FIGURE 9-1 Projected federal spending under the committee’s four scenarios.

FIGURE 9-1 Projected federal spending under the committee’s four scenarios.

recovery, the committee’s four scenarios are designed to begin in fiscal 2012. The process of making painful choices, however, must begin now.

In the study baseline, the ratio of the debt to the gross domestic product (GDP) is projected to reach about 65 percent in 2011 and continue rising (see Chapter 1 for a description of the study baseline; see details in Table F-2 in Appendix F). In contrast, in all four of the committee’s paths, revenues are adjusted so the debt-to-GDP ratio declines to 60 percent by 2022 and stays at that level thereafter; see Figures 9-2 and 9-3 (also see Tables F-3 and F-4 in Appendix F). The next four sections provide the substantive details of each of the four paths; technical details on their construction are in Appendix F.

LOW SPENDING AND REVENUES PATH

The low path illustrates how revenue needs could be held close to their historic levels by adopting the low spending options for each of the three policy areas: see Figure 9-4 and (for the difference in spending and revenue levels between the low scenario and the study baseline) Figure 9-5. (For details; see Tables F-5 and F-6 in Appendix F.) Medicare and Medicaid spending growth would be allowed to exceed the economy’s growth rate only to accommodate the increasing number of people eligible for these programs due to changes in the age and gender composition of the population. Achieving this zero percent excess cost growth rate would require “strong medicine.” In the near term, it likely would entail direct reductions in the



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