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Choosing the Nation's Fiscal Future (2010)

Chapter: Appendix F: Constructing Multiple Paths to Sustainability

« Previous: Appendix E: Revenue Options and Their Implications
Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

Appendix F
Constructing Multiple Paths to Sustainability

The committee constructed the sustainable scenarios in three steps. First, unique spending trajectories for Medicare and Medicaid, Social Security, and defense and domestic programs were specified for each of the scenarios. Details of the spending trajectories for Social Security and defense and domestic programs are discussed in Appendixes C and D, respectively. The health trajectories, which are by their very nature more speculative, are discussed in the first section below.

Second, a target debt-to-GDP (gross domestic product) ratio of 60 percent was uniformly applied across the scenarios so that the target ratio was gradually reached by 2022. Payments of interest on the debt (an amount derived by multiplying the debt level in a year by the projected interest rate on debt in that year) are the same for all scenarios.

Third, revenue levels were adjusted annually to a level that, given the spending amount specified for that year, produced deficits that were arithmetically consistent with the debt-to-GDP ratio specified for that year.

MEDICARE AND MEDICAID TRAJECTORIES

Low Spending Trajectory

The Congressional Budget Office (CBO) (2009) recently laid out a zero percent excess cost growth (ECG) trajectory for Medicare and Medicaid spending in its update of the long-term budget outlook. However, it did so using the assumptions of the “extended-baseline scenario” for Medicare and Medicaid, rather than the “alternative fiscal scenario” (which abandons

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-1 Basis of the Low Spending Trajectory for Medicare and Medicaid

2008 (Percentage of GDP)

2025 Percentages of GDP

Actual

CBO Extended-Baseline Scenario

CBO: 0% Excess Cost Growth

CBO Alternative Fiscal Scenario/Study Baseline

0% Excess Cost Growth: For Use in Committee’s Scenarios

4.1

7.3

5.9

7.4

(5.9/7.3)*7.4 = 6.0

the assumption that Medicare’s payment rates for physicians will grow with inflation) that is the basis of the committee’s study baseline for Medicare and Medicaid.

The committee adopted a simple approach to reconcile CBO’s zero percent ECG trajectory with the study’s baseline assumptions. In 2025, for example, CBO’s path puts Medicare and Medicaid spending at 7.3 percent of GDP and program spending at 5.9 percent of GDP—that is, 19.2 percent below the extended baseline. Although the study baseline puts Medicare and Medicaid at 7.4 percent of GDP in 2025, which is slightly higher than CBO’s extended baseline, the committee still assumed that the zero percent ECG trajectory would put Medicare and Medicaid at 19.2 percent below the study baseline—that is, at 6 percent of GDP; see Table F-1.

High Spending Trajectory

The high spending path uses CBO data to broadly mimic the long-term cost-growth path of the Medicare Trustees. The formula used in the extrapolation does two things:

  1. It causes spending in 2083 to be at the same level as that achieved by the 1 percent ECG path laid out by CBO in its most recent update of the long-term budget outlook. The same adjustments the committee made to the zero percent ECG path (as described above) were made to the 1 percent ECG path.

  2. It causes the spending curve to flatten out to zero percent ECG by 2083.

The formula that accomplishes that is as follows:

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

where MM is Medicare and Medicaid spending, t is any year after 2018, Zero Percent ECG is Medicare and Medicaid spending under a zero percent excess cost growth assumption, and Xt is a functional form that captures the gradual diminishment of excess cost growth, where

The spending path that results fluctuates around the study baseline for Medicare and Medicaid until around 2050, sometimes falling slightly below it, sometimes slightly above it. The high spending trajectory, for the sake of conceptual tidiness, is constrained to never exceed the study baseline. As a result, the high spending trajectory follows the study baseline until 2030.

Intermediate Trajectories

For every year from 2012 to 2083, the intermediate-1 spending trajectory is exactly equidistant from the low and intermediate-2 spending trajectories, while the intermediate-2 spending trajectory is exactly equidistant from the intermediate-1 and high spending trajectories. The formulas are as follows:

where high represents Medicare and Medicaid expenditures under the high spending trajectory, and low represents program expenditures under the low spending trajectory.

SETTING THE DEBT-TO-GDP TARGET

To set the debt-to-GDP target, assume that g is the growth rate of nominal GDP and that OMF (other means for financing) represents transactions that affect federal borrowing but that are not included in revenues and outlays (and which are generally small relative to the deficit).1 Then:

and

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

If the debt-to-GDP ratio is held constant, then:

If the debt-to-GDP ratio needs to be reduced—for example, by 1 percent a year—then:

Revenue levels can be specified once the target deficit is known:

All four scenarios allow the federal debt to grow as a percentage of GDP by 0.9 percent from 2011 to 2012; roughly stabilize it from 2012 to 2014; and then reduce it by 0.3 percent from 2014 to 2015, 0.4 percent from 2015 to 2016, 1 percent from 2016 to 2017, 4.3 percent from 2017 to 2018 (a large decrease made possible by a large projected repayment of Troubled Asset Relief Program (TARP) funds in 2018, which the scenarios apply toward debt reduction), 0.9 percent from 2018 to 2019, 0.6 percent from 2019 to 2020, 0.3 percent from 2020 to 2021, 0.5 percent from 2021 to 2022, 0.1 percent from 2022 to 2023, and maintains it at a stable level from then on.

The transitional decline in the debt-to-GDP ratio from 2012 to 2023 is designed to produce a low scenario with a near-term revenue trajectory that is as smooth as possible and with revenue levels that are as close to the historical average of 18.5 percent as possible.

Table F-2 presents information about projected revenues, outlays, deficits, and debt in the study baseline. Table F-3 presents information about projected deficits, debt, and interest payments under the committee’s four scenarios. Table F-4 presents information about the differences in deficits, debt, and interest payments between the committee’s four scenarios and the study baseline. Tables F-5, F-7, F-9, and F-11, respectively, present information about revenues and outlays in the low, intermediate-1, intermediate-2, and high scenarios. Tables F-6, F-8, F-10, and F-12, respectively, present information about the differences in revenues and outlays between the low, intermediate-1, intermediate-2, and high scenarios and the study baseline.

