Two main factors are responsible for projected long-term growth in the federal budget: healthcare programs and interest payments. Federal healthcare spending is projected to almost double as a percent of GDP by 2040. The sharp rise in interest costs is a result of the continued accumulation of government debt, exacerbated by the rise in interest rates from their unusually low levels as the economy strengthens. On the other hand, with statutory limits on annually-appropriated spending in place through 2021, all other spending is projected to decrease as a percentage of GDP through the end of this decade before increasing to its average historical level for the long-term.
Major Drivers: Health Care Costs and Aging
Interest Costs and Revenues Comparison
Federal Deficits and Surpluses, 1800 to Present
Stabilizing the Debt Will Not Be Easy: The Size of the Problem
The Size of Tax Expenditures
Peter G. Peterson Foundation Chart Pack:
The PGPF chart pack illustrates that budget-making involves many competing priorities, limited resources, and complex issues. In this set of charts, we aim to frame the financial condition and fiscal outlook of the U.S. government within a broad economic, political, and demographic context.
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