Composition of Projected FY 2010 Federal Government

Revenues and Outlays

(Deficit: $1.35 Trillion)

$3,600
Interest $207

$3,000 Domestic* $682

Estate & Gift Taxes

$2,400 ($21 billion)
Defense $690
$188 Other Taxes
Other $147 Corporate Taxes
$1,800
$515
Entitlements Social
$878 Insurance
$1,200 Medicare Taxes
$730
& Medicaid

$600 Individual
Social $946 Income
$700
Security Taxes
$0
Outlays: $3.52 trillion Revenue: $2.18 trillion
*Includes all appropriated domestic spending such as education, transportation, homeland security, housing
assistance, and foreign aid.
Source: CBO January 2010.
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 Mandatory spending is consuming a
growing share of the budget

1970 1990 2010

62% 31% 40% 45% 39% 55%

7%
15% 6%

Mandatory Net Interest Discretionary

Source: Congressional Budget Office, January 2010.

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 Social Security, Medicare, & Medicaid as a
Percentage of the Federal Budget

All other Federal Social Security,

Spending Medicare and Medicaid
$2.09 Trillion $1.43 Trillion

59% 41%

Source: Congressional Budget Office, January 2010.

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 Outlays of Select Mandatory Spending Programs
(FY 2010 Projected)
$750 $700

$600
In Billions of Dollars

$450
$450

$300 $280

$141 $133
$150
$72 $70
$28 $17
$0
Social Medicare Medicaid Federal Unemploy- Earned Food Stamps Family Child
Security Retirement ment Comp. Income & Support Nutrition
& Disability Child Tax
Credits

Source: Congressional Budget Office, January 2010.

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 Defense Discretionary Spending as a
Percentage of GDP
10.0

9.0

8.0
As a Percentage of GDP

7.0

6.0

5.0

4.0

3.0

2.0
1965 1968 1971 1974 1977 1980 1983 1986 1989 1992 1995 1998 2001 2004 2007 2010

Source: Congressional Budget Office, January 2010.

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 Outlays of Select Non-Defense Discretionary Programs
(FY 2010 Projected)

$100
$89 $90
$90

$80

$70 $66
Billions of Dollars

$60
$53 $53
$50

$40 $36
$31
$30
$19
$20

$10

$0
Education Transportation Housing, Natural Veterans Foreign Aid General Science,
Energy & Resources Government Space &
Nutrition Asst. Technology
*includes ground, air, and water
Source: Congressional Budget Office, January 2010.
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 Federal Spending vs. Revenues as a
Percent of GDP (FY 1980-2010)
26%

24%
Average outlays: 20.9%

22%
Percentage of GDP

20%

18%

Average revenues: 18.3%

16%

14%
1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004 2006 2008 2010
Total Outlays Revenues

Source: Congressional Budget Office, January 2010.

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 Current Policy Trends Lead to Large Sustained Deficits
Fiscal Years 2011-2020
$500

$0
-$6.0 Trillion Deficit
-$500
Billions of Dollars

-$1,000

-$1,500

-$14.6 Trillion Deficit

-$2,000

-$2,500
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
Fiscal Year
CBO March 2010 Baseline
The Concord Coalition Plausible Baseline adds in the effects of the new Health Care Reform law
and assumes that discretionary spending grows at the rate of nominal GDP, that war costs slow
gradually, that Medicare physician payment cuts are postponed, and that all expiring tax
provisions (including those from the 2009 stimulus package) are extended with AMT relief.
Source: Congressional Budget Office, March 2010 and Concord Coalition analysis.
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 Debt Held by the Public as a Percent of GDP
1940-2040
120
World War II
108.6%
100
As a Percentage of GDP

80
2009
53.8%
60

40

20

Source: OMB Historical Tables 2009.

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 Percent of Debt Held by the Public
Owned by Foreigners
(1987-2009)
60%

50%

40%

30%

20%

10%

0%
1987 1990 1993 1996 1999 2002 2005 2008

Source: United States Treasury Department, Treasury Bulletin, December 2009.