DELAY SCENARIOS

General

The delay scenarios indicate, as simply as possible, the consequences of delaying changes. The same debt-to-GDP target is applied, and the same

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-2 Projected Revenues, Outlays, Deficits, and Debt in the Study Baseline, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Interest

Deficit

Debt

Total

Defense

Dom Discd

Dom Mande

2008f

17.7

21.0

4.1

4.3

10.8

4.3

3.7

2.8

1.8

3.2

40.8

2009

15.5

27.6

4.8

4.8

16.8

4.8

4.1

7.9

1.2

12.1

55.0

2010

16.0

24.5

5.1

4.8

13.5

5.1

4.4

3.9

1.2

8.5

60.9

2011

17.1

23.7

5.1

4.8

12.4

5.0

4.1

3.2

1.4

6.6

64.8

2012

17.9

22.2

4.9

4.7

10.8

4.5

3.7

2.5

1.7

4.3

66.5

2013

18.1

22.2

5.1

4.7

10.2

4.1

3.5

2.5

2.1

4.0

67.6

2014

18.1

22.2

5.3

4.8

9.6

3.9

3.4

2.3

2.5

4.1

69.0

2015

18.3

22.3

5.4

4.8

9.3

3.7

3.3

2.2

2.8

4.0

70.4

2016

18.3

22.6

5.6

4.9

9.1

3.7

3.3

2.2

3.0

4.3

72.1

2017

18.3

22.7

5.7

5.0

8.9

3.6

3.2

2.1

3.1

4.3

73.8

2018

18.3

22.8

5.7

5.1

8.7

3.5

3.1

2.0

3.4

4.5

73.8

2019

18.3

23.4

6.1

5.2

8.6

3.4

3.0

2.1

3.6

5.1

76.1

2020

18.3

23.8

6.4

5.3

8.5

3.4

3.0

2.1

3.6

5.5

78.8

2021

18.4

24.1

6.6

5.4

8.5

3.4

3.0

2.1

3.7

5.7

81.7

2022

18.4

24.5

6.8

5.4

8.6

3.4

3.0

2.1

3.7

6.0

84.7

2023

18.4

24.8

7.0

5.5

8.5

3.4

3.0

2.1

3.8

6.4

87.8

2024

18.5

25.1

7.2

5.5

8.5

3.4

3.0

2.1

3.9

6.6

91.3

2025

18.5

25.6

7.4

5.6

8.6

3.4

3.0

2.1

3.9

7.1

95.0

2030

18.7

28.1

8.7

6.0

8.5

3.4

3.0

2.1

4.8

9.4

117.6

2035

18.9

30.4

9.9

6.0

8.5

3.4

3.0

2.1

6.0

11.5

146.5

2040

19.1

32.8

10.9

5.9

8.5

3.4

3.0

2.1

7.4

13.7

180.2

2045

19.3

35.1

11.8

5.8

8.4

3.4

3.0

2.1

9.1

15.8

218.2

2050

19.6

37.5

12.6

5.7

8.4

3.4

3.0

2.1

10.8

17.9

259.2

2055

19.9

40.2

13.4

5.8

8.4

3.3

3.0

2.1

12.7

20.4

303.8

2060

20.3

43.1

14.2

5.8

8.4

3.4

3.0

2.1

14.7

22.9

351.7

2065

20.6

46.3

15.1

5.9

8.4

3.3

3.0

2.1

17.0

25.7

403.4

2070

20.9

49.7

16.0

6.0

8.4

3.3

3.0

2.1

19.4

28.8

460.4

2075

21.2

53.4

17.0

6.1

8.4

3.3

3.0

2.1

21.9

32.2

521.5

2080

21.6

57.4

17.9

6.2

8.4

3.4

3.0

2.1

24.9

35.9

590.5

2083

21.8

59.7

18.4

6.2

8.4

3.4

3.0

2.1

26.7

38.0

633.8

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-3 Projected Federal Deficits, Debt, and Interest Payments Under the Committee’s Four Scenarios, as Percentages of GDP

Selected Years

Deficit

Debt

Interest Payments

2008a

3.2

40.8

1.8

2009

12.1

55.0

1.2

2010

8.5

60.9

1.2

2011

6.5

64.8

1.4

2012

3.2

65.4

1.7

2013

2.9

65.4

2.1

2014

2.6

65.4

2.4

2015

2.2

65.2

2.6

2016

2.1

64.9

2.7

2017

1.7

64.2

2.8

2018

1.4

61.5

2.9

2019

1.8

61.0

2.9

2020

1.9

60.6

2.9

2021

2.0

60.4

2.8

2022

1.9

60.0

2.7

2023

2.2

60.0

2.6

2024

2.2

60.0

2.6

2025

2.2

60.0

2.5

2030

2.2

60.0

2.5

2035

2.3

60.0

2.5

2040

2.3

60.0

2.5

2045

2.2

60.0

2.5

2050

2.3

60.0

2.5

2055

2.3

60.0

2.5

2060

2.2

60.0

2.5

2065

2.3

60.0

2.6

2070

2.3

60.0

2.6

2075

2.3

60.0

2.6

2080

2.2

60.0

2.6

2083

2.3

60.0

2.6

aActual spending.

nonbaseline trajectories are used. The difference is that the changes start 5 or 10 years later, that is, in 2017 or 2022. The nonbaseline revenue paths are similarly delayed 5 or 10 years. There are two ways these elements can be combined; for example, for 5-year delays (also see Chapter 9):

  1. the revenue path necessary to attain the debt-to-GDP target for a 5-year delay of each spending trajectory, and

  2. to stay within a given delayed revenue trajectory and attain the debt-to-GDP target, combinations of delayed spending paths.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-4 Percentage Point Differences for Deficits, Debt, and Interest Payments Between the Committee’s Four Scenarios and the Study Baseline, as Shares of GDP

Selected Years

Deficit

Debt

Interest Payments

2008a

0.0

0.0

0.0

2009

0.0

0.0

0.0

2010

0.0

0.0

0.0

2011

0.0

0.0

0.0

2012

−1.1

−1.1

0.0

2013

−1.2

−2.2

−0.1

2014

−1.5

−3.6

−0.1

2015

−1.8

−5.3

−0.2

2016

−2.2

−7.2

−0.3

2017

−2.6

−9.5

−0.4

2018

−3.1

−12.3

−0.5

2019

−3.4

−15.2

−0.7

2020

−3.6

−18.2

−0.8

2021

−3.8

−21.3

−0.9

2022

−4.1

−24.6

−1.0

2023

−4.2

−27.9

−1.1

2024

−4.5

−31.3

−1.3

2025

−4.9

−35.0

−1.4

2030

−7.2

−57.6

−2.3

2035

−9.2

−86.5

−3.5

2040

−16.7

−120.2

−4.9

2045

−13.6

−158.2

−6.5

2050

−17.3

−199.3

−8.3

2055

−18.1

−243.8

−10.2

2060

−20.6

−291.7

−12.2

2065

−23.4

−343.4

−14.4

2070

−26.5

−400.5

−16.8

2075

−29.9

−461.5

−19.4

2080

−33.6

−530.5

−22.4

2083

−35.7

−573.9

−24.2

aActual spending.

