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Forecasts of Future Spending



Several government agencies publish regular forecasts of future government spending, including the Congressional Budget Office and the Medicare and Social Security Trustees.

CBO: Long-term Outlook for Federal Spending

Health care costs will increase from 6 percent to 13 percent of GDP

Chart 2.91: CBO Estimate - Federal Spending

The Congressional Budget Office Long-term Budget Outlook released in July 2014 projects the trends in the major federal spending programs, based on current program rules, and projects the likely spending out to 2088.

The outlook is fairly clear. Social Security will expand from a spending level of 5 percent of GDP today to about 6 percent by 2028.

But Medicare and Medicaid, the two big federal health care programs, will expand from 5 percent at present to breach 10 percent of GDP by 2053.

The CBO assumes that other programs, except interest on the national debt, will decrease due to the pressure of health care spending from the current 9.4 percent of GDP to 6.5 percent of GDP by 2050. Interest expense will increase from 1.3 percent of GDP to 5.6 percent of GDP by 2050.

Medicare Trustees Report

Medicare will cost about 6 percent of GDP by the middle of the 21st century.

Chart 2.92: Medicare Trustees Report

Every year the Center for Medicare & Medicaid Services publishes a Medicare Trustees Report. The latest report was published on July 28, 2014.

The 2014 trustees report shows that Medicare cost in 2013 about 1.56 percent of GDP for the Part A Hospital Insurance, 1.47 percent of GDP for the Part B Supplementary Medical Insurance and 0.44 percent of GDP for the Part D drug benefit.

Over the last couple of years Medicare costs have declined as a percent of GDP and are expected to bottom out at 3.36 percent of GDP in FY 2015. But then costs are expected to increase, breaching 4 percent of GDP by 2023 and 5 percent of GDP by 2031. Medicare is expected to cost over 6 percent of GDP by 2053. By 2088 Medicare is expected to cost nearly 7 percent of GDP each year.

Social Security OASDI Trustees Report

Social Security will cost over 6 percent of GDP by 2030.

Chart 2.93: OASDI Trustees Report

Every year the Social Security Administration publishes an OASDI Trustees Report. The latest report was published on July 28, 2014.

The 2014 trustees report shows that Social Security’s two main programs, the Old Age and Survivor Insurance (OASI) program and the Disability Insurance (DI) program cost 4.9 percent of GDP between them in 2013. The OASI program cost 4.04 percent of GDP and the DI program cost 0.85 percent of GDP.

Over the years since the Crash of 2008 Social Security costs have increased sharply as a percent of GDP. OASI has gone from 3.38 percent of GDP in 2005 to 4.08 percent of GDP in 2014; DI has gone from 0.67 perent of GDP in 2005 to a peak of 0.86 percent of GDP in 2012.

In the medium term Social Security costs are forecast to increase to 6 percent of GDP by 2030 and peak at nearly 6.2 percent of GDP by 2035. But then it will start to decline down to just below 6 percent of GDP by 2050. OASI will be the main driver, hitting 5 percent of GDP in 2027 and peaking at 5.41 percent of GDP in 2035. DI costs are expected to decline slowly from 0.84 percent of GDP in 2014 to 0.75 percent of GDP in the mid 2030s.

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Spending Data Sources

Spending data is from official government sources.
  Federal data since 1962 comes from the president’s budget.
  All other spending data comes from the US Census Bureau.

Gross Domestic Product data comes from US Bureau of Economic Analysis and measuringworth.com.

Detailed table of spending data sources here.

Federal spending data begins in 1792.

State and local spending data begins in 1890.

State and local spending data for individual states begins in 1957.

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Next Data Update

> US, State Pop FY14

> data update schedule.

Data Source

Source: CBO Long-Term Budget Outlook .

> data sources for other years
> data update schedule.

State and Local Finances Update for FY 2012

On December 11, 2014 usgovernmentspending.com updated the state and local spending and revenue for FY 2012 using the newly released Census Bureau State and Local Government Finances for FY 2012.  This includes state and local spending for the United States as a whole and individual states and the District of Columbia.

State and local spending and revenue for FY2012 are now actual historical spending as reported by the Census Bureau.  Previously state spending and revenue for FY2012 was actual and local spending and revenue was estimated.  The following table shows the difference between estimated and actual spending and revenue for FY2012:

FY 2012Estimated
$ billion
Actual
$ billion
Spending$1,657$1,647
Revenue$1,038$1,075

We have updated the "guesstimated" state and local finances for FY2013-19.

Also updated were state and local finances for 2009, 2010, and 2011 using newly released Census Bureau revised data.

Spend links

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