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Letter to the Honorable Tom Price Regarding Spending for Means-Tested Programs 1 (March 13, 2015)

handle is hein.congrec/cbo2120 and id is 1 raw text is: d CONGRESSIONAL BUDGET OFFICE Douglas W. Elmendorf, Director U.S. Congress Washington, DC 20515 March 13, 2015 Honorable Tom Price, M.D. Chairman Committee on the Budget U.S. House of Representatives Washington DC 20515 Re: Spending for Means-Tested Programs Dear Mr. Chairman: As you requested, enclosed are two tables that show federal spending for each of the government's major mandatory spending programs and tax credits that are primarily means-tested (that is, spending programs and tax credits that provide cash payments or other forms of assistance to people with relatively low income or few assets). Table 1 shows the Congressional Budget Office's January 2015 baseline projections for the 2015-2025 period; Table 2 shows historical spending data from 2005 through 2014, along with CBO's estimates for 2015. The tables also include a line showing total spending for mandatory programs that are primarily not means-tested. Some of those programs have means-tested components (for example, student loans), but the tables do not show separate entries for such programs. They also do not include means-tested programs that are discretionary (for example, the Section 8 housing assistance programs and the Low Income Home Energy Assistance Program). However, the tables show discretionary spending for the Pell Grant program as a memorandum item because that program has both discretionary and mandatory components and the amount of the mandatory Pell Grant component depends in part on the annual amount of discretionary funding. In the projections that CBO published in The Budget and Economic Outlook: 2015 to 2025 in January 2015, mandatory outlays for means-tested programs are projected to grow over the next decade at an average annual rate of 4.6 percent, compared with an average rate of 5.5 percent for non-means-tested programs, which include, for example, Social Security, most of Medicare, and civilian and military retirement programs (see Table 1).' 1 CBO published Updated Budget Projections: 2015 to 2025 in March 2015; some of the amounts shown in Table 1 are different in the March baseline, but at the request of the committee staff, these tables show the projections from the January baseline. In total, for mandatory spending, the differences between the two baselines are small, and the average annual growth rates over the 2016-2025 period are very similar-5.3 percent in the January projections versus 5.2 percent in the March baseline.

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