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Because this work may contain copyrighted images or other material, permission from the copyright holder may be necessary if you wish to reproduce this material separately. Comptroller General’s Remarks to the Senate Centrist Coalition: The Honorable David M. Walker: Comptroller General of the United States: February 1, 2005: Washington, DC: GAO's Strategic Plan: [See PDF for image] - graphic text: Serving the Congress and the Nation: GAO's Strategic Plan Framework: Mission: GAO exists to support the Congress in meeting its constitutional responsibilities and to help improve the performance and ensure the accountability of the federal government for the benefit of the American people. Themes: * Long-term Fiscal Imbalance; * National Security; * Global interdependence; * Changing Economy; * Demographics; * Science and Technology; * Quality of Life; * Governance; Goals and Objectives: Provide Timely, Quality Service to the Congress and the Federal Government to Address Current and Emerging Challenges to the Well-Being and Financial Security of the American People related to: * Health care needs and financing; * Education and protection of children; * Work opportunities and worker protection; * Retirement income security; * Effective system of justice; * Viable communities; * Natural resources use and environmental protection; * Physical infrastructure; Respond to Changing Security Threats and the Challenges of Global Interdependence involving: * Emerging threats; * Military capabilities and readiness; * Advancement of U.S. interests; * Global market forces; Help Transform the Federal Government's Role and How It Does Business to Meet 21st Century Challenges by assessing: * Roles in achieving federal objectives; * Government transformation; * Key management challenges and program risks; * Fiscal position and financing of the government; Maximize the Value of GAO by Being a Model Federal Agency and a World- Class Professional Services Organization in the areas of: * Client and customer service; * Strategic leadership; * Institutional knowledge and experience; * Process improvement; * Employer of choice; Core Values: * Accountability; * Integrity; * Reliability; Source: GAO. GAO Strategic Plan 2004-2009. [End of strategic plan framework] GAO’s High-Risk List: 2005: Addressing Challenges in Broad-based Transformations: High-Risk Areas: Protecting the Federal Government's Information Systems and the Nation's Critical Infrastructures; Year Designated High Risk: 1997. High-Risk Areas: Strategic Human Capital Management[A]; Year Designated High Risk: 2001. High-Risk Areas: U.S. Postal Service Transformation Efforts and Long- Term Outlook[A]; Year Designated High Risk: 2001. High-Risk Areas: Managing Federal Real Property[A]; Year Designated High Risk: 2003. High-Risk Areas: Implementing and Transforming the Department of Homeland Security; Year Designated High Risk: 2003. High-Risk Areas: Establishing Appropriate and Effective Information- Sharing Mechanisms to Improve Homeland Security; Year Designated High Risk: 2005. High-Risk Areas: DOD Approach to Business Transformation[A]; Year Designated High Risk: 2005. High-Risk Areas: DOD Approach to Business Transformation[A]: DOD Supply Chain Management (formerly Inventory Management); Year Designated High Risk: 1990. High-Risk Areas: DOD Approach to Business Transformation[A]: DOD Weapon Systems Acquisition; Year Designated High Risk: 1990. High-Risk Areas: DOD Approach to Business Transformation[A]: DOD Business Systems Modernization; Year Designated High Risk: 1995. High-Risk Areas: DOD Approach to Business Transformation[A]: DOD Financial Management; Year Designated