NCPA - National Center for Policy Analysis

Swelling Entitlements

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.

 

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