WASHINGTON, Jan. 25 (UPI) — Federal spending on health care-related programs exceeded the amount given to Social Security for the first time in history in 2015, the Congressional Budget Office said in a ten-year fiscal outlook Monday — which also said the federal deficit will increase in 2016 for the first time in six years, and that accompanying public debt could reach crisis-levels in the decades to come.
Money spent on health programs like Medicare, Medicaid, the Children’s Health Insurance Program and ACA subsidies amounted to $936 billion last year, the CBO’s report said — $54 billion more than Social Security received ($882B).
Spending on Social Security increased by $37 billion in 2015, an increase of 4 percent — while health spending rose 13 percent, or $105 billion, from 2014. A $48 billion hike in Medicaid spending represented the largest increase, at 16 percent.
The figures were included on page nine of the office’s budget outlook for the next decade, which was posted to the CBO website Monday.
“The sharp rise over the past two years occurred mainly because of new enrollees added by the 30 states plus the District of Columbia that had adopted the optional expansion of coverage authorized by the ACA,” the report said.
One of the main acknowledgements of the report is an expectation that the federal budget deficit will grow to $544 billion in 2016, up from $439 billion in 2015 — the first increase since the end of the financial crisis in 2009, which ushered in six consecutive years of declines.
The CBO report said, though, that the current trajectory indicates further deficit increases are coming for the next ten years, at least.
“If current laws generally remained unchanged, the deficit would grow over the next 10 years, and by 2026 it would be considerably larger than its average over the past 50 years,” it said.
“The 2016 deficit that CBO currently projects is $130 billion higher than the one that the agency projected in August 2015. That increase is largely attributable to legislation enacted since August — in particular, the retroactive extension of a number of provisions that reduce corporate and individual income taxes.”
The CBO said it expects the rising deficits to accompany a continually-improving domestic economy in the next decade — a forecast that’s largely in-step with what many fiscal analysts also predict.
“The economy will expand solidly this year and next. Increases in demand for goods and services are expected to reduce the quantity of underused labor and capital … encouraging greater participation in the labor force by reducing the unemployment rate and pushing up compensation,” the report continued. “That reduction in slack will also push up inflation and interest rates.”
The CBO report, however, warned of potentially disastrous consequences in the longer term if public debt, which typically accompanies rising deficits, balloons to expected record levels without legislative intervention by Congress.
“The projected deficits would push debt held by the public up to 86 percent of Gross Domestic Product by the end of the 10-year period, a little more than twice the average over the past five decades,” the report said. “Beyond the 10-year period, if current laws remained in place, the pressures that had contributed to rising deficits during the baseline period would accelerate and push debt up even more sharply.
“Three decades from now, for instance, debt held by the public is projected to equal 155 percent of GDP, a higher percentage than any previously recorded in the United States. Such high and rising debt would have serious negative consequences for the budget and the nation.”