High Risk: 1995. High-Risk Areas: DOD Approach to Business Transformation[A]: DOD Support Infrastructure Management; Year Designated High Risk: 1997. High-Risk Areas: DOD Approach to Business Transformation[A]: DOD Personnel Security Clearance Program; Year Designated High Risk: 2005. Managing Federal Contracting More Effectively: High-Risk Areas: DOE Contract Management; Year Designated High Risk: 1990. High-Risk Areas: NASA Contract Management; Year Designated High Risk: 1990. High-Risk Areas: DOD Contract Management; Year Designated High Risk: 1992. Management of Interagency Contracting; Year Designated High Risk: 2005. Assessing the Efficiency and Effectiveness of Tax Law Administration: High-Risk Areas: Enforcement of Tax Laws[A, B]; Year Designated High Risk: 1990. High-Risk Areas: IRS Business Systems Modernization[C]; Year Designated High Risk: 1995. Modernizing and Safeguarding Insurance and Benefit Programs: High-Risk Areas: Medicare Program[A]; Year Designated High Risk: 1990. High-Risk Areas: HUD Single-Family Mortgage Insurance and Rental Housing Assistance Programs; Year Designated High Risk: 1994. High-Risk Areas: Medicaid Program[A]; Year Designated High Risk: 2003. High-Risk Areas: Modernizing Federal Disability Programs[A]; Year Designated High Risk: 2003. High-Risk Areas: Pension Benefit Guaranty Corporation Single-Employer Insurance Program[A]; Year Designated High Risk: 2003. Other: High-Risk Areas: FAA Air Traffic Control Modernization; Year Designated High Risk: 1995. [A] Legislation is likely to be necessary, as a supplement to actions by the executive branch, in order to effectively address this high-risk area. [B] Two high-risk areas-Collection of Unpaid Taxes and Earned Income Credit Noncompliance-have been consolidated to make this area. [C] The IRS Financial Management high-risk area has been incorporated into this high-risk area. [End of table] Composition of Federal Spending: [See PDF for image] - graphic text 3 pie charts with 5 items each. 1964: Defense: 46.0%. Social Security: 14.0%. Medicare & Medicaid: 0%. Net interest: 7.0%. All other spending: 33.0%. 1984: Defense: 27.0%. Social Security: 21.0%. Medicare & Medicaid: 9.0%. Net interest: 13.0%. All other spending: 30.0%. 2004*: Defense: 20.0%. Social Security: 21.0%. Medicare & Medicaid: 20.0%. Net interest: 7.0%. All other spending: 33.0%. * Current services estimate. Note: Numbers may not add to 100 percent due to rounding. Source: Budget of the United States Government, Fiscal Year 2005 (February 2004) and Budget of the United States Government, Fiscal Year 2005, Mid-session Review (July 2004), Office of Management and Budget. [End of figure] Federal Spending for Mandatory and Discretionary Programs: [See PDF for image] - graphic text 3 pie charts with 3 items each. 1964: Discretionary: 67%; Mandatory: 26%; Net Interest: 7%. 1984: Discretionary: 45%; Mandatory: 42%; Net Interest: 13%. 2004*: Discretionary: 39%; Mandatory: 54%; Net Interest: 7%. * Current services estimate. Note: Numbers may not add to 100 percent due to rounding. Source: Budget of the United States Government, Fiscal Year 2005 (February 2004) and Budget of the United States Government, Fiscal Year 2005, Mid-session Review (July 2004), Office of Management and Budget. [End of figure] Fiscal Year 2004 Deficit Numbers: On-Budget Deficit; -$568 Billion; -4.9% of GDP. Social Security Surplus; $151 Billion; 1.3% of GDP. Unified Deficit; -$413 Billion; -3.6% of GDP. [End of table] Surplus or Deficit as a Share of GDP: Fiscal Years 1962-2004: [See PDF for image] - graphic text: Line/Stacked Bar combo chart with 1 line (Unified) and 43 bars. Fiscal year: 1962; On-budget: -1%; Off-budget: -0.2%; Unified: -1.3%. Fiscal year: 1963; On-budget: -0.7%; Off-budget: -0.1%; Unified: -0.8%. Fiscal year: 1964; On-budget: -1%; Off-budget: 0.1%; Unified: -0.9%. Fiscal year: 1965; On-budget: -0.2%; Off-budget: No data; Unified: -0.2%. Fiscal year: 1966; On-budget: -0.4%; Off-budget: -0.1%; Unified: -0.5%. Fiscal year: 1967; On-budget: -1.6%; Off-budget: 0.5%; Unified: -1.1%. Fiscal year: 1968; On-budget: -3.2%; Off-budget: 0.3%; Unified: -2.9%. Fiscal year: 1969; On-budget: -0.1%; Off-budget: 0.4%; Unified: 0.3%. Fiscal year: 1970; On-budget: -0.9%; Off-budget: 0.6%; Unified: -0.3%. Fiscal year: 1971; On-budget: -2.4%; Off-budget: 0.3%; Unified: -2.1%. Fiscal year: 1972; On-budget: -2.2%; Off-budget: 0.3%; Unified: -2%. Fiscal year: 1973; On-budget: -1.2%; Off-budget: No data; Unified: -1.1%. Fiscal year: 1974; On-budget: -0.6%; Off-budget: 0.1%; Unified: -0.4%. Fiscal year: 1975; On-budget: -3.5%; Off-budget: 0.1%; Unified: -3.4%. Fiscal year: 1976; On-budget: -4.1%; Off-budget: -0.2%; Unified: -4.2%. Fiscal year: 1977; On-budget: -2.5%; Off-budget: -0.2%; Unified: -2.7%. Fiscal year: 1978; On-budget: -2.5%; Off-budget: -0.2%; Unified: -2.7%. Fiscal year: 1979; On-budget: -1.5%; Off-budget: -0.1%; Unified: -1.6%. Fiscal year: 1980; On-budget: -2.7%; Off-budget: No data; Unified: -2.7%. Fiscal year: 1981; On-budget: -2.4%; Off-budget: -0.2%; Unified: -2.6%. Fiscal year: 1982; On-budget: -3.7%; Off-budget: -0.2%; Unified: -4%. Fiscal year: 1983; On-budget: -6%; Off-budget: No data; Unified: -6%. Fiscal year: 1984; On-budget: -4.8%; Off-budget: No data; Unified: -4.8%. Fiscal year: 1985; On-budget: -5.3%; Off-budget: 0.2%; Unified: -5.1%. Fiscal year: 1986; On-budget: -5.4%; Off-budget: 0.4%; Unified: -5%. Fiscal year: 1987; On-budget: -3.6%; Off-budget: 0.4%; Unified: -3.2%. Fiscal year: 1988; On-budget: -3.9%; Off-budget: 0.8%; Unified: -3.1%. Fiscal year: 1989; On-budget: -3.8%; Off-budget: 1%; Unified: -2.8%. Fiscal year: 1990; On-budget: -4.8%; Off-budget: 1%; Unified: -3.9%. Fiscal year: 1991; On-budget: -5.4%; Off-budget: 0.9%; Unified: -4.5%. Fiscal year: 1992; On-budget: -5.5%; Off-budget: 0.8%; Unified: -4.7%. Fiscal year: 1993; On-budget: -4.6%; Off-budget: 0.7%; Unified: -3.9%. Fiscal year: 1994; On-budget: -3.7%; Off-budget: 0.8%; Unified: -2.9%. Fiscal year: 1995; On-budget: -3.1%; Off-budget: 0.9%; Unified: -2.2%. Fiscal year: 1996; On-budget: -2.3%; Off-budget: 0.9%; Unified: -1.4%. Fiscal year: 1997; On-budget: -1.3%; Off-budget: 1%; Unified: -0.3%. Fiscal year: 1998; On-budget: -0.3%; Off-budget: 1.1%; Unified: 0.8%. Fiscal year: 1999; On-budget: No data; Off-budget: 1.4%; Unified: 1.4%. Fiscal year: 2000; On-budget: 0.9%; Off-budget: 1.5%; Unified: 2.4%. Fiscal year: 2001; On-budget: -0.3%; Off-budget: 1.6%; Unified: 1.3%. Fiscal year: 2002; On-budget: -3.1%; Off-budget: 1.5%; Unified: -1.5%. Fiscal year: 2003; On-budget: -4.9%; Off-budget: 1.5%; Unified: -3.5%. Fiscal year: 2004; On-budget: -4.9%; Off-budget: 1.3%; Unified: -3.6%. Source: Office of Management and Budget and Congressional Budget Office. [End of figure] Selected Fiscal Exposures: Sources and Examples 2004[A]: Type: Explicit liabilities; Example (dollars in billions): Publicly held debt ($4,297); Type: Explicit liabilities; Example (dollars in billions): Military and civilian pension and post- retirement health ($3,059). Type: Explicit liabilities; Example (dollars in billions): Veterans benefits payable ($925). Type: Explicit liabilities; Example (dollars in billions): Environmental and disposal liabilities ($249). Type: Explicit liabilities; Example (dollars in billions): Loan guarantees ($43). Type: Explicit financial commitments; Example (dollars in billions): Undelivered orders ($596). Type: Explicit financial commitments; Example (dollars in billions): Long-term leases ($39). Type: Financial contingencies; Example (dollars in billions): Unadjudicated claims ($4). Type: Financial contingencies; Example (dollars in billions): Pension Benefit Guaranty Corporation ($96). Type: Financial contingencies; Example (dollars in billions): Other national insurance programs ($1). Type: Financial contingencies; Example (dollars in billions): Government corporations e.g., Ginnie Mae. Type: Exposures implied by current policies or the public's expectations about the role of government; Example (dollars in billions): Debt held by government accounts ($3,071)[B]. Type: Exposures implied by current policies or the public's expectations about the role of government; Example (dollars in billions): Future Social Security benefit payments ($3,699)[C]. Type: Exposures implied by current policies or the public's expectations about the role of government; Example (dollars in billions): Future Medicare Part A benefit payments ($8,236)[C]. Type: Exposures implied by current policies or the public's expectations about the role of government; Example (dollars in billions): Future Medicare Part B benefit payments ($11,416)[C]. Type: Exposures implied by current policies or the public's expectations about the role of government; Example (dollars in billions): Future Medicare Part D benefit payments ($8,119) [C]. Type: Exposures implied by current policies or the public's expectations about the role of government; Example (dollars in billions): Life cycle cost including deferred and future maintenance and operating costs (amount unknown). Type: Exposures implied by current policies or the public's expectations about the role of government; Example (dollars in billions): Government Sponsored Enterprises e.g., Fannie Mae and Freddie Mac. [A] All figures are for end of fiscal year 2004, except Social Security and Medicare estimates, which are as of January 1, 2004. [B] This amount includes $845 billion held by military and civilian pension funds that would offset the explicit liabilities reported by those funds. [C] Figures for Social Security and Medicare are net of debt held by the trust funds ($1,531 billion for Social Security, $256 billion for Medicare Part A, and $24 billion for Medicare Part B) and represent net present value estimates over a 75-year period. Over an infinite horizon, the estimate for Social Security would be $10.4 trillion, $21.8 trillion for Medicare Part A, $23.2 trillion for Medicare Part B, and $16.5 trillion for Medicare Part D. Source: GAO analysis of data from the Department of the Treasury, the Office of the Chief Actuary, Social Security Administration, and the Office of the Actuary, Centers for Medicare and Medicaid Services. Updated 1/25/05. [End of table] Another Way to Think About These Numbers: * Debt held by the public—$4.3T; * Trust fund debt—$3.1T; * Gross debt—$7.4T; * Gross debt per person—about $25,000; If we add everything on the previous slide that is not included in gross debt, the burden rises to more than $145,000 per person or more than $350,000 per full-time worker. Alternatively, it amounts to a total unfunded burden of more than $43 trillion in current dollars, which is about 19 times the current annual federal budget or about 4 times the current annual GDP. Note: The calculations are based on 75-year projections for Social Security and Medicare. Updated 12/17/04. Composition of Spending as a Share of GDP Under Baseline Extended: [See PDF for image] -graphic text Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars per group. 