Delayed Medicare and Medicaid Trajectories

Low Spending Trajectory

For the low spending path, for the 5-year delay, this path follows the study baseline until 2017, after which it grows at the same proportional rate as the zero percent ECG trajectory that is implemented in 2012. For the 10-year delay, this path follows the study baseline until 2022, after which it grows at the same proportional rate as the zero percent ECG spending trajectory.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-5 Federal Spending and Revenues Under the Committee’s Low Scenario, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Total

Defense

Dom Discd

Dom Mande

2008f

17.7

21.0

4.1

4.3

10.8

4.3

3.7

2.8

2009

15.5

27.6

4.8

4.8

16.8

4.8

4.1

7.9

2010

16.0

24.5

5.1

4.8

13.5

5.1

4.4

3.9

2011

17.1

23.7

5.1

4.8

12.4

5.0

4.1

3.2

2012

18.5

21.8

4.8

4.7

10.5

4.4

3.6

2.5

2013

18.5

21.4

5.0

4.7

9.6

3.9

3.3

2.5

2014

18.5

21.1

5.2

4.7

8.8

3.5

3.1

2.3

2015

18.5

20.7

5.2

4.7

8.2

3.2

2.9

2.1

2016

18.5

20.7

5.4

4.8

7.8

3.0

2.7

2.1

2017

18.5

20.3

5.4

4.8

7.4

2.8

2.5

2.0

2018

18.5

20.0

5.3

4.9

6.9

2.7

2.4

1.9

2019

18.5

20.3

5.5

4.9

6.9

2.6

2.3

2.0

2020

18.5

20.4

5.7

5.0

6.8

2.6

2.3

2.0

2021

18.5

20.5

5.8

5.1

6.8

2.6

2.3

2.0

2022

18.5

20.5

5.8

5.1

6.9

2.6

2.3

2.0

2023

18.4

20.6

6.0

5.1

6.8

2.6

2.3

2.0

2024

18.5

20.7

6.1

5.1

6.8

2.6

2.3

2.0

2025

18.5

20.6

6.0

5.2

6.9

2.6

2.3

2.0

2030

19.1

21.3

6.5

5.5

6.8

2.6

2.3

2.0

2035

19.2

21.5

6.8

5.4

6.8

2.6

2.3

2.0

2040

19.1

21.5

7.0

5.1

6.8

2.6

2.3

2.0

2045

19.1

21.3

7.1

4.9

6.8

2.6

2.3

2.0

2050

18.9

21.1

7.1

4.7

6.8

2.6

2.3

2.0

2055

18.8

21.1

7.2

4.7

6.7

2.5

2.2

1.9

2060

18.8

21.0

7.2

4.6

6.8

2.6

2.3

2.0

2065

18.7

21.0

7.2

4.6

6.7

2.5

2.2

1.9

2070

18.8

21.2

7.3

4.6

6.7

2.5

2.2

1.9

2075

19.0

21.3

7.5

4.6

6.7

2.5

2.2

1.9

2080

19.3

21.5

7.5

4.7

6.8

2.6

2.3

2.0

2083

19.2

21.5

7.5

4.6

6.8

2.6

2.3

2.0

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-6 Percentage Point Differences for Revenues and Outlays Between the Committee’s Low Scenario and the Study Baseline, as Percentages of GDP

Selected Years

Revenues

Outlays (total)

Outlays (noninterest)

M and Ma

Soc Secb

Def and Domc

Total

Defense

Dom Discd

Dom Mande

2008f

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2009

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2010

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2011

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2012

0.7

−0.4

−0.4

−0.1

0.0

−0.3

−0.2

−0.1

0.0

2013

0.4

−0.8

−0.7

−0.1

0.0

−0.6

−0.3

−0.2

0.0

2014

0.4

−1.1

−1.0

−0.1

0.0

−0.8

−0.4

−0.4

−0.1

2015

0.3

−1.5

−1.4

−0.2

−0.1

−1.1

−0.5

−0.5

−0.1

2016

0.3

−1.9

−1.6

−0.2

−0.1

−1.3

−0.6

−0.6

−0.1

2017

0.2

−2.4

−2.0

−0.3

−0.2

−1.5

−0.7

−0.7

−0.1

2018

0.2

−2.9

−2.4

−0.4

−0.2

−1.7

−0.8

−0.8

−0.1

2019

0.2

−3.1

−2.5

−0.5

−0.2

−1.7

−0.8

−0.7

−0.1

2020

0.2

−3.4

−2.6

−0.6

−0.3

−1.7

−0.8

−0.7

−0.1

2021

0.1

−3.6

−2.7

−0.7

−0.3

−1.7

−0.8

−0.7

−0.1

2022

0.1

−4.0

−3.0

−0.9

−0.3

−1.7

−0.8

−0.7

−0.1

2023

0.0

−4.2

−3.1

−1.0

−0.3

−1.7

−0.8

−0.7

−0.1

2024

0.0

−4.5

−3.2

−1.1

−0.4

−1.7

−0.8

−0.7

−0.1

2025

0.0

−4.9

−3.5

−1.4

−0.4

−1.7

−0.8

−0.7

−0.1

2030

0.4

−6.8

−4.5

−2.3

−0.5

−1.7

−0.8

−0.7

−0.1

2035

0.3

−8.9

−5.4

−3.1

−0.6

−1.7

−0.8

−0.7

−0.1

2040

0.0

−11.3

−6.4

−3.9

−0.7

−1.7

−0.8

−0.7

−0.1

2045

−0.2

−13.8

−7.3

−4.7

−0.9

−1.7

−0.8

−0.7

−0.1

2050

−0.7

−16.4

−8.1

−5.5

−1.0

−1.7

−0.8

−0.7

−0.1

2055

−1.1

−19.2

−9.0

−6.2

−1.1

−1.7

−0.8

−0.7

−0.1

2060

−1.5

−22.1

−10.0

−7.0

−1.2

−1.7

−0.8

−0.7

−0.1

2065

−1.8

−25.3

−10.8

−7.9

−1.3

−1.7

−0.8

−0.7

−0.1

2070

−2.0

−28.5

−11.7

−8.7

−1.4

−1.7

−0.8

−0.7

−0.1

2075

−2.1

−32.0

−12.6

−9.5

−1.4

−1.7

−0.8

−0.7

−0.1

2080

−2.2

−35.9

−13.5

−10.3

−1.5

−1.7

−0.8

−0.7

−0.1

2083

−2.5

−38.2

−14.1

−10.8

−1.5

−1.7

−0.8

−0.7

−0.1

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-7 Federal Spending and Revenues Under the Committee’s Intermediate-1 Scenario, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Total

