CBO: Ballooning Health Care Costs Will Continue As A Key Driver In Nation’s Debt
A new Congressional Budget Office report offers a bleak view of the future if current tax and spending policies are not adjusted.
The Washington Post: CBO: Taxmageddon Would Bring Tax Pain But Debt Relief
And the choices would not be easy. So far, lawmakers have focused their deficit-reduction efforts on a relatively abstract portion of the budget known as discretionary spending. But future spending growth is driven almost entirely by popular entitlement programs for the elderly, the CBO said, whose numbers are soaring as the baby-boom generation ages. The graying of America will push federal spending on programs such as Medicare and Social Security to more than 16 percent of the economy over the next 25 years, the CBO said. By comparison, total federal spending has averaged 18.5 percent of GDP over the past 40 years. Without significant changes to federal health and retirement programs, taxes will have to rise to historically high levels or the nation will sink inevitably into the red (Montgomery, 6/5).
Los Angeles Times: Rising U.S. Debt Could Trigger A Downturn, Agency Warns
Amid election year barbs over taxes and spending comes a jolt: A new report says that a U.S. debt crisis could hit soon and imperil the economy if Washington fails to staunch the red ink. … The bleak fiscal outlook throws into stark terms the politically difficult choices facing lawmakers and the next president: Allowing the debt level to continue unchecked would lower the nation's economic output and increase the possibility of a fiscal crisis in the years to come, the budget office warned. But taking sudden action to ease the debt load — by imposing new taxes or making deep cuts in federal spending or both — could slam the brakes on economic growth, pitching the nation into a recession in the first half 2013 (Mascaro, 6/6).
CQ HealthBeat: CBO: Health Care Will Eat Up An Increasing Share Of GDP
The aging population and high cost of health care will result in federal health care spending almost doubling its share of the economy by 2037 if current policies remain in place, according to the Congressional Budget Office. In its annual long-term budget outlook, the CBO said that the debt held by the public will increase sharply if current policies are extended. It also found that federal health care spending will take up more and more of the gross domestic product (GDP). In addition, per-capita spending for health care will likely continue to grow faster than such spending on other goods and services (Ethridge, 6/5).
Reuters: Unchanged Tax, Health Policies To Balloon US Debt-CBO
U.S. public debt would balloon to twice the size of its economy in 25 years if current tax and spending policies are extended, Congress' budget referee said on Tuesday, delivering fresh fodder for a year-end budget brawl. … The CBO report finds, as it has in past years, that the biggest source of growth in federal spending will come from [Medicare and Medicaid]. By 2037, if no health care changes are enacted, federal health care spending would double to around 10 percent of gross domestic product compared to around 5 percent in 2010, it said (Lawder, 6/5).
Modern Healthcare: Healthcare Likely To Be Major Budget Buster: CBO
Likely future healthcare spending is a primary federal budget buster under projections released Tuesday by the Congressional Budget Office. The annual CBO projections concluded that federal debt would fall to 61% of the nation's economy in 10 years from 73% now, if current law is unchanged. However, the government's debt is more likely to accelerate to 93% of the entire economy within 10 years under an "alternative fiscal scenario" that used projections based on more likely actions by federal representatives, including key healthcare policy changes (Daly, 6/5).