2004; All other spending; Percent of GDP: 10.3%; Medicare & Medicaid; Percent of GDP: 3.8%; Social Security; Percent of GDP: 4.3%; Net interest; Percent of GDP: 1.4%; Revenue; Percent of GDP: 16.3%. 2015; All other spending; Percent of GDP: 7.6%; Medicare & Medicaid; Percent of GDP: 5.2%; Social Security; Percent of GDP: 4.7%; Net interest; Percent of GDP: 1.5%; Revenue; Percent of GDP: 19.6%. 2030; All other spending; Percent of GDP: 7.6%; Medicare & Medicaid; Percent of GDP: 8.1%; Social Security; Percent of GDP: 6.6%; Net interest; Percent of GDP: 2.1%; Revenue; Percent of GDP: 19.6%. 2040; All other spending; Percent of GDP: 7.6%; Medicare & Medicaid; Percent of GDP: 9.9%; Social Security; Percent of GDP: 7.2%; Net interest; Percent of GDP: 4.8%; Revenue; Percent of GDP: 19.6%. Notes: Although expiring tax provisions are extended, revenue as a share of GDP increases through 2015 due to (1) real bracket creep, (2) more taxpayers becoming subject to the AMT, and (3) increased revenue from tax-deferred retirement accounts. After 2015, revenue as a share of GDP is held constant. Source: GAO’s January 2005 analysis. [End of figure] Composition of Spending as a Share of GDP Assuming Discretionary Spending Grows with GDP After 2004 and All Expiring Tax Provisions Are Extended: [See PDF for image] -graphic text Line/Stacked Bar combo chart with 4 groups, 1 line (Revenue) and 4 bars per group. 2004; All other spending; Percent of GDP: 10.3%; Medicare & Medicaid; Percent of GDP: 3.8%; Social Security; Percent of GDP: 4.3%; Net interest; Percent of GDP: 1.4%; Revenue; Percent of GDP: 16.3%. 2015; All other spending; Percent of GDP: 9.7%; Medicare & Medicaid; Percent of GDP: 5.2%; Social Security; Percent of GDP: 4.8%; Net interest; Percent of GDP: 2.8%; Revenue; Percent of GDP: 17.4%. 2030; All other spending; Percent of GDP: 9.7%; Medicare & Medicaid; Percent of GDP: 8.1%; Social Security; Percent of GDP: 7.0%; Net interest; Percent of GDP: 8.0%; Revenue; Percent of GDP: 17.4%. 2040; All other spending; Percent of GDP: 9.7%; Medicare & Medicaid; Percent of GDP: 9.9%; Social Security; Percent of GDP: 8.4%; Net interest; Percent of GDP: 16.6%; Revenue; Percent of GDP: 17.4%. Notes: Although expiring tax provisions are extended, revenue as a share of GDP increases through 2015 due to (1) real bracket creep, (2) more taxpayers becoming subject to the AMT, and (3) increased revenue from tax-deferred retirement accounts. After 2015, revenue as a share of GDP is held constant. Source: GAO’s January 2005 analysis. [End of figure] Current Fiscal Policy is Unsustainable: The “Status Quo” is Not an Option: * We face large and growing structural deficits largely due to known demographic trends and rising health care costs. * GAO’s simulations show that balancing the budget in 2040 could require actions as large as: - Cutting total federal spending by about 60 percent or - Raising taxes to about 2.5 times today's level. Faster Economic Growth Can Help, but It Cannot Solve the Problem: * Closing the current long-term fiscal gap based on responsible assumptions would require real average annual economic growth in the double digit range every year for the next 75 years. * During the 1990s, the economy grew at an average 3.2 percent per year. * As a result, we cannot simply grow our way out of this problem. Tough choices will be required. The Sooner We Get Started, the Better: * Less change would be needed, and there would be more time to make adjustments. * The miracle of compounding would work with us rather than against us. * Our demographic changes will serve to make reform more difficult over time. The Way Forward: * Implement new accounting and reporting approaches and new budget control mechanisms for considering the impact of spending and tax policies and