LONG-RUN BUDGET PROJECTIONS OF 2006 BUDGET POLICY: 1995-2075
(Percent of GDP)
-------------------------------------------------------------
1995 2005 2015 2025 2035 2045 2055 2065 2075
-------------------------------------------------------------
Discretionary Spending Grows with GDP*:
Receipts........... 18.5 16.8 18.5 19.1 19.6 20.2 20.9 21.5 22.0
Outlays............ 20.7 20.3 19.4 21.8 24.8 27.6 30.8 35.1 40.4
Discretionary.... 7.4 7.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9
Mandatory........ 10.1 10.9 11.6 13.8 15.8 16.9 18.0 19.5 21.2
Social Security 4.5 4.2 4.4 5.4 6.0 6.0 6.1 6.2 6.4
Medicare....... 2.1 2.4 3.3 4.6 6.0 7.0 7.9 9.1 10.4
Medicaid....... 1.2 1.5 1.9 2.1 2.3 2.6 2.8 3.0 3.3
Other.......... 2.2 2.8 2.0 1.7 1.5 1.3 1.2 1.1 1.0
Net Interest..... 3.2 1.5 1.9 2.0 3.1 4.8 6.9 9.7 13.3
Surplus/Deficit (-) -2.2 -3.5 -0.9 -2.7 -5.2 -7.4 -10.0 -13.6 -18.4
Public Debt........ 49.2 38.6 35.6 38.1 58.7 90.4 130.0 181.3 249.0
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LONG-RUN BUDGET PROJECTIONS OF 2006 BUDGET POLICY: 1995-2075
(Percent of Receipts)
-------------------------------------------------------------
1995 2005 2015 2025 2035 2045 2055 2065 2075
-------------------------------------------------------------
Discretionary Spending Grows with GDP*:
Receipts........... 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0 100.0
Outlays............ 111.9 120.8 104.9 114.1 126.5 136.6 147.4 163.3 183.6
Discretionary.... 40.0 47.0 31.9 30.9 30.1 29.2 28.2 27.4 26.8
Mandatory........ 54.6 64.9 62.7 72.3 80.6 83.7 86.1 90.7 96.4
Social Security 24.3 25.0 23.8 28.3 30.6 29.7 29.2 28.8 29.1
Medicare....... 11.4 14.3 17.8 24.1 30.6 34.7 37.8 42.3 47.3
Medicaid....... 6.5 8.9 10.3 11.0 11.7 12.9 13.4 14.0 15.0
Other.......... 11.9 16.7 10.8 8.9 7.7 6.4 5.7 5.1 4.5
Net Interest..... 17.3 8.9 10.3 10.5 15.8 23.8 33.0 45.1 60.5
Surplus/Deficit (-) -11.9 -20.8 -4.9 -14.1 -26.5 -36.6 -47.8 -63.3 -83.6
Public Debt........ 265.9 229.8 192.4 199.5 299.5 447.5 622.0 843.3 1131.8
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LONG-RUN BUDGET PROJECTIONS OF 2005 BUDGET POLICY (Percent of GDP)
------------------------------------------------------
2005 2015 2025 2035 2045 2055 2065 2075
------------------------------------------------------
Receipts........... 19.4 18.3 18.8 19.3 19.8 20.3 20.9 21.4
Outlays............ 18.9 19.8 22.2 26.2 30.6 35.3 41.6 49.3
Discretionary.... 6.3 5.8 5.4 5.4 5.4 5.4 5.4 5.4
Mandatory........ 10.4 12.0 14.5 16.9 18.6 19.9 21.6 23.6
Social Security 4.2 4.6 5.5 6.1 6.3 6.4 6.6 6.7
Medicare....... 2.5 3.4 4.9 6.7 8.0 9.1 10.3 11.8
Medicaid....... 1.5 1.9 2.3 2.6 2.9 3.2 3.5 3.9
Other.......... 2.4 2.1 1.8 1.6 1.4 1.3 1.2 1.1
Net Interest..... 2.2 2.0 2.3 3.8 6.6 10.0 14.6 20.3
Surplus/Deficit (-) 0.5 -1.6 -3.4 -6.9 -10.8 -15.1 -20.8 -28.0
Public Debt........ 37.2 36.7 42.7 71.8 124.0 187.5 272.6 379.1
LONG-RUN BUDGET PROJECTIONS OF 2006 BUDGET POLICY (Percent of GDP)
------------------------------------------------------
2005 2015 2025 2035 2045 2055 2065 2075
------------------------------------------------------
Receipts........... 16.8 18.5 19.1 19.6 20.2 20.9 21.5 22.0
Outlays............ 20.3 19.4 21.8 24.8 27.6 30.8 35.1 40.4
Discretionary.... 7.9 5.9 5.9 5.9 5.9 5.9 5.9 5.9
Mandatory........ 10.9 11.6 13.8 15.8 16.9 18.0 19.5 21.2
Social Security 4.2 4.4 5.4 6.0 6.0 6.1 6.2 6.4
Medicare....... 2.4 3.3 4.6 6.0 7.0 7.9 9.1 10.4
Medicaid....... 1.5 1.9 2.1 2.3 2.6 2.8 3.0 3.3
Other.......... 2.8 2.0 1.7 1.5 1.3 1.2 1.1 1.0
Net Interest..... 1.5 1.9 2.0 3.1 4.8 6.9 9.7 13.3
Surplus/Deficit (-) -3.5 -0.9 -2.7 -5.2 -7.4 -10.0 -13.6 -18.4
Public Debt........ 38.6 35.6 38.1 58.7 90.4 130.0 181.3 249.0
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CHANGE IN LONG-RUN BUDGET PROJECTIONS FROM 2005 TO 2006 BUDGET (Percent of GDP)
------------------------------------------------------
2005 2015 2025 2035 2045 2055 2065 2075
------------------------------------------------------