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 Interest Costs Go Through The Roof

$900

$800
Billions of Dollars

$700

$600

$500

$400

$300

$200

$100

$0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020

CBO Jan. 2010 Baseline President's Budget Proposal

Source: Congressional Budget Office, Jan. 2010 and Office of Management and Budget, Feb. 2010.
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 Factors Explaining Future Federal Spending on Medicare,
Medicaid, and Social Security
25.0
As a Percentage of GDP

20.0

Effect of Health Care Cost Growth

15.0

Effect of Aging
10.0

5.0 Spending Without Aging and

Health Care Cost Growth
0.0
2009 2014 2019 2024 2029 2034 2039 2044 2049 2054 2059 2064 2069 2074 2079

Percent of Growth Attributed to: 2035 2080

Health Care Cost Growth 36% 56%

Aging 64% 44%

Source: Congressional Budget Office, June 2009.
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 America’s Population is Aging
Population age 65 and Over
25%
Percentage of Population Aged 65 and Over

20%

15%

10%
2009 2014 2019 2024 2029 2034 2039 2044
Year

Source: Social Security and Medicare Trustees’ Report, May 2009.

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 Americans are living longer
and having fewer children
Consequently, fewer workers are available
to support each Social Security recipient

1960: 5.1 to 1 Today: 3.1 to 1 2029: 2.2 to 1

Source: Social Security Administration, April 2009.

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 Benefits promised far exceed dedicated
tax revenues

20

18
Percent of Taxable Payroll

16
Social Security
Cash Deficits
14

Payroll Tax & Taxation of Benefits

12

10
2009 2015 2021 2027 2033 2039 2045 2051 2057 2063 2069 2075 2081
Calendar Year

Source: Social Security Trustees’ Report—May 2009 (Intermediate Projections).

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 Health Care Costs are Rising Faster
Than the Economy
25 Historic Level of
Federal Spending
20
Percentage of GDP

15 Historic Level of
Federal Revenues
10

0
2009 2014 2019 2024 2029 2034 2039 2044 2049 2054 2059

Assumes that health care cost growth will not exceed GDP growth.
Assumes that health care cost growth continues at the average rate for the past 40 years (2.5
percentage points greater than GDP growth.)
Assumes that health care cost growth rate declines to 1.0 percentage point greater than GDP growth—
consistent with the assumption used by the Medicare Trustees.
Source: Congressional Budget Office, June 2009.
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 Medicare Costs Soar in the Coming Decades
12

10
As a Percentage of GDP

0
2010 2020 2030 2040 2050 2060 2070 2080

Calendar Year

General Revenues required to fund the program

Income from dedicated taxes, premiums, and state transfers

Source: Medicare Trustees’ Report, May 2009.
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 Social Security and Medicare Part A Cumulative Cash
Surpluses and Deficits
In Constant 2009 Dollars — 2009 through 2085

$500
$147 Billion: Cumulative
Social Security Cash Surplus
$0
In Billions of Constant 2009

-$28 Trillion: Cumulative

Social Security Cash Deficits
-$500

-$58 Trillion: Cumulative

Dollars

-$1,000 Medicare Part A Cash Deficits

-$1,500

-$2,000
-86 Trillion: Cumulative Social Security
and Medicare Part A Cash Deficits
-$2,500

-$3,000
2010 2020 2030 2040 2050 2060 2070 2080
Calendar Year

Source: Social Security Trustees’ Report—May 2009 (Intermediate Projections)

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 Social Security, Medicare, Medicaid and Interest
Percentage of Revenues
Consume All Federal Revenues in 15 Years

Year

Social Security, Medicare and Medicaid Interest

Source: Government Accountability Office, Fall 2009.

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 Debt Held by the Public as a Percent of GDP
1940-2040
300

Actual Projected
250
As a Percentage of GDP

200

150
World War II
108.6% 2010
100
63.6%

50

0
1940
1943
1946
1949
1952
1955
1958
1961
1964
1967
1970
1973
1976
1979
1982
1984
1987
1990
1993
1996
1999
2002
2005
2008
2011
2014
2017
2020
2023
2026
2029
2032
2035
2038
Source: GAO Analysis, September 2009 and OMB Historical Tables 2010.
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 The Concord Coalition is the most respected voice of fiscally
responsible policy because it is a collection of many voices.

We rely on your support to help us continue our role as non-

partisan analysts, educators and advocates.

And, this year, your contribution goes further, as all new and
increased gifts are matched dollar for dollar
by The Peter G. Peterson Foundation.

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