Defense

Dom Discd

Dom Mande

2008f

17.7

21.0

4.1

4.3

10.8

4.3

3.7

2.8

2009

15.5

27.6

4.8

4.8

16.8

4.8

4.1

7.9

2010

16.0

24.5

5.1

4.8

13.5

5.1

4.4

3.9

2011

17.1

23.7

5.1

4.8

12.4

5.0

4.1

3.2

2012

19.2

22.5

4.9

4.7

11.1

4.5

4.1

2.5

2013

19.6

22.5

5.0

4.7

10.6

4.1

4.0

2.5

2014

19.9

22.5

5.2

4.8

10.1

3.9

3.9

2.3

2015

20.2

22.4

5.2

4.8

9.8

3.7

3.8

2.2

2016

20.5

22.6

5.5

4.9

9.6

3.7

3.7

2.2

2017

20.7

22.5

5.5

4.9

9.3

3.6

3.7

2.1

2018

21.0

22.4

5.5

5.0

9.0

3.5

3.6

2.0

2019

21.0

22.8

5.7

5.1

9.0

3.4

3.5

2.1

2020

21.0

22.9

5.9

5.2

8.9

3.4

3.5

2.1

2021

21.1

23.1

6.1

5.3

8.9

3.4

3.5

2.1

2022

21.2

23.1

6.1

5.3

9.0

3.4

3.5

2.1

2023

21.1

23.3

6.4

5.4

8.9

3.4

3.5

2.1

2024

21.2

23.4

6.5

5.4

8.9

3.4

3.5

2.1

2025

21.3

23.5

6.5

5.4

9.0

3.4

3.5

2.1

2030

22.2

24.4

7.2

5.7

8.9

3.4

3.5

2.1

2035

22.6

24.9

7.8

5.6

8.9

3.4

3.5

2.1

2040

22.8

25.2

8.3

5.4

8.9

3.4

3.5

2.1

2045

23.0

25.2

8.6

5.2

8.8

3.4

3.4

2.1

2050

23.0

25.3

8.9

5.0

8.8

3.4

3.4

2.1

2055

23.2

25.4

9.1

5.0

8.7

3.3

3.4

2.1

2060

23.3

25.6

9.3

4.9

8.8

3.4

3.4

2.1

2065

23.4

25.7

9.5

4.9

8.7

3.3

3.4

2.1

2070

23.6

25.9

9.8

4.9

8.7

3.3

3.4

2.1

2075

23.9

26.2

10.0

4.9

8.7

3.3

3.4

2.1

2080

24.3

26.5

10.2

4.9

8.8

3.4

3.4

2.1

2083

24.2

26.5

10.2

4.9

8.8

3.4

3.4

2.1

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-8 Percentage Point Differences for Revenues and Outlays Between the Committee’s Intermediate-1 Scenario and the Study Baseline, as Percentages of GDP

Selected Years

Revenues

Outlays (total)

Outlays (noninterest)

M and Ma

Soc Secb

Def and Domc

Total

Defense

Dom Discd

Dom Mande

2008f

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2009

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2010

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2011

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2012

1.4

0.3

0.3

−0.1

0.0

0.3

0.0

0.4

0.0

2013

1.5

0.3

0.4

−0.1

0.0

0.4

0.0

0.4

0.0

2014

1.8

0.3

0.4

−0.1

0.0

0.5

0.0

0.5

0.0

2015

1.9

0.1

0.3

−0.1

0.0

0.5

0.0

0.5

0.0

2016

2.2

0.0

0.3

−0.1

0.0

0.4

0.0

0.5

0.0

2017

2.4

−0.2

0.2

−0.2

0.0

0.4

0.0

0.5

0.0

2018

2.7

−0.4

0.1

−0.3

0.0

0.4

0.0

0.4

0.0

2019

2.7

−0.7

0.0

−0.3

0.0

0.4

0.0

0.5

0.0

2020

2.7

−0.9

−0.1

−0.4

−0.1

0.4

0.0

0.5

0.0

2021

2.7

−1.1

−0.2

−0.5

−0.1

0.4

0.0

0.5

0.0

2022

2.8

−1.3

−0.3

−0.6

−0.1

0.4

0.0

0.5

0.0

2023

2.7

−1.6

−0.4

−0.7

−0.1

0.4

0.0

0.5

0.0

2024

2.7

−1.8

−0.5

−0.8

−0.1

0.4

0.0

0.5

0.0

2025

2.8

−2.1

−0.7

−1.0

−0.1

0.4

0.0

0.5

0.0

2030

3.5

−3.7

−1.4

−1.5

−0.2

0.4

0.0

0.5

0.0

2035

3.7

−5.5

−2.1

−2.1

−0.3

0.4

0.0

0.5

0.0

2040

3.7

−7.6

−2.7

−2.6

−0.5

0.4

0.0

0.5

0.0

2045

3.7

−9.9

−3.4

−3.2

−0.6

0.4

0.0

0.4

0.0

2050

3.4

−12.3

−4.0

−3.7

−0.7

0.4

0.0

0.4

0.0

2055

3.3

−14.8

−4.7

−4.3

−0.8

0.4

0.0

0.4

0.0

2060

3.1

−17.6

−5.4

−4.9

−0.9

0.4

0.0

0.4

0.0

2065

2.8

−20.6

−6.2

−5.6

−1.0

0.4

0.0

0.4

0.0

2070

2.8

−23.7

−6.9

−6.2

−1.1

0.4

0.0

0.4

0.0

2075

2.7

−27.1

−7.7

−7.0

−1.2

0.4

0.0

0.4

0.0

2080

2.7

−30.9

−8.5

−7.7

−1.2

0.4

0.0

0.4

0.0

2083

2.5

−33.2

−9.1

−8.2

−1.2

0.4

0.0

0.4

0.0

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-9 Federal Spending and Revenues Under the Committee’s Intermediate-2 Scenario, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Total

