The nonpartisan Congressional Budget Office released its annual long-term budget outlook Tuesday. The news is not good.
Here are four graphs that show just how doomed the federal budget is if Congress and the president don’t do anything about it.
Record-High Debt
Twenty years from now, federal debt held by the public will reach 141 percent of gross domestic product. For comparison, even after the government went on a spending spree at the end of World War II, by the end of the war, federal debt held by the public was only about 112 percent of GDP.
Huge Deficits
It’s no surprise that one of the worst federal budget deficits in recent history came in 2009, when the budget deficit equalled 10 percent of GDP. It has since recovered to just 3 percent of GDP; not ideal, but better than during the Great Recession. But if the federal deficit is left untouched, the deficit will worsen to 9 percent.
Lots of Spending
In the past 50 years, the federal government hasn’t gotten anywhere close to spending 28 percent of GDP. The highest point since then was 2009, when spending was up, the economy was down and federal spending was at 24 percent of GDP.
But by 2046, spending will rise to 28 percent of GDP. Social Security and Medicare each take up a fifth of that spending, as does the federal government’s net interest payments on its growing debt.
Why is This Happening?
The CBO explained growing deficits by pointing out specific spending increases. “Spending grows for Social Security, the major healthcare programs (primarily Medicare) and interest on the government’s debt,” the report says. This isn’t because of any recent legislative changes, but because Americans are growing older.
“As members of the baby-boom generation age and as life expectancy continues to increase, the percentage of the population age 65 or older is anticipated to grow sharply, boosting the number of beneficiaries of those programs.”
While spending on Social Security will tick up in the next 20 years, spending on Medicare will nearly double, while spending on net interest payments will quadruple.
Jason Russell is a commentary writer for the Washington Examiner.
