According to the 2017 Long-Term Budget Outlook released by the Congressional Budget Office (CBO), annual federal budget deficits are on track to more than triple over the next 30 years, largely because of increased spending on Medicare and Social Security. As projected in previous years, spending growth will outpace revenue growth. However, this year’s estimate suggests a steeper climb in 30-year debt than previously expected. The CBO notes that projections assume that current laws, including the Affordable Care Act (ACA), remain in place.
The CBO predicts that budget deficits will rise from 2.9 to 9.8 percent by 2047, while the federal debt will increase from 77 to 150 percent of the country’s gross domestic product (GDP). The CBO reports that the deficit spike is largely due to increased spending on Medicare and Social Security as the country’s population ages, and as health care costs grow, along with higher interest payments on the rising debt.
Spending on major health care programs – CHIP, Medicare, Medicaid, and ACA subsidies – will rise from 5.5 percent of GDP in 2017 to 9.2 percent of GDP in 2047, and Medicare spending will make up more than half of the spending increase. CBO projects that Medicare spending will double by 2047 and will account for more than 75 percent of the spending increase for major health care programs.