Defense

Dom Discd

Dom Mande

2008f

17.7

21.0

4.1

4.3

10.8

4.3

3.7

2.8

2009

15.5

27.6

4.8

4.8

16.8

4.8

4.1

7.9

2010

16.0

24.5

5.1

4.8

13.5

5.1

4.4

3.9

2011

17.1

23.7

5.1

4.8

12.4

5.0

4.1

3.2

2012

18.8

22.0

4.9

4.7

10.7

4.5

3.7

2.5

2013

19.0

21.8

5.0

4.7

10.0

4.0

3.5

2.5

2014

19.1

21.7

5.3

4.8

9.3

3.7

3.3

2.3

2015

19.4

21.6

5.3

4.8

8.9

3.5

3.2

2.1

2016

19.6

21.7

5.5

4.9

8.6

3.4

3.1

2.1

2017

19.8

21.5

5.6

4.9

8.3

3.3

3.0

2.0

2018

20.0

21.4

5.6

5.0

7.9

3.2

2.9

1.9

2019

20.1

21.9

5.9

5.1

7.9

3.1

2.8

2.0

2020

20.2

22.1

6.1

5.2

7.8

3.1

2.8

2.0

2021

20.3

22.2

6.3

5.3

7.8

3.1

2.8

2.0

2022

20.4

22.3

6.4

5.3

7.9

3.1

2.8

2.0

2023

20.3

22.5

6.7

5.4

7.8

3.1

2.8

2.0

2024

20.5

22.7

6.9

5.4

7.8

3.1

2.8

2.0

2025

20.7

22.9

7.0

5.4

7.9

3.1

2.8

2.0

2030

21.9

24.1

7.9

5.8

7.8

3.1

2.8

2.0

2035

22.6

24.9

8.8

5.7

7.8

3.1

2.8

2.0

2040

23.2

25.5

9.6

5.6

7.8

3.1

2.8

2.0

2045

23.7

25.9

10.2

5.5

7.8

3.0

2.7

2.0

2050

24.1

26.3

10.6

5.4

7.8

3.0

2.7

2.0

2055

24.5

26.8

11.1

5.5

7.7

3.0

2.7

1.9

2060

25.0

27.2

11.4

5.5

7.8

3.0

2.7

2.0

2065

25.3

27.6

11.8

5.6

7.7

3.0

2.7

1.9

2070

25.7

28.1

12.2

5.6

7.7

3.0

2.7

1.9

2075

26.2

28.5

12.6

5.6

7.7

3.0

2.7

1.9

2080

26.6

28.8

12.8

5.6

7.8

3.0

2.7

2.0

2083

26.4

28.7

12.8

5.6

7.8

3.0

2.7

2.0

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-10 Percentage Point Differences for Revenues and Outlays Between the Committee’s Intermediate-2 Scenario and the Study Baseline, as Percentages of GDP

Selected Years

Revenues

Outlays (total)

Outlays (noninterest)

M and Ma

Soc Secb

Def and Domc

Total

Defense

Dom Discd

Dom Mande

2008f

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2009

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2010

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2011

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2012

0.9

−0.2

−0.2

0.0

0.0

−0.1

−0.1

0.0

0.0

2013

0.8

−0.3

−0.3

0.0

0.0

−0.2

−0.1

−0.1

0.0

2014

1.0

−0.5

−0.4

0.0

0.0

−0.3

−0.2

−0.1

−0.1

2015

1.1

−0.7

−0.5

−0.1

0.0

−0.5

−0.2

−0.1

−0.1

2016

1.3

−0.9

−0.6

−0.1

0.0

−0.5

−0.2

−0.2

−0.1

2017

1.5

−1.1

−0.8

−0.1

0.0

−0.6

−0.3

−0.2

−0.1

2018

1.7

−1.4

−0.9

−0.1

0.0

−0.7

−0.3

−0.2

−0.1

2019

1.8

−1.6

−0.9

−0.2

0.0

−0.7

−0.3

−0.2

−0.1

2020

1.9

−1.7

−1.0

−0.2

−0.1

−0.7

−0.3

−0.2

−0.1

2021

1.9

−1.9

−1.0

−0.2

−0.1

−0.7

−0.3

−0.2

−0.1

2022

2.0

−2.1

−1.1

−0.3

−0.1

−0.7

−0.3

−0.2

−0.1

2023

1.9

−2.3

−1.1

−0.3

−0.1

−0.7

−0.3

−0.2

−0.1

2024

2.0

−2.5

−1.2

−0.4

−0.1

−0.7

−0.3

−0.2

−0.1

2025

2.2

−2.7

−1.3

−0.5

−0.1

−0.7

−0.3

−0.2

−0.1

2030

3.2

−4.0

−1.7

−0.8

−0.2

−0.7

−0.3

−0.2

−0.1

2035

3.7

−5.5

−2.0

−1.1

−0.3

−0.7

−0.3

−0.2

−0.1

2040

4.1

−7.2

−2.3

−1.4

−0.3

−0.7

−0.3

−0.2

−0.1

2045

4.5

−9.2

−2.6

−1.7

−0.3

−0.7

−0.3

−0.2

−0.1

2050

4.5

−11.2

−2.9

−2.0

−0.3

−0.7

−0.3

−0.2

−0.1

2055

4.7

−13.4

−3.3

−2.3

−0.3

−0.7

−0.3

−0.2

−0.1

2060

4.7

−15.9

−3.8

−2.8

−0.3

−0.7

−0.3

−0.2

−0.1

2065

4.8

−18.7

−4.2

−3.3

−0.3

−0.7

−0.3

−0.2

−0.1

2070

4.9

−21.6

−4.8

−3.8

−0.4

−0.7

−0.3

−0.2

−0.1

2075

5.0

−24.9

−5.5

−4.4

−0.4

−0.7

−0.3

−0.2

−0.1

2080

5.0

−28.6

−6.3

−5.1

−0.5

−0.7

−0.3

−0.2

−0.1

2083

4.7

−31.0

−6.8

−5.6

−0.6

−0.7

−0.3

−0.2

−0.1

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-11 Federal Spending and Revenues Under the Committee’s High Scenario, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Total

Defense

Dom Discd

Dom Mande

2008f

17.7

21.0

4.1

4.3

10.8

4.3

3.7

2.8

2009

15.5

27.6

4.8

4.8

16.8

4.8

4.1

7.9

2010

16.0

24.5

5.1

4.8

13.5

5.1

4.4

3.9

2011

17.1

23.7

5.1

4.8

12.4

5.0

4.1

3.2

2012

19.7

22.9

4.9

4.7

11.5

4.9

4.1

2.5

2013

20.4

23.2

5.1

4.7

11.4

4.8

4.0

2.5

2014

20.9

23.5

5.3

4.8

11.0

4.7

4.0

2.3

2015

21.3

23.5

5.4

4.8

10.7

4.6

3.9

2.2

2016

21.6

23.7

5.6

4.9

10.5

4.5

3.9

2.2

2017

21.9

23.7

5.7

5.0

10.3

4.4

3.8

2.1

2018

22.3

23.7

5.7

5.1

10.0

4.3

3.8

2.0

2019

22.4

24.2

6.1

5.2

10.0

4.2

3.7

2.1

2020

22.5

24.4

6.4

5.3

9.9

4.2

3.7

2.1

2021

22.6

24.6

6.6

5.4

9.9

4.2

3.7

2.1

2022

22.9

24.8

6.8

5.4

10.0

4.2

3.7

2.1

2023

22.8

25.0

7.0

5.5

9.9

4.2

3.7

2.1

2024

23.0

25.2

7.2

5.5

9.9

4.2

3.7

2.1

2025

23.4

25.6

7.4

5.6

10.0

4.2

3.7

2.1

2030

24.9

27.1

8.7

6.0

9.9

4.2

3.7

2.1

2035

25.9

28.2

9.9

6.0

9.9

4.2

3.7

2.1

2040

26.8

29.2

10.9

5.9

9.9

4.2

3.7

2.1

2045

27.6

29.8

11.7

5.8

9.8

4.1

3.6

2.1

2050

28.2

30.4

12.4

5.7

9.8

4.1

3.6

2.1

2055

28.8

31.1

13.1

5.8

9.7

4.1

3.6

2.1

2060

29.5

31.7

13.5

5.8

9.8

4.1

3.6

2.1

2065

30.0

32.3

14.1

5.9

9.7

4.1

3.6

2.1

2070

30.6

32.9

14.6

6.0

9.7

4.1

3.6

2.1

2075

31.2

33.5

15.1

6.1

9.7

4.1

3.6

2.1

2080

31.8

34.0

15.4

6.2

9.8

4.1

3.6

2.1

2083

31.7

34.0

15.4

6.2

9.8

4.1

3.6

2.1

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-12 Percentage Point Differences for Revenues and Outlays Between the Committee’s High Scenario and the Study Baseline, as Percentages of GDP

