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The Long-Term Budget Outlook |
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December 2003 |
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Artville/GettyImages |
Notes
Numbers in the text and tables of this report may not add up to totals
because of rounding.
Supplemental data are available in Excel for projected long-term spending and revenues, year by year, under the six long-term budget scenarios described in this report, as well as for the economic factors underlying the scenarios.
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This Congressional Budget Office (CBO) report
extends previous long-term analyses by CBO, examining pressures on the
federal budget over the coming decades and the kinds of policy choices
that lawmakers face as they consider ways to alleviate those pressures.
If current policies continue, rapidly rising health care costs and an aging
population will sharply increase federal spending for entitlement programs,
such as Social Security, Medicare, and Medicaid. This report presents illustrative
scenarios for federal spending and revenues through 2050 and describes
the implications of those scenarios for the economy. In accordance with
CBO's mandate to provide objective and impartial analysis, this document
contains no recommendations.
Paul Cullinan coordinated the report and wrote major sections, as did
Douglas Hamilton, Noah Meyerson, David Torregrosa, David Weiner, and Thomas
Woodward. Shinichi Nishiyama, Michael Simpson, and David Weiner provided
the simulations, and Tom Bradley, Michael Carson, Robert Dennis, Jeanne
De Sa, Lyle Nelson, Eric Rollins, and Julie Topoleski made valuable contributions
to the analysis. Many others at CBO provided helpful comments and assistance.
Christian Spoor, Leah Mazade, and John Skeen edited the manuscript,
and Christine Bogusz proofread it. Rae Wiseman prepared drafts of the chapters.
Christian Spoor and Sharon Corbin-Jallow prepared the report for publication,
and Maureen Costantino produced the cover. Lenny Skutnik printed the initial
copies of the report, and Annette Kalicki prepared the electronic versions
for CBO's Web site.
Douglas Holtz-Eakin
Director
December 2003
Tables |
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1-1. |
Alternative Long-Term Paths for Primary Spending |
1-2. |
Projected Long-Term Spending Under Various Scenarios |
2-1. |
The Increase in the Normal Retirement Age Under Current Law and an
Illustrative Option |
3-1. |
Medicare Spending by Type of Service, Fiscal Year 2003 |
3-2. |
Distribution of Medicaid Enrollees and Benefit Payments by Eligibility
Category, 2000 |
A-1. |
Assumptions Underlying CBO's Long-Term Budget Scenarios |
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Figures |
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1-1. |
Total Federal Spending and Revenues Under Six Long-Term Budget Scenarios |
1-2. |
Federal Debt Held by the Public Under CBO's Long-Term Budget Scenarios |
1-3. |
Federal Debt as a Percentage of GDP, 1790-2002 |
2-1. |
Spending for Social Security |
2-2. |
The Population Age 65 or Older as a Percentage of the Population Ages
20 to 64 |
2-3. |
Federal Spending Under Illustrative Options for Slowing the Growth
of Social Security |
3-1. |
Total Federal Spending for Medicare and Medicaid Under Different Assumptions About Excess Cost Growth |
3-2. |
Sources of Medicare Cost Growth |
4-1. |
Discretionary Spending |
4-2. |
Mandatory Spending Other Than for Social Security, Medicare, and Medicaid |
5-1. |
Sources of Federal Revenues over the Past 50 Years |
5-2. |
Total Federal Revenues Under Alternative Paths, 2003 to 2050 |
5-3. |
Individual Income Tax Liabilities Under Current Law or with a Permanent
Extension of EGTRRA and JGTRRA, 2003 to 2050 |
5-4. |
Individual Income Tax Liabilities Under Current Law or with the AMT
Modified, 2003 to 2050 |
5-5. |
Individual Income Tax Liabilities Under Three Policy Alternatives,
2003-2050 |
5-6. |
The AMT's Impact on Individual Income Tax Liabilities Under Current
Law, 2003 to 2050 |
5-7. |
Individual Income Taxes and Payroll Taxes Under the Current-Law and
Historical-Average Scenarios, 2003-2050 |
A-1. |
Social Security Spending Under CBO's Long-Term Budget Scenarios |
A-2. |
Medicare Spending Under CBO's Long-Term Budget Scenarios |
A-3. |
Federal Medicaid Spending Under CBO's Long-Term Budget Scenarios |
A-4. |
Defense Spending Under CBO's Long-Term Budget Scenarios |
A-5. |
Other Federal Spending Under CBO's Long-Term Budget Scenarios |
A-6. |
Federal Interest Spending Under CBO's Long-Term Budget Scenarios |
A-7. |
Personal Tax Revenues Under CBO's Long-Term Budget Scenarios |
A-8. |
Real Gross Domestic Product Under CBO's Long-Term Budget Scenarios |
A-9. |
Total Surplus or Deficit Under CBO's Long-Term Budget Scenarios |
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Boxes |
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1-1. |
Why Is Federal Debt Held by the Public Important? |
1-2. |
The Growth of Health Care Costs |
1-3. |
Other Measures of Fiscal Pressures |
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