(NaturalNews) A new report from the non-partisan Congressional Budget Office paints a bleak economic picture for the country in the near-term: Spending on Social Security and government-provided healthcare will consume a staggering $3.2 trillion a year by 2023, or just slightly less than all federal outlays in fiscal year 2012.
The CBO said spending for both line items will double over the next decade, further eroding U.S. fiscal health and endangering the country's future - unless the unlikeliest of events occurs and Congress acts to mitigate the damage.
The congressional researchers did not lay out a plan to fix the long-term imbalance between revenues and spending on retirement and healthcare benefits, but the agency said any action taken sooner rather than later would reduce the impact - if lawmakers could only agree on a course of action.
More government equals higher costs: Why are we surprised?
"Unless the laws governing these programs are changed - or the increased spending is accompanied by corresponding reductions in other spending, sufficiently higher tax revenues, or a combination of the two - debt will rise sharply relative to (the U.S. economy) after 2023," the CBO warned.
This report is just the latest siren bell in the night by the CBO, warning a do-nothing Congress and an obstinate president about the real fiscal cliff that is fast approaching, and it comes as the Legislative and Executive branches dig in for yet another battle over the federal deficit in the months ahead.
"Deciding now what policy changes to make to resolve that long-term imbalance would allow for gradual implementation, which would give households, businesses and state and local governments time to plan and adjust their behavior," said the CBO.
Last June, congressional researchers estimated that federal health programs would swallow more than 25 percent of U.S. gross domestic product (which currently stands at about $15.5 trillion a year) by 2037 if nothing is done to reform benefits.
In fiscal year 2012, total federal spending for Medicare, Medicaid and Social Security was about $1.6 trillion; heathcare spending alone was $885 billion, Reuters reported.
The CBO's estimate, which is based on current law, as well as trends in government collections and outlays, said that by 2023 spending for those three programs alone will surpass $3 trillion; Obamacare will add another $134 billion in costs to provide coverage for about 26 million people who will receive insurance through expensive new state-based "exchanges."
So much for 'cost control'
Expanded healthcare coverage under Obamacare, by the way, is nowhere near the $50-65 billion per year President-elect Obama said it would cost. The CBO says the coverage under the Affordable Care Act will cost more like $1.3 trillion over the next decade. Part of the reason for the higher costs is that more businesses are expected to cut costs by getting rid of employer-based health insurance and forcing workers into the state-sponsored, taxpayer-subsidized exchanges. In August, the CBO estimated that figure to be around four million people but the number rose to about seven million people in this latest report.
Among the CBO's estimates:
-- Medicare, the program for some 50 million older and disabled Americans, will likely remain about three percent of GDP until 2019, then climb a half-percent by 2023, for a total of $1.1 trillion.
-- Medicaid won't grow as fast: It is forecast to be about 2.2 percent of GDP by 2023, when it is expected to cost about $572 billion for some 84 million recipients.
-- Social Security outlays, currently estimated to account for nearly 25 percent of government spending in 2014, are estimated to be about five percent of GDP for most years through 2018, when the outlay will climb to 5.5 percent of GDP in a decade.
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