This morning, the Congressional Budget Office (CBO) released its updated Budget and Economic Outlook report, known in Washington, D.C. parlance as the “baseline.” This report details CBO’s projections on federal spending and revenue for this year and into the future.
Below are a few key points from the new report.
- The deficit for 2014, the difference between federal spending and revenue, will be $506 billion, up from the $492 billion forecasted in April. This is driven by lower‐than‐expected corporate income tax revenue.
- According to CBO, Medicaid spending jumped 15 percent year‐over‐year. Adding millions of new individuals under ObamaCare to Medicaid comes at a steep price. Social Security spending jumped 4.6 percent.
- The entitlement programs continue to drive spending projections and put enormous weight on the budget. CBO estimates that Social Security, the major health care programs, and interest account for 85 percent of projected spending increases over next ten years.
- Mandatory spending – which includes the big entitlement programs – will increase 5.5 percent annually over next ten years. ObamaCare leads the way. The newly created subsidies for health insurance will cost taxpayers $1 trillion over ten years, growing from $17 billion in 2014 to $450 billion in 2024.
- The one bright spot continues to the Budget Control Act of 2011 which is controlling the growth of discretionary spending. Fiscal Year 2015 spending will be $1.016 trillion compared to $1.014 trillion in FY14.