About | HeinOnline Law Journal Library | HeinOnline Law Journal Library | HeinOnline

LOG IN
LOG IN


1 (November 14, 2002)

handle is hein.crs/crsuntaabrl0001 and id is 1 raw text is: Order Code RS20885 Updated November 14, 2002 CRS Report for Congress Received through the CRS Web Benefits for the Aged and the Federal Budget: Short- and Long-Term Projections James R. Storey Specialist in Social Legislation Domestic Social Policy Division Summary As the 108th Congress addresses short-term budget decisions, it may also want to consider the long-run impacts of those decisions and the major shifts in budget composition that are underway. Mandatory entitlements, particularly benefits for the aged, are projected to become even more dominant in federal budget policy. Spending on the aged under current policy as projected by the Congressional Budget Office will account for 43% of all federal outlays by 2010. A Congressional Research Service analysis of the President's FY2003 budget found that one-half of all federal outlays will benefit the aged, disabled, and survivors of deceased workers. While the retirement of the Baby Boom generation will accelerate this trend, population aging is a long-term phenomenon that will outlast the Baby Boomers. By 2075, continuation of current policy may find these programs accounting for 18% of gross domestic product (GDP), about twice their current GDP share. Furthermore, Congress may be pressed to add new benefits in response to population aging, such as improved support for long-term care and broader Medicare drug coverage. (This report will be updated as new information becomes available.) Congressional consideration of fiscal policy in the 21't century began under circumstances far different from the deliberations of the late 20' century, as sizable budget surpluses replaced 3 decades of annual deficits. However, after briefly experiencing the politics of budget surplus, deficit spending has resumed for the near term, brought on mainly by the recession, large tax cuts, and the costs of the war against terrorism. While surpluses may return later in this decade, long-term fiscal policy must allow for the expectation that financing problems related to population aging will mount for Social Security and Medicare, placing added pressure on future budgets. The onset of these funding problems could be delayed by legislative action or better-than-expected economic performance, but avoiding them is unlikely under current policies. In addition, other social policy issues may arise as the Baby Boom generation reaches old age, and addressing them could place heavy new claims on federal revenue. Congressional Research Service + The Library of Congress