November 5, 2012

Long-Term Spending Explosion Driven by Entitlements

Contact us
To speak with a scholar or learn more on this topic, visit our contact page.

This chart illustrates the Congressional Budget Office’s (CBO’s) long-term spending projections. Colored segments represent the relative contributions of Medicare and Medicaid, Social Security, and other spending to the overall composition of long-term federal outlays. According to this data, projected over the next 50 years, entitlement spending will grow at 1.4 percent annually, twice the historical rate of growth in government spending.

Automatic spending programs like Social Security and Medicare must be reformed. If they aren’t, the country will be locked into an unsustainable transfer of wealth from the relatively young and poor to the relatively old and wealthy.

Data note: The data represent total primary spending (that is, federal spending without interest payments on debt). The Medicare and Medicaid portions account for outlays from Medicare and net Medicaid, which includes CHIP and other health-insurance subsidies provided through the exchanges established by the Affordable Care Act. This categorization method follows the CBO’s.