CBO forecasts unwieldy Medicare burden
December 22, 2003
WASHINGTON - The Congressional Budget Office warned on Friday that escalating health care costs and aging baby boomers are threatening to overburden future generations with debt and taxes.
"Unless taxation reaches levels that are unprecedented in the United States, current spending policies will probably be financially unsustainable over the next 50 years," CBO said in a long-term budget forecast.
The CBO looked at scenarios that forecast total federal spending for Medicare and Medicaid at 6.4% to 21% of the GDP by 2050. Such spending equaled 3.9% of GDP in 2003.
Other federal spending, such as that for national defense and Social Security, is expected to exert far less pressure on the budget than Medicare and Medicaid. For example, CBO projections predict that Social Security expenditures will jump from 4.2% of GDP in 2003 to 6.2% of GDP in 2050.
Together, Medicare, Medicaid and Social Security now account for about 42 percent of federal outlays, compared with 2 percent in 1950 (before the health programs were created), and 25 percent in 1975.