During testimony on The 2013 Long-Term Budget Outlook, estimates were provided for the economic effects of eliminating automatic spending reductions in 2014. This letter corrects and clarifies those estimates.
CBO projects that the Treasury will exhaust its well-established set of extraordinary measures—which allow for additional borrowing without breaching the debt limit—as well as its cash balance, between October 22 and the end of the month.
As part of The 2013 Long-Term Budget Outlook released last week, CBO compared lifetime payroll taxes and benefits for the Medicare program and the Social Security program for people born in different decades.
Director Doug Elmendorf discusses the slowdown in health care spending, including significant downward revisions to CBO’s projections of such spending, at a conference hosted by the Brookings Institution.
Previously, CBO based its long-term budget estimates on the mortality rates projected by the Social Security trustees. This year, CBO projected faster declines in mortality rates (and thus longer life expectancy) than the trustees do.
CBO estimates that about 52 million people are currently covered by Medicare. In 2012, payroll taxes and beneficiaries’ premiums covered less than half of the $551 billion that the federal government spent on Medicare.
Medicaid is a joint federal-state program with an average enrollment of about 57 million people this year. In 2012, federal spending for Medicaid was $251 billion, of which $223 billion covered benefits for enrollees.
Although spending for health care in the United States has grown more slowly in recent years than it had previously, high and rising levels of such spending continue to pose a challenge for Medicare, Medicaid, and other government programs.
On an annualized basis, the funding provided by the continuing resolution would exceed the statutory caps by $19 billion. Defense funding would exceed its cap by about $20 billion; nondefense funding would be about $1 billion below its cap.
The federal government ran a budget deficit of roughly $750 billion for the first 11 months of fiscal year 2013, CBO estimates, a reduction of more than $400 billion from the shortfall recorded for the same period last year.
In the 2011–2012 academic year, 9.4 million students received $34 billion in Pell grants. How would tightening eligibility or changing grant amounts affect the program’s costs or the number of recipients?