decisions over the long term. * Develop new metrics for measuring the impact of policies and decisions over the long term (e.g., key national indicators to measure our Nation’s position and progress over time and in relation to other countries). * Reexamine the base—question existing programs, policies and activities. Social Security and Medicare’s Hospital Insurance Trust Funds Face Cash Deficits: [See PDF for image] –graphic text: Stacked bar chart with 2 items. Billions of 2004 dollars: Year: 2000; Medicare HI cash flow: $26.31; Social Security cash flow: $95.75. Year: 2001; Medicare HI cash flow: $18.06; Social Security cash flow: $94.70. Year: 2002; Medicare HI cash flow: $11.91; Social Security cash flow: $88.01. Year: 2003; Medicare HI cash flow: $6.14; Social Security cash flow: $68.72. Year: 2004; Medicare HI cash flow: -$7.25; Social Security cash flow: $64.40. Medicare HI cash deficit: 2004. Year: 2005; Medicare HI cash flow: -$7.20; Social Security cash flow: $86.40. Year: 2006; Medicare HI cash flow: -$9.25; Social Security cash flow: $93.10. Year: 2007; Medicare HI cash flow: -$10.23; Social Security cash flow: $98.00. Year: 2008; Medicare HI cash flow: -$11.18; Social Security cash flow: $99.10. Year: 2009; Medicare HI cash flow: -$12.78; Social Security cash flow: $92.50. Year: 2010; Medicare HI cash flow: -$14.81; Social Security cash flow: $88.50. Year: 2011; Medicare HI cash flow: -$16.35; Social Security cash flow: $84.30. Year: 2012; Medicare HI cash flow: -$18.59; Social Security cash flow: $74.20. Year: 2013; Medicare HI cash flow: -$22.53; Social Security cash flow: $61.90. Year: 2014; Medicare HI cash flow: -$25.79; Social Security cash flow: $49.40. Year: 2015; Medicare HI cash flow: -$31.01; Social Security cash flow: $35.00. Year: 2016; Medicare HI cash flow: -$36.70; Social Security cash flow: $19.00. Year: 2017; Medicare HI cash flow: -$43.13; Social Security cash flow: $1.70. Year: 2018; Medicare HI cash flow: -$50.37; Social Security cash flow: -$16.20. Social Security cash deficit: 2018. Year: 2019; Medicare HI cash flow: -$58.59; Social Security cash flow: -$35.90. Year: 2020; Medicare HI cash flow: -$67.30; Social Security cash flow: -$56.30. Year: 2021; Medicare HI cash flow: -$77.09; Social Security cash flow: -$77.10. Year: 2022; Medicare HI cash flow: -$87.64; Social Security cash flow: -$97.80. Year: 2023; Medicare HI cash flow: -$99.15; Social Security cash flow: -$119.10. Year: 2024; Medicare HI cash flow: -$111.45; Social Security cash flow: -$140.10. Year: 2025; Medicare HI cash flow: -$124.49; Social Security cash flow: -$161.30. Year: 2026; Medicare HI cash flow: -$137.93; Social Security cash flow: -$182.00. Year: 2027; Medicare HI cash flow: -$151.64; Social Security cash flow: -$202.00. Year: 2028; Medicare HI cash flow: -$165.94; Social Security cash flow: -$221.20. Year: 2029; Medicare HI cash flow: -$182.61; Social Security cash flow: -$238.90. Year: 2030; Medicare HI cash flow: -$199.45; Social Security cash flow: -$255.80. Year: 2031; Medicare HI cash flow: -$216.12; Social Security cash flow: -$272.20. Year: 2032; Medicare HI cash flow: -$233.12; Social Security cash flow: -$287.70. Year: 2033; Medicare HI cash flow: -$250.96; Social Security cash flow: -$301.60. Year: 2034; Medicare HI cash flow: -$269.80; Social Security cash flow: -$314.10. Year: 2035; Medicare HI cash flow: -$289.29; Social Security cash flow: -$325.20. Year: 2036; Medicare HI cash flow: -$308.47; Social Security cash flow: -$335.10. Year: 2037; Medicare HI cash flow: -$327.27; Social Security cash flow: -$343.80. Year: 2038; Medicare HI cash flow: -$346.18; Social Security cash flow: -$351.20. Year: 2039; Medicare HI cash flow: -$365.42; Social Security cash flow: -$357.80. Year: 2040; Medicare HI cash flow: -$384.94; Social Security cash flow: -$364.00. Source: GAO analysis based on the intermediate assumptions of The 2004 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and the Federal Disability Insurance Trust Funds and The 2004 Annual Report of the Boards of Trustees of the Federal Hospital Insurance and Federal Supplementary Medical Insurance Trust Funds. The above excludes Medicare Part B and the newly enacted Medicare Part D benefit. [End of figure] Social Security, Medicare, and Medicaid Spending as a Percent of GDP: [See PDF for image] – graphic text Area graph with 81 Groups and 3 items per Group. Group 1, 2000, Total value: 7.75% of GDP. Item 1, Medicare value: 2.29% of GDP, which is 29.5% of 2000 spending. Item 2, Medicaid value: 1.23% of GDP, which is 15.9% of 2000 spending. Item 3, Social Security value: 4.23% of GDP, which is 54.6% of 2000 spending. Group 2, 2001, Total value: 8.14% of GDP. Item 1, Medicare value: 2.46% of GDP, which is 30.2% of 2001 spending. Item 2, Medicaid value: 1.33% of GDP, which is 16.3% of 2001 spending. Item 3, Social Security value: 4.35% of GDP, which is 53.4% of 2001 spending. Group 3, 2002, Total value: 8.4% of GDP. Item 1, Medicare value: 2.55% of GDP, which is 30.4% of 2002 spending. Item 2, Medicaid value: 1.44% of GDP, which is 17.1% of 2002 spending. Item 3, Social Security value: 4.41% of GDP, which is 52.5% of 2002 spending. Group 4, 2003, Total value: 8.44% of GDP. Item 1, Medicare value: 2.59% of GDP, which is 30.7% of 2003 spending. Item 2, Medicaid value: 1.49% of GDP, which is 17.7% of 2003 spending. Item 3, Social Security value: 4.36% of GDP, which is 51.7% of 2003 spending. Group 5, 2004, Total value: 8.52% of GDP. Item 1, Medicare value: 2.68% of GDP, which is 31.5% of 2004 spending. Item 2, Medicaid value: 1.51% of GDP, which is 17.7% of 2004 spending. Item 3, Social Security value: 4.33% of GDP, which is 50.8% of 2004 spending. Group 6, 2005, Total value: 8.52% of GDP. Item 1, Medicare value: 2.76% of GDP, which is 32.4% of 2005 spending. Item 2, Medicaid value: 1.48% of GDP, which is 17.4% of 2005 spending. Item 3, Social Security value: 4.28% of GDP, which is 50.2% of 2005 spending. Group 7, 2006, Total value: 9.16% of GDP. Item 1, Medicare value: 3.44% of GDP, which is 37.6% of 2006 spending. Item 2, Medicaid value: 1.47% of GDP, which is 16.0% of 2006 spending. Item 3, Social Security value: 4.25% of GDP, which is 46.4% of 2006 spending. Group 8, 2007, Total value: 9.23% of GDP. Item 1, Medicare value: 3.51% of GDP, which is 38.0% of 2007 spending. Item 2, Medicaid value: 1.49% of GDP, which is 16.1% of 2007 spending. Item 3, Social Security value: 4.23% of GDP, which is 45.8% of 2007 spending. Group 9, 2008, Total value: 9.34% of GDP. Item 1, Medicare value: 3.56% of GDP, which is 38.1% of 2008 spending. Item 2, Medicaid value: 1.54% of GDP, which is 16.5% of 2008 spending. Item 3, Social Security value: 4.24% of GDP, which is 45.4% of 2008 spending. Group 10, 2009, Total value: 9.49% of GDP. Item 1, Medicare value: 3.61% of GDP, which is 38.0% of 2009 spending. Item 2, Medicaid value: 1.6% of GDP, which is 16.9% of 2009 spending. Item 3, Social Security value: 4.28% of GDP, which is 45.1% of 2009 spending. Group 11, 2010, Total value: 9.64% of GDP. Item 1, Medicare value: 3.66% of GDP, which is 38.0% of 2010 spending. Item 2, Medicaid value: 1.66% of GDP, which is 17.2% of 2010 spending. Item 3, Social Security value: 4.32% of GDP, which is 44.8% of 2010 spending. Group 12, 2011, Total value: 9.82% of GDP. Item 1, Medicare value: 3.72% of GDP, which is 37.9% of 2011 spending. Item 2, Medicaid value: 1.73% of