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G. William Hoagland
Sr. Vice President
Bipartisan Policy Center
May 1, 2019
Federal Budget: Current Landscape
Total Budget Surplus/Deficit
FY 1965-2025
400
Actual Projections
200 Surplus
0
Deficit
-200
-400
Trend
-600
-800
-1000
-1200
-1400
-1600 Recession as
announced by
National Bureau
-1800 of Economic
Research
-2000
Year
Source: Budget and Economic Outlook: Fiscal Years 2019 to 2029. Congressional Budget Office; January 2019.
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Budget Outlook
FY 2012 – 2028
(In Billions of Dollars – % of GDP)
% ∆ annual
2012 2017 2018
2019 2020 …2029 2019-2029
Actual Actual Actual
Receipts
2,450 3,316 3,329 3,515 3,686 5,672 + 4.9%
$7,042 billion
Medicaid
Medicare $702 B Social Security
(10%) $1,856B
$1,292B
(26%)
(18%) Other
Other Health
Health Programs
Programs
$102
$102 B
B (2%)
(2%)
“Other Health Programs” includes: Health insurance subsidies, exchanges, and related spending; Department of Defense Medicare-
Eligible Retiree Health Care Fund (including TRICARE for Life); Children’s Health Insurance Program, and other programs.
Source: The Congressional Budget Office. The Budget and Economic Outlook: Fiscal Years 2019 to 2029, January 2029.
Federal Health Care Programs:
Fastest Growing (Non-Interest) Spending in Budget
Health Care Grows Faster than the Economy
($ in billions)
Source: 2019 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical
Insurance Trust Funds; April 23, 2019
Limits on Discretionary Budget Authority*
Under Budget Control Act of 2011 FY 2018 to 2021
(Billions of dollars)
• * The Budget Control Act (BCA) of 2011 specified that if lawmakers did not enact legislation from the Joint
Committee on Deficit Reduction that would reduce projected deficits by at least $1.2 trillion, automatic procedures
would go into effect to reduce spending during the period 2013-2021. Spending not constrained by these caps
(e.g. overseas contingency operations, emergencies, disaster relief and certain program integrity initiatives are
not included in these numbers.
• The Bipartisan Budget Act of 2018 adjusted the BCA 2011 caps for FY 2018 and FY 2019, increasing both
defense and nondefense caps.
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Trust Funds Cannot Fully Fund Scheduled Benefits
OASI:
2034 Early Retirement Impact Today 49
2052 Full Retirement Impact Today
54
HI:
Impact Today
57
Health Policy
Distribution of Spending for Health Care, 2018
$1,237 $379
$750 Billion $595 Billion $243 Billion
Billion $442
Billion Consumers Billion
Payments by
Other Private Out-of-
Medicare a Medicaid Public Pocket Other
Health
Spending Spending
Insurers
20.6% 16.3% 8.0% 10.4% 11.6%
33.9%
Public Spending: $1.6 Trillion, 43.5% Private Spending: $1.6 Trillion, 56.4%
Source: National Health Expenditures data from the Centers for Medicare and Medicaid Services (Forecast Summary, February
2019).
Gross spending for Medicare refers to all of the program’s spending not counting offsetting receipts (from premium payments
made by beneficiaries to the government and amounts paid by states from savings on Medicaid’s prescription drug costs) that
are credited to the program. Includes federal and state spending.
Total does not include the cost to the federal government of the tax exclusion for employment-based health insurance.
Relative Contributions to NHE 2017
Distribution of Medicare Fee-for-Service Beneficiaries
&
36% of
Beneficiarie 76% of
s Spending
with 4 or
more CCCs
15
Factors accounting for growth in per capita
national health expenditures (NHE)
5.8%
5.0%
4.4%
4.0%
3.0% 3.2%
2.1%
1.1%
1.3 1.6%
%
Source: Center for Medicare and Medicaid Services, Health Affairs January 2019
Public’s Priorities in Health Care Policy
1.0
Distance Between the Parties
0.9
0.8
0.7
0.6
0.5
0.4
1879 1887 1895 1903 1911 1919 1927 1935 1943 1951 1959 1967 1975 1983 1991
1999 2006
Source: Polarized America, The Dance of Ideology and Unequal Riches. McCarty, Poole, and Rosenthal. MIT Press, June 2006
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