Receipts........... -2.6 0.3 0.3 0.4 0.4 0.6 0.6 0.6
Outlays............ 1.4 -0.4 -0.4 -1.3 -3.0 -4.5 -6.5 -8.9
Discretionary.... 1.7 0.1 0.5 0.5 0.5 0.5 0.5 0.5
Mandatory........ 0.5 -0.4 -0.6 -1.1 -1.7 -1.9 -2.1 -2.4
Social Security 0.0 -0.2 -0.1 -0.1 -0.3 -0.3 -0.4 -0.3
Medicare....... -0.1 -0.1 -0.3 -0.7 -1.0 -1.2 -1.2 -1.4
Medicaid....... 0.1 0.0 -0.1 -0.3 -0.3 -0.4 -0.5 -0.6
Other.......... 0.5 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1 -0.1
Net Interest..... -0.7 -0.1 -0.3 -0.7 -1.8 -3.1 -4.9 -7.0
Surplus/Deficit (-) -4.0 0.6 0.7 1.6 3.4 5.1 7.2 9.6
Public Debt........ 1.4 -1.0 -4.5 -13.0 -33.6 -57.5 -91.3 -130.1
PERCENT CHANGE IN LONG-RUN BUDGET PROJECTIONS FROM 2005 TO 2006 BUDGET^
------------------------------------------------------
2005 2015 2025 2035 2045 2055 2065 2075
------------------------------------------------------
Receipts........... -13.4 1.4 1.6 1.8 2.1 2.8 3.1 3.0
Outlays............ 7.7 -2.0 -1.8 -5.2 -9.7 -12.8 -15.6 -18.1
Discretionary.... 26.4 1.7 9.3 9.3 9.3 9.3 9.3 9.3
Mandatory........ 4.8 -3.3 -4.5 -6.5 -9.0 -9.7 -9.7 -10.2
Social Security 0.0 -4.3 -1.8 -1.6 -4.4 -5.1 -5.7 -4.8
Medicare....... -2.0 -2.9 -6.1 -9.8 -11.9 -12.7 -11.9 -11.7
Medicaid....... 3.4 0.0 -6.7 -9.8 -8.8 -11.1 -14.3 -15.4
Other.......... 19.1 -4.8 -5.6 -6.3 -8.8 -5.9 -6.4 -11.1
Net Interest..... -31.8 -2.6 -11.1 -18.4 -27.3 -31.0 -33.4 -34.6
Surplus/Deficit (-) -800.0 -41.9 -19.4 -24.1 -31.6 -33.7 -34.6 -34.3
Public Debt........ 3.8 -2.9 -10.7 -18.2 -27.1 -30.7 -33.5 -34.3
* Discretionary Spending is projected to shrink from 7.9% of GDP in 2005
to 5.9% of GDP by 2015, then grow with GDP
^ percent change equals 100 * (old_value - new_value) / old_value
Source: Budget of the United States Government, FY 2006,
Analytical Perspectives, page 209, Table 13-2;
Budget of the United States Government, FY 2005,
Analytical Perspectives, page 191, Table 12-2;
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The above graphs and tables make evident the following points:
1) The public debt is projected to drop to 35.6% of GDP by 2015. It is
then projected to climb, reaching 249% of gDP by 2075.
2) In 2004, receipts were 16.3% of GDP, their lowest relative level since
1959. They are projected to rise to 22% of GDP by 2075. This will be
their highest level since at least 1940, surpassing their prior high of
20.9% of GDP reached in 1944 and 2000. The Analytical Perspective
states: "This increase reflects the higher marginal tax rates that
people will face as their real incomes rise in the future (the tax
code is indexed for inflation, but not for real economic growth)."
3) Outlays are projected to drop to 19.4% of GDP by 2015. They are then
projected to rise to 40.4% of GDP by 2075. Of this 21% of GDP increase,
11.4% is Net Interest, 7.1% is Medicare, 2.0% is Social Security, and
1.4% is Medicaid. As a percentage of GDP, there is projected to be no
change in discretionary spending and a drop of 1.0% of GDP in other
mandatory spending.
4) By 2075, the deficit is projected to rise to 18.4% of GDP and, as a
result, the public debt is projected to rise to 249% of GDP. However,
these figures are significantly less than last year's projections of
28.0 and 379.1 percent of GDP, respectively.
5) Of the 9.6% of GDP decrease in the projected 2075 deficit, the great
majority (8.9% of GDP) is due to a decrease in projected outlays.
Of this 8.9% of GDP decrease, 7.0% is Net Interest, 1.4% is Medicare,
0.6% is Medicaid, 0.3% is Social Security, and 0.1% is Other Mandatory
Spending. These decreases add up to 9.4% of GDP and are offset by a
0.5% of GDP increase in discretionary spending.
6) The projections of Medicare outlays are much lower than the 2003
Trustees Report on which they are based and are a fair amount lower
than the previous budget's projections. In 2075, the differences
are 2.94 and 1.38 percent of GDP, respectively. More information on
this difference can be found at promed.html.
