WASHINGTON POST COLUMN: A recent Congressional Budget Office report, “The 2015 Long-Term Budget Outlook,” reminds us that the federal government is slowly becoming an agency for taking care of the elderly. Almost everything else is being crowded out. We ignored that during the Obama presidency, and now it seems that the fledgling presidential campaign may do likewise. Hillary Clinton and other Democrats plug fairer economic growth. Jeb Bush and other Republicans are more forthcoming (they talk about raising Social Security’s eligibility age) but concentrate their rhetoric on creating faster economic growth…
In 1990, federal spending equaled about 21 percent of the economy, gross domestic product (GDP). Social Security and major health programs (mainly Medicare and Medicaid) represented a little less than one-third of all spending. The rest was defense, domestic “discretionary” programs (homeland security, environment regulation, law enforcement and the like) and non-elderly “entitlements” (unemployment insurance, welfare). In 2015, the federal government is still spending 21 percent of GDP, but now Social Security and major health programs consume about half the budget, according to the CBO report. Most health spending goes to the elderly.
As the CBO makes clear, an aging population and high health costs will perpetuate this trend for years. Under current law, Social Security and health programs will account for two-thirds of today’s budget levels (measured by GDP) by 2040, estimates the CBO. What’s left for the rest? Not much. The remaining amounts are “the lowest . . . relative to the size of the economy since the 1930s,” says the CBO. Either the rest of government will shrink dramatically, or Congress will expand government spending sharply. The latter, of course, would require higher taxes or bigger deficits… (more)