Selected Years

Revenues

Outlays (total)

Outlays (noninterest)

M and Ma

Soc Secb

Def and Domc

Total

Defense

Dom Discd

Dom Mande

2008f

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2009

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2010

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2011

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

0.0

2012

1.8

0.7

0.7

0.0

0.0

0.7

0.4

0.4

0.0

2013

2.2

1.1

1.1

0.0

0.0

1.1

0.7

0.5

0.0

2014

2.7

1.2

1.4

0.0

0.0

1.4

0.8

0.6

0.0

2015

3.0

1.2

1.4

0.0

0.0

1.4

0.9

0.6

0.0

2016

3.3

1.1

1.4

0.0

0.0

1.4

0.9

0.6

0.0

2017

3.6

1.0

1.4

0.0

0.0

1.4

0.8

0.6

0.0

2018

4.0

0.9

1.4

0.0

0.0

1.4

0.8

0.6

0.0

2019

4.1

0.7

1.4

0.0

0.0

1.4

0.8

0.7

0.0

2020

4.2

0.6

1.4

0.0

0.0

1.4

0.8

0.6

0.0

2021

4.2

0.5

1.4

0.0

0.0

1.4

0.8

0.6

0.0

2022

4.5

0.4

1.4

0.0

0.0

1.4

0.8

0.7

0.0

2023

4.4

0.2

1.4

0.0

0.0

1.4

0.8

0.6

0.0

2024

4.5

0.1

1.4

0.0

0.0

1.4

0.8

0.6

0.0

2025

4.9

0.0

1.4

0.0

0.0

1.4

0.8

0.7

0.0

2030

6.2

−1.0

1.3

−0.1

0.0

1.4

0.8

0.6

0.0

2035

7.0

−2.2

1.3

−0.1

0.0

1.4

0.8

0.6

0.0

2040

7.7

−3.6

1.3

−0.1

0.0

1.4

0.8

0.6

0.0

2045

8.3

−5.3

1.2

−0.1

0.0

1.4

0.7

0.6

0.0

2050

8.6

−7.1

1.2

−0.2

0.0

1.4

0.7

0.6

0.0

2055

9.0

−9.1

1.0

−0.3

0.0

1.3

0.7

0.6

0.0

2060

9.2

−11.5

0.7

−0.6

0.0

1.4

0.7

0.6

0.0

2065

9.4

−14.0

0.4

−1.0

0.0

1.3

0.7

0.6

0.0

2070

9.7

−16.8

0.0

−1.3

0.0

1.3

0.7

0.6

0.0

2075

10.0

−19.9

−0.5

−1.8

0.0

1.3

0.7

0.6

0.0

2080

10.2

−23.4

−1.1

−2.4

0.0

1.4

0.7

0.6

0.0

2083

9.9

−25.7

−1.6

−2.9

0.0

1.4

0.7

0.6

0.0

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic.

dDomestic discretionary.

eDomestic mandatory.

fActual spending.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×
High Spending Trajectory

Since the high spending path that is implemented in 2012 does not deviate from the study baseline until 2030, 5- and 10-year delays leave it unaffected.

Intermediate Spending Paths

For both 5- and 10-year delays, the delayed intermediate-1 spending trajectories are exactly equidistant from the delayed low and delayed intermediate-2 spending trajectories. Similarly, the delayed intermediate-2 spending trajectories are exactly equidistant from the delayed intermediate-1 and high spending trajectories.

Delayed Social Security Trajectories

A different approach is taken for the delayed Social Security trajectories, consistent with the committee’s analysis of this program (see Chapter 6 and Appendix C). In these trajectories, the execution of each of the specific, detailed policies is delayed 5 or 10 years, and the fiscal consequences are then estimated. For example, in the 5-year delay of Option 2 (two-third benefit-growth reductions; one-third payroll tax increases; see Table 6-1), the first increase of the payroll tax would be delayed 5 years to 2017, instead of occurring in 2012.

Each of the Social Security options that is implemented in 2012 achieves solvency for the program. However, as discussed in Chapter 9 (see also Tables F-17 and F-18 below), none of the delayed scenarios achieves solvency for the Social Security program.2

Delayed Defense and Other Domestic Spending Trajectories

With a 5-year delay, for all four scenarios, defense and other domestic spending follows the baseline until 2017. Mimicking the 7-year phase-in (from 2012 to 2019) for the scenarios implemented in 2012, policy changes take effect in 2017, and by 2024 spending levels are where they would have been with 2012 implementation. In other words, the delayed defense and other domestic spending paths look different from the 2012 ones until 2024, but are the same thereafter.

With a 10-year delay, for all four scenarios, defense and other domestic spending follows the baseline until 2022. Mimicking the 7-year phase-in (from 2012 to 2019) for the scenarios with 2012 implementation, policy changes take effect in 2022, and by 2029 spending levels are where they would have been with 2012 implementation. In other words, the delayed

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-13 Revenues and Outlays Under a 5-Year Delay of the Intermediate-2 Scenario, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Interest

