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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 2015 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 22, 2015.

The 2015 trustees report shows that Medicare cost in 2014 about 1.52 percent of GDP for the Part A Hospital Insurance, 1.54 percent of GDP for the Part B Supplementary Medical Insurance and 0.48 percent of GDP for the Part D drug benefit.

Over the last couple of years Medicare costs have remained steady at about 3.54 percent of GDP. But then costs are expected to increase, breaching 4 percent of GDP by 2023 and 5 percent of GDP by 2030. By the 2190s Medicare is expected to cost about 6 percent of GDP.

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 22, 2015.

The 2015 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 4.98 percent of GDP between them in 2015. The OASI program cost 4.16 percent of GDP and the DI program cost 0.82 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 3.34 percent of GDP in 2005 to 4.06 percent of GDP in 2014; DI has gone from 0.66 percent 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 2035 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 5.1 percent of GDP in 2030 and peaking at 5.28 percent of GDP in 2040. 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.

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

> State GDP CY14

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Data Source

Source: CBO Long-Term Budget Outlook .

> data sources for other years
> data update schedule.

Gross State Product Update for 2015

The US Bureau of Economic Analysis (BEA) released its Gross State Product (GSP) data for 2015 on June 14, 2016.

Usgovernmentspending.com has updated its individual state GSPs for 2015 and projected nominal and real GSP through 2020 for each state using the projected national GDP numbers from Table 10.1 in the Historical Tables for the Federal FY2016 Budget and the historical GDP data series from the BEA as a baseline.

As before we have projected individual state GSPs out to 2021 by applying a factor to reflect each state's deviation from the national growth rate. (E.g. In 2014 the national real GDP expanded by 2.4 percent. But North Dakota grew by 6.3 percent, a deviation of nearly 4 percent. The deviation is reduced by 40 percent for each year after 2014, making the assumption that each state will slowly revert to the national norm.)

Usgovernmentspending.com displays individual state data going back to 1957, but BEA has nominal GSP data going back to only 1963, and real GSP data going back to 1987.  Also the 1987-1997 real GSP data is in 1997 dollars, not 2009 dollars like the 1997-present data, and the pre-1997 data is based on a different model than post 1997 data.  For the pre-1997 data we have factored it to remove any "bumps" over the 1997 transition.

Because usgovernmentspending.com needs GSP data to provide e.g., spending as a percent of GDP, we have extended the two BEA GSP data series back to 1957.  We have assumed that the rate of change of GSP prior to 1963 is the same as the national GDP and we have assumed that the rate of change of real GSP prior to 1987 is the same as the nation real GDP growth rate.

Click here to view a complete list of US states and their 2015 GSP growth rates.

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