Federal Budget: Entitlement Spending

* Entitlement spending is on autopilot, with annual spending determined by benefit formulas and caseloads.
* Entitlements (excluding net interest) account for 56 percent of all federal spending and 14 percent of GDP—up from 10 percent of GDP three years ago.
* The three largest entitlements are Social Security, Medicare, and Medicaid. Their total cost is projected to leap from 8.4 percent of GDP in 2007 to 18.4 percent by 2050.
* Unless those three programs are reformed, policymakers will eventually have to choose from among:

* $12,636 per household by 2050, and further thereafter;
* Eliminating every federal program except Social Security, Medicare, and Medicaid; or
* Increasing the national debt to unprecedented levels that could cause an economic collapse.



* Anti-poverty spending has surged 89 percent faster than inflation since 2000. Nearly half of this increase occurred in the past two years. President Bush became the first President to spend 3 percent of GDP on anti-poverty programs, and President Obama has already pushed it above 4 percent of GDP. State and local governments spend an additional 2 percent of GDP on these programs.
* Since 2000, Medicaid and Food Stamp rolls have expanded by nearly 20 million. Average benefit levels have grown faster than the inflation rate.
* Program success should be measured by reduced government dependency, not increased spending.

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