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Federal Spending for Means-Tested Programs, 2007 to 2027 1 (February 15, 2017)

handle is hein.congrec/cbo3327 and id is 1 raw text is: F EBRUAR Y2017 Federal Spending for Means-Tested Programs, 2007 to 2027 In January 2017, the Congressional Budget Office pro- jected that if current laws generally remained unchanged, total mandatory spending (excluding offsetting receipts) would grow at an average annual rate of 5.5 percent over the coming decade, which is close to the 5.3 percent average annual rate of growth recorded over the past 10 years.' Mandatory spending on means-tested pro- grams (which provide cash payments or other forms of assistance to people with relatively low income or few assets) is projected to grow more slowly than spending for non-means-tested programs. CBO projects that under current law, outlays for mandatory means-tested pro- grams would grow over the next decade at an average annual rate of 4.3 percent, whereas spending for manda- tory non-means-tested programs would grow at an aver- age annual rate of 6.0 percent (see Table 1).2 Among the mandatory programs, the largest means-tested ones are Medicaid, the earned income and child tax credits (which 1. See Congressional Budget Office, The Budget and Economic Outlook: 2017 to 2027, www.cbo.gov/publication/52370. Mandatory spending is governed by statutory criteria and is not normally controlled by the annual appropriation process. 2. The tables in this report exclude discretionary means-tested programs (such as the Section 8 housing assistance programs and the Low Income Home Energy Assistance Program), which are controlled by annual appropriation acts. However, each table shows discretionary spending for the Federal Pell Grant Program as a memorandum item because that program has discretionary and mandatory components and the amount of the mandatory component depends in part on the amount of discretionary funding. Spending for the student loan program is generally not considered to be means-tested, although that program has means- tested components. are refundable), the Supplemental Nutrition Assistance Program (SNAP), and Supplemental Security Income. The largest non-means-tested programs are Social Security, most of Medicare, and civilian and military retirement programs. In CBO's baseline, average annual growth in outlays for means-tested programs for the 2018-2027 period is well below the 6.8 percent the agency estimates for the same programs over the 2008-2017 period (see Table 2). In contrast, the rate of growth projected for non-means- tested programs (which CBO estimates will have grown at an average rate of 4.8 percent between 2008 and 2017) is roughly one percentage point higher over the coming decade, largely because of the aging of the population. Several mandatory programs have been or are scheduled to be significantly affected by changes in law. The 2007- 2009 recession and the ensuing recovery also have exerted 3. Average annual growth rates for the projection period are affected (as they have been in past years) by shifts in the timing of certain payments, although those effects, on net, are small. Because October 1, 2016, fell on a weekend, an estimated $37 billion in mandatory payments that were due on that day were instead made at the end of September 2016. As a result, mandatory outlays in 2017 were reduced (and outlays in 2016 were increased) by the amount of those payments. Similarly, mandatory outlays in 2017 will be boosted by the shift of an estimated $41 billion in payments from fiscal year 2018 to 2017 because October 1, 2017, also falls on a weekend. All told, outlays in 2017 will be $4 billion higher, on net, as a result of those shifts. October 1, 2006, also fell on a weekend, thereby reducing mandatory outlays in 2007 by $3 billion. Notes: Unless otherwise specified, all years referred to in this report are federal fiscal years, which run from October 1 to September 30 and are designated by the calendar year in which they end. Numbers in the text and tables may not add up to totals because of rounding.

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