CBO: PPACA a big federal spending driver

CBO analysts previously predicted that increases in spending on Social Security, major health care programs and interest will lead to significant increases in federal spending as a percentage of U.S. gross domestic product. In a discussion of the reasons for those increases, the analysts talked about what they believe to be the main drivers of growth in federal spending on Social Security and health care programs.

• Over the next 10 years, the aging of the population could account for 43 percent of that growth; increases in per-person spending on established health care programs, 13 percent; and the PPACA exchange subsidy and Medicaid expansion programs, 44 percent.
• Over the next 25 years, PPACA may drive about 21 percent of increased spending, and the aging of the population could generate about 55 percent of increased spending. Growth in per-capita spending on the programs that existed before PPACA came along might produce 55 percent of the growth.

In a section on Social Security, the analysts say the CBO is assuming the share of the total population ages 65 and older will grow to 21 percent in 2039, from 14 percent today. The CBO is assuming the share of U.S. residents ages 20 to 64 will drop to 54 percent by then, from 60 percent today.

See also: CBO: What if we shrink the group health tax break?