January 19, 1996
Despite reforms included in the Republican budget proposal, entitlements will continue to swell under the budget plans of either the president or Congress.
- Spending on Social Security, which is nearly 20 times as large as Aid to Families with Dependent Children, is off the table by bipartisan consent.
- Federal health benefits will grow so rapidly that even the Republican budget proposal would let Medicare and Medicaid double as a share of Gross Domestic Product (GDP) by 2020.
- Under current law, federal entitlement outlays will climb from 10.9 percent of GDP in 1996 to 12.1 percent in 2002 and 14.6 percent in 2010.
- Then as the number of aged beneficiaries swells, entitlement spending will shoot up to 22.5 percent of GDP by 2030 -- 21.0 percent of GDP under the president's proposal, 20.3 percent under the vetoed Republican plan.
By the mid-2020s, entitlement spending alone would consume all federal revenues, and without borrowing nothing would be available for national defense.
Thus the federal government would still become a giant check-writing machine, transferring a rising share of middle-class worker income to middle-class retirees.
Source: "Tweedledum and Tweedledee," Facing Facts, Vol. 2, N. 1, January 19, 1996, Concord Coalition, 1019 19th Street, N.W., Suite 810, Washington, DC 20036, (202) 467-6222.
Browse more articles on Tax and Spending Issues