Deficit

Debt

2012

17.9

22.2

4.9

4.7

10.8

1.7

4.3

66.4

2013

18.1

22.2

5.1

4.7

10.2

2.1

4.0

67.6

2014

18.1

22.2

5.3

4.8

9.6

2.5

4.1

69.0

2015

18.3

22.3

5.4

4.8

9.3

2.8

4.0

70.4

2016

18.3

22.6

5.6

4.9

9.1

3.0

4.3

72.1

2017

20.1

22.6

5.6

5.0

8.9

3.1

2.5

72.0

2018

20.4

22.7

5.7

5.1

8.7

3.2

2.3

69.8

2019

21.1

23.0

6.0

5.2

8.6

3.3

1.9

69.1

2020

21.5

23.1

6.2

5.3

8.4

3.2

1.6

68.1

2021

21.7

23.1

6.4

5.4

8.3

3.1

1.4

67.1

2022

21.8

22.9

6.5

5.3

8.1

3.0

1.1

65.7

2023

22.0

23.0

6.8

5.4

8.0

2.8

1.0

64.2

2024

21.9

23.0

6.9

5.4

7.8

2.8

1.1

63.0

2025

21.9

23.1

7.0

5.5

7.9

2.6

1.2

61.9

2026

21.9

23.3

7.3

5.6

7.8

2.6

1.5

61.0

2027

22.3

23.5

7.5

5.6

7.9

2.5

1.2

60.0

2028

21.6

23.8

7.7

5.7

7.8

2.5

2.2

60.0

2029

21.8

24.0

8.0

5.7

7.8

2.5

2.2

60.0

2030

22.0

24.2

8.0

5.8

7.8

2.5

2.2

60.0

2031

22.2

24.4

8.3

5.8

7.8

2.5

2.2

60.0

2032

22.3

24.6

8.4

5.8

7.8

2.5

2.3

60.0

2033

22.4

24.7

8.5

5.8

7.8

2.5

2.3

60.0

2034

22.8

25.0

8.8

5.8

7.8

2.5

2.2

60.0

2035

22.7

25.1

8.9

5.8

7.8

2.5

2.3

60.0

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic, total.

defense and other domestic spending paths look different from the 2012 ones until 2029, but are the same thereafter.

Tables F-13 through F-18 present details of the delay scenarios. Whole-budget estimates appear in Tables F-13 to F-16, while financial estimates pertaining to the Social Security trust fund appear in Tables F-17 and F-18.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-14 Revenues and Outlays Under a 10-Year Delay of the Intermediate-2 Scenario, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Interest

Deficit

Debt

2012

17.9

22.2

4.9

4.7

10.8

1.7

4.3

66.4

2013

18.1

22.2

5.1

4.7

10.2

2.1

4.0

67.6

2014

18.1

22.2

5.3

4.8

9.6

2.5

4.1

69.0

2015

18.3

22.3

5.4

4.8

9.3

2.8

4.0

70.4

2016

18.3

22.6

5.6

4.9

9.1

3.0

4.3

72.1

2017

18.3

22.7

5.7

5.0

8.9

3.1

4.3

73.8

2018

18.3

22.8

5.7

5.1

8.7

3.4

4.5

73.8

2019

18.3

23.4

6.1

5.2

8.6

3.6

5.1

76.1

2020

18.3

23.8

6.4

5.3

8.5

3.6

5.5

78.8

2021

18.4

24.1

6.6

5.4

8.5

3.7

5.7

81.7

2022

20.9

24.1

6.7

5.4

8.4

3.6

3.2

81.8

2023

22.9

24.2

7.0

5.5

8.3

3.5

1.3

79.9

2024

23.4

24.2

7.1

5.5

8.2

3.4

0.8

77.8

2025

23.6

24.1

7.2

5.6

8.1

3.2

0.4

75.4

2026

23.8

24.2

7.5

5.7

8.0

3.1

0.5

73.0

2027

23.9

24.2

7.7

5.6

7.9

3.0

0.3

70.7

2028

23.8

24.4

7.9

5.7

7.8

2.9

0.6

68.7

2029

24.1

24.6

8.2

5.8

7.8

2.8

0.4

66.5

2030

24.2

24.7

8.2

5.9

7.8

2.8

0.5

64.6

2031

24.8

24.8

8.5

5.9

7.8

2.7

0.1

62.3

2032

24.9

24.9

8.6

5.9

7.8

2.6

0.0

60.0

2033

22.7

25.0

8.7

5.9

7.8

2.5

2.3

60.0

2034

23.1

25.3

9.0

5.8

7.8

2.5

2.2

60.0

2035

23.0

25.3

9.1

5.8

7.8

2.5

2.3

60.0

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic, total.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-15 Budget Totals Resulting from 5-Year Delays of the Intermediate-1 (for Medicare and Medicaid and Social Security) and Low (for Defense and Other Domestic Spending) Scenarios, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Interest

Deficit

Debt

2012

17.9

22.2

4.9

4.7

10.8

1.7

4.3

66.4

2013

18.1

22.2

5.1

4.7

10.2

2.1

4.0

67.6

2014

18.1

22.2

5.3

4.8

9.6

2.5

4.1

69.0

2015

18.3

22.3

5.4

4.8

9.3

2.8

4.0

70.4

2016

18.3

22.6

5.6

4.9

9.1

3.0

4.3

72.1

2017

19.9

22.4

5.6

5.0

8.8

3.1

2.5

72.0

2018

20.1

22.4

5.6

5.1

8.5

3.2

2.3

69.8

2019

20.6

22.5

5.9

5.2

8.2

3.3

1.9

69.1

2020

20.8

22.4

6.1

5.3

7.9

3.2

1.6

68.1

2021

20.9

22.3

6.2

5.3

7.6

3.1

1.4

67.1

2022

20.8

21.9

6.3

5.3

7.3

3.0

1.1

65.7

2023

20.8

21.8

6.5

5.4

7.1

2.8

1.0

64.2

2024

20.5

21.6

6.6

5.4

6.8

2.8

1.1

63.0

2025

20.5

21.7

6.6

5.5

6.9

2.6

1.2

61.9

2026

20.4

21.9

6.9

5.6

6.8

2.6

1.5

61.0

2027

20.8

22.0

7.0

5.6

6.9

2.5

1.2

60.0

2028

20.0

22.2

7.2

5.6

6.8

2.5

2.2

60.0

2029

20.1

22.4

7.4

5.7

6.8

2.5

2.2

60.0

2030

20.3

22.5

7.4

5.8

6.8

2.5

2.2

60.0

2031

20.5

22.7

7.6

5.8

6.8

2.5

2.2

60.0

2032

20.5

22.8

7.7

5.8

6.8

2.5

2.3

60.0

2033

20.6

22.8

7.7

5.7

6.8

2.5

2.3

60.0

2034

20.8

23.0

8.0

5.7

6.8

2.5

2.2

60.0

2035

20.7

23.1

8.0

5.7

6.8

2.5

2.3

60.0

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic, total.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-16 Revenues and Outlays Under a 10-Year Delay of the Low Scenario, as Percentages of GDP

