Sources of Spending Growth in CBO's Baseline
The CBO's baseline released today shows how spending is expected to grow over time and where that growth occurs in the federal budget. In general, spending grows from 20.8 percent of GDP in 2013 to 22.4 percent by 2024. However, different categories of spending have much different fates within the overall total.
Spending on interest expands the most, growing by 2 percentage points of GDP as interest rates rise and debt continues to grow. Spending on the major federal health care programs grows by 1.5 percentage points of GDP, largely from the Affordable Care Act's expansion of Medicaid and new subsidies for purchasing insurance in the health exchanges. Social Security spending grows by three-quarters of a percentage point as Baby Boomers continue to retire.
Meanwhile, spending on everything else declines significantly: discretionary and other mandatory programs combined fall by 2.6 percentage points of GDP in this period. The graph below shows the significant decline of these programs, which include safety net programs, defense, infrastructure, education, and energy spending.