Colonel William A. Phillips

English: Federal spending as % GDP under CBO and Ryan Scenarios

Understanding the Chart

The CBO provided an analysis to Chairman Paul Ryan of the House Committee on the Budget of his budget proposal in April 2011.^[1] The chart captions are listed below, excerpted directly from the letter: "Notes: The proposal that CBO analyzed is as specified by Chairman Paul Ryan and his staff. The extended-baseline and alternative fiscal scenarios are as described in Congressional Budget Office, The Long-Term Budget Outlook (June 2010; revised August 2010). Components may not add up to totals because of rounding. a. Includes Medicare, Medicaid, exchange subsidies, and the Children's Health Insurance Program (CHIP). b. Incorporates collections of premiums paid by Medicare beneficiaries. c. Includes Medicare and Medicaid as structured under the proposal and CHIP. There are no exchange subsidies under the proposal." The National Commission on Fiscal Responsibility and Reform separately described the CBO long-term scenarios, as listed below:

"The Extended-Baseline Scenario generally assumes continuation of current law. The Alternative Fiscal Scenario incorporates several changes to current law considered likely to happen, including the renewal of the 2001/2003 tax cuts on income below $250,000 per year, continued Alternative Minimum Tax (AMT) patches, the continuation of the estate tax at 2009 levels, and continued Medicare “Doc Fixes.” The Alternative Fiscal Scenario also assumes discretionary spending grows with Gross Domestic Product (GDP) rather than to inflation over the next decade, that revenue does not increase as a percent of GDP after 2020, and that certain cost-reducing measures in the health reform legislation are unsuccessful in slowing cost growth after 2020."^[2]