Federal Government Spending: the Long-term Outlook

Medicare and Medicaid are going to eat the budget.

Chart 2.91: CBO Estimate - Federal Spending

The CBO Long-term Outlook projects the trends in the major federal spending programs, based on current program rules, and projects the likely spending out to 2084.

The outlook is fairly clear. Social Security will expand from a spending level of about 5 percent of GDP today to about 6 percent by 2050.

But Medicare and Medicaid, the two big federal health care programs, will expand from about 6 percent at present to over 12 percent of GDP by 2050.

The CBO assumes that other programs, including interest on the national debt, will decrease due to the pressure of health care spending from the current 12 percent of GDP to 7.5 percent of GDP by 2050.