ― called the “extended baseline scenario” ― annual budget deficits never fall below 3 percent of GDP after 2019 and federal debt held by the public (which excludes federal debt held by federal trust funds) would reach 100 percent of GDP by 2038.

CBO expects thbudget-deficit-cartoonat 54 percent of the federal spending increase on the major entitlements over the next twenty-five years will be attributable to the aging of the U.S. population. Twenty-eight percent of the increase will be due to “excess cost growth” in health care ― meaning cost escalation per capita in excess of GDP growth per capita. The rest of the spending increase is due to the expansion of Medicaid and the new premium credits enacted in the PPACA. When looking at just the health care entitlements, 40 percent of the federal spending increase is due to excess cost growth, 35 percent from population aging, and 26 percent from the PPACA program expansions.

Jim Capretta at Health Affairs.

Comments (11)

Trackback URL | Comments RSS Feed

  1. Perry says:

    So when are they going to admit this is a bad idea all the way around?

  2. Ruth says:

    I feel sorry for the future generations of America.. Something needs to change

  3. Marcus says:

    “…federal debt held by the public (which excludes federal debt held by federal trust funds) would reach 100 percent of GDP by 2038…”

    NCPA, by 2030 please create a “Why Not Move” calculator that includes other countries!

  4. Crawford says:

    I don’t think we will have to worry about these long term predictions. I’m thinking that the ACA will be a bust within the next 30 months. We will have something else in place by 2017. Let’s hope so at least.

  5. Scott says:

    “CBO assumes that spending on domestic appropriated accounts of the federal budget will fall to 7.1 percent of GDP in 2038, a nearly 30 percent drop.”

    Really? How did they come to that conclusion?

    • Brittany W. says:

      Here:

      “This projection assumes that the sequester mechanism enacted in the 2011 Budget Control Act will continue to cut spending in this part of the budget over the next eight fiscal years.”

      Maybe in a perfect world, but I don’t see this happening.