That's real money by any measure. But it's not enough to brighten the CBO's otherwise gloomy forecast for the next 25 years. While annual deficits are "shrinking noticeably," the CBO said, "the long-term budget outlook is much less positive," with the portion of the national debt held by public investors forecast to climb from 74 percent of the economy today to 106 percent in 2039.
Outside World War II, the nation has never carried such a heavy debt load. Spending on health care remains the biggest driver, due primarily to huge numbers of being added to government health-care rolls.
This year, the CBO projects that the federal government will spend nearly $1 trillion -- almost a third of the entire $3.5 trillion federal budget -- on Medicare, Medicaid and insurance subsidies under the Affordable Care Act. That's more than the government will spend in any other category, including Social Security and national defense. And by 2039, the cost of health-care programs will rise sharply, growing from about 4.8 percent of GDP today to about 8 percent of GDP in 2039.
In the short term, the Affordable Care Act is a major factor in rising costs, the CBO said. In 2024, roughly 62 percent of the projected growth in health-care spending will be due to President Obama's initiative to reduce the ranks of the uninsured. By 2039, however, the aging of the population will be the most important factor.