Is War Between Generations Inevitable?

Policy Reports | Social Security

No. 246
Friday, November 30, 2001
by Jagadeesh Gokhale and Laurence J. Kotlikoff

A Spending Reality Check

The latest CBO figures show that far from declining as a share of GDP, federal discretionary spending between FY 2000 and FY 2001 grew almost as fast as the economy. And the CBO's unofficial estimate is that federal spending between FY 2001 and FY 2002 will grow almost twice as fast as the economy! "On-budget" surpluses (non-Social Security and non-Medicare) are, it appears, gone for good. That's highly unfortunate because on-budget surpluses, indeed, massive on-budget surpluses, are critical to paying scheduled Social Security and Medicare benefits over time. Stated differently, the two programs' short-term off-budget surpluses fall far short of the extra funds they need to deal with their own long-term benefit commitments.

Read Article as PDF