Real Budget Numbers
by Brian Riedl

The Heritage Foundation analysis of the new CBO Baseline shows that:

• Substituting in CBO's alternative (and more realistic) assumptions shows entitlement spending driving the budget deficit to $367 billion in 2012, and $704 billion in 2017.
  
• Medicare spending will follow last year's 12% increase with a 13% hike in 2007. Total spending on Social Security, Medicare, and Medicaid will increase from 8.5% of GDP today all the way to 10.7% of GDP by 2017.
  
• Balancing the budget by 2012 (without tax increases) means federal spending can rise by $294 billion between 2007 and 2012. However, Social Security, Medicare, and Medicaid are projected to increase by $367 billion during that period. Lawmakers cannot balance the budget without addressing these explosive costs of these entitlement programs.

These and more observations are in" "New CBO Budget Baseline Reveals Entitlement Spending Imperiling Deficit Reduction Goals" at http://www.heritage.org/Research/Budget/wm1329.cfm.

Brian Riedl is Grover M. Hermann Fellow for Federal Budgetary Affairs at The Heritage Foundation