Selected Years

Revenues

Outlays

M and Ma

Soc Secb

Def and Domc

Interest

Deficit

Debt

2012

17.9

22.2

4.9

4.7

10.8

1.7

4.3

66.4

2013

18.1

22.2

5.1

4.7

10.2

2.1

4.0

67.6

2014

18.1

22.2

5.3

4.8

9.6

2.5

4.1

69.0

2015

18.3

22.3

5.4

4.8

9.3

2.8

4.0

70.4

2016

18.3

22.6

5.6

4.9

9.1

3.0

4.3

72.1

2017

18.3

22.7

5.7

5.0

8.9

3.1

4.3

73.8

2018

18.3

22.8

5.7

5.1

8.7

3.4

4.5

73.8

2019

18.3

23.4

6.1

5.2

8.6

3.6

5.1

76.1

2020

18.3

23.8

6.4

5.3

8.5

3.6

5.5

78.8

2021

18.4

24.1

6.6

5.4

8.5

3.7

5.7

81.7

2022

20.7

23.8

6.6

5.4

8.3

3.6

3.2

81.8

2023

22.4

23.7

6.8

5.5

8.0

3.5

1.3

79.9

2024

22.7

23.5

6.9

5.4

7.8

3.4

0.8

77.8

2025

22.6

23.0

6.8

5.5

7.6

3.2

0.4

75.4

2026

22.5

22.9

7.0

5.5

7.3

3.1

0.5

73.0

2027

22.4

22.7

7.1

5.5

7.1

3.0

0.3

70.7

2028

22.0

22.6

7.2

5.5

6.9

2.9

0.6

68.7

2029

22.1

22.5

7.4

5.6

6.8

2.8

0.4

66.5

2030

22.0

22.5

7.3

5.6

6.8

2.8

0.5

64.6

2031

22.4

22.5

7.5

5.6

6.8

2.7

0.1

62.3

2032

22.4

22.5

7.5

5.6

6.8

2.6

0.0

60.0

2033

20.2

22.4

7.5

5.6

6.8

2.5

2.3

60.0

2034

20.4

22.6

7.7

5.6

6.8

2.5

2.2

60.0

2035

20.2

22.6

7.7

5.5

6.8

2.5

2.3

60.0

aMedicare and Medicaid.

bSocial Security.

cDefense and domestic, total.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

TABLE F-17 Projected Social Security Cash Flow as Percentages of GDP: Current Law Compared with Four Committee Scenarios

Current Law and Four Scenarios

2020

2035

2050

2084

Current Law

−0.5

−1.4

−1.2

−1.5

Low (Option 1)

−0.3

−0.8

−0.2

−0.1

Delayed 5 yrs

−0.5

−0.9

−0.3

−0.1

Delayed 10 yrs

−0.5

−1.0

−0.5

−0.1

Intermediate-1 (Option 2)

−0.3

−0.8

−0.2

0.0

Delayed 5 yrs

−0.5

−0.9

−0.1

−0.1

Delayed 10 yrs

−0.5

−1.0

−0.3

−0.1

Intermediate-2 (Option 3)

−0.2

−0.7

−0.3

0.0

Delayed 5 yrs

−0.3

−0.7

−0.3

−0.1

Delayed 10 yrs

−0.5

−0.9

−0.3

−0.2

High (Option 4)

−0.2

−0.8

−0.3

−0.1

Delayed 5 yrs

−0.3

−0.8

−0.4

−0.2

Delayed 10 yrs

−0.5

−0.9

−0.4

−0.2

NOTE: A year’s “cash flow” is its Social Security revenues minus its expenditures. When the cash flow is positive, the balance in the trust fund increases (see next table). When negative, the trust fund balance decreases.

TABLE F-18 Projected Social Security Trust Fund Ratios: Current Law Compared with Four Committee Scenarios

Current Law and Four Scenarios

2020

2035

2050

2084

Current Law

315

50

0

0

Low (Option 1)

351

202

100

114

Delayed 5 yrs

322

136

0

0

Delayed 10 yrs

315

107

0

0

Intermediate-1 (Option 2)

334

178

113

157

Delayed 5 yrs

320

126

0

0

Delayed 10 yrs

315

91

0

0

Intermediate-2 (Option 3)

353

227

151

135

Delayed 5 yrs

327

164

47

0

Delayed 10 yrs

315

118

0

0

High (Option 4)

359

229

131

100

Delayed 5 yrs

329

172

42

0

Delayed 10 yrs

315

121

0

0

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
×

NOTES

  

1. As an accounting concept, OMF provides the exact relationship between the annual deficit and change in the end-of-year debt. It is unusually large and positive in 2008-2009, thus increasing the change in the debt above the deficit. The 2008-2009 OMF figures are largely swelled by financing for repayable advances to financial institutions, made to help stabilize financial markets, such as in the Troubled Asset Relief Program (TARP). As TARP payments are repaid, they appear in the OMF accounting as negative entries, thus reducing federal borrowing needs, as well as reducing increases in the debt. CBO projects that many TARP advances will be repaid in 2010-2013 and all of them by 2018, especially in the single years 2011, 2013, and 2018. In 2019, CBO projects OMF to be $18 billion, roughly the same order of magnitude as has occurred for most recent years.

  

2. Appendix C explains the indicators of program solvency. Because Tables F-17 and F-18 are to be compared with Tables C-1 and C-2 for the “on-time” scenarios, the same conventions and assumptions apply. Specifically, all four tables rely on assumptions of the 2009 Social Security Trustees’ Report, rather than the CBO-based study assumptions that are applied in the report other than Chapter 6 and Appendix C.

REFERENCE

Congressional Budget Office. (2009). The Long-Term Budget Outlook. Washington, DC: U.S. Government Printing Office.

Suggested Citation:"Appendix F: Constructing Multiple Paths to Sustainability." National Research Council. 2010. Choosing the Nation's Fiscal Future. Washington, DC: The National Academies Press. doi: 10.17226/12808.
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A mismatch between the federal government's revenues and spending, now and in the foreseeable future, requires heavy borrowing, leading to a large and increasing federal debt. That increasing debt raises a serious challenge to all of the goals that various people expect their government to pursue. It also raises questions about the nation's future wealth and whether too much debt could lead to higher interest rates and even to loss of confidence in the nation's long-term ability and commitment to honor its obligations. Many analysts have concluded that the trajectory of the federal budget set by current policies cannot be sustained.

In light of these projections, Choosing the Nation's Fiscal Future assesses the options and possibilities for a sustainable federal budget. This comprehensive book considers a range of policy changes that could help put the budget on a sustainable path: reforms to reduce the rate of growth in spending for Medicare and Medicaid; options to reduce the growth rate of Social Security benefits or raise payroll taxes; and changes in many other government spending programs and tax policies. The book also examines how the federal budget process could be revised to be more far sighted and to hold leaders accountable for responsible stewardship of the nation's fiscal future.

Choosing the Nation's Fiscal Future will provide readers with a practical framework to assess budget proposals for their consistency with long-term fiscal stability. It will help them assess what policy changes they want, consistent with their own values and their views of the proper role of the government and within the constraints of a responsible national budget. It will show how the perhaps difficult but possible policy changes could be combined to produce a wide range of budget scenarios to bring revenues and spending into alignment for the long term. This book will be uniquely valuable to everyone concerned about the current and projected fiscal health of the nation.

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