GDP, which is 17.6% of 2011 spending. Item 3, Social Security value: 4.37% of GDP, which is 44.5% of 2011 spending. Group 13, 2012, Total value: 10.06% of GDP. Item 1, Medicare value: 3.81% of GDP, which is 37.9% of 2012 spending. Item 2, Medicaid value: 1.8% of GDP, which is 17.9% of 2012 spending. Item 3, Social Security value: 4.45% of GDP, which is 44.2% of 2012 spending. Group 14, 2013, Total value: 10.34% of GDP. Item 1, Medicare value: 3.93% of GDP, which is 38.0% of 2013 spending. Item 2, Medicaid value: 1.87% of GDP, which is 18.1% of 2013 spending. Item 3, Social Security value: 4.54% of GDP, which is 43.9% of 2013 spending. Group 15, 2014, Total value: 10.6% of GDP. Item 1, Medicare value: 4.07% of GDP, which is 38.4% of 2014 spending. Item 2, Medicaid value: 1.9% of GDP, which is 17.9% of 2014 spending. Item 3, Social Security value: 4.63% of GDP, which is 43.7% of 2014 spending. Group 16, 2015, Total value: 10.88% of GDP. Item 1, Medicare value: 4.24% of GDP, which is 39.0% of 2015 spending. Item 2, Medicaid value: 1.9% of GDP, which is 17.5% of 2015 spending. Item 3, Social Security value: 4.74% of GDP, which is 43.6% of 2015 spending. Group 17, 2016, Total value: 11.15% of GDP. Item 1, Medicare value: 4.4% of GDP, which is 39.5% of 2016 spending. Item 2, Medicaid value: 1.9% of GDP, which is 17.0% of 2016 spending. Item 3, Social Security value: 4.85% of GDP, which is 43.5% of 2016 spending. Group 18, 2017, Total value: 11.41% of GDP. Item 1, Medicare value: 4.55% of GDP, which is 39.9% of 2017 spending. Item 2, Medicaid value: 1.9% of GDP, which is 16.7% of 2017 spending. Item 3, Social Security value: 4.96% of GDP, which is 43.5% of 2017 spending. Group 19, 2018, Total value: 11.69% of GDP. Item 1, Medicare value: 4.72% of GDP, which is 40.4% of 2018 spending. Item 2, Medicaid value: 1.9% of GDP, which is 16.3% of 2018 spending. Item 3, Social Security value: 5.07% of GDP, which is 43.4% of 2018 spending. Group 20, 2019, Total value: 12% of GDP. Item 1, Medicare value: 4.89% of GDP, which is 40.8% of 2019 spending. Item 2, Medicaid value: 1.92% of GDP, which is 16.0% of 2019 spending. Item 3, Social Security value: 5.19% of GDP, which is 43.3% of 2019 spending. Group 21, 2020, Total value: 12.35% of GDP. Item 1, Medicare value: 5.08% of GDP, which is 41.1% of 2020 spending. Item 2, Medicaid value: 1.95% of GDP, which is 15.8% of 2020 spending. Item 3, Social Security value: 5.32% of GDP, which is 43.1% of 2020 spending. Group 22, 2021, Total value: 12.69% of GDP. Item 1, Medicare value: 5.26% of GDP, which is 41.4% of 2021 spending. Item 2, Medicaid value: 1.99% of GDP, which is 15.7% of 2021 spending. Item 3, Social Security value: 5.44% of GDP, which is 42.9% of 2021 spending. Group 23, 2022, Total value: 13.02% of GDP. Item 1, Medicare value: 5.45% of GDP, which is 41.9% of 2022 spending. Item 2, Medicaid value: 2.02% of GDP, which is 15.5% of 2022 spending. Item 3, Social Security value: 5.55% of GDP, which is 42.6% of 2022 spending. Group 24, 2023, Total value: 13.37% of GDP. Item 1, Medicare value: 5.64% of GDP, which is 42.2% of 2023 spending. Item 2, Medicaid value: 2.06% of GDP, which is 15.4% of 2023 spending. Item 3, Social Security value: 5.67% of GDP, which is 42.4% of 2023 spending. Group 25, 2024, Total value: 13.71% of GDP. Item 1, Medicare value: 5.84% of GDP, which is 42.6% of 2024 spending. Item 2, Medicaid value: 2.09% of GDP, which is 15.2% of 2024 spending. Item 3, Social Security value: 5.78% of GDP, which is 42.2% of 2024 spending. Group 26, 2025, Total value: 14.06% of GDP. Item 1, Medicare value: 6.04% of GDP, which is 43.0% of 2025 spending. Item 2, Medicaid value: 2.13% of GDP, which is 15.1% of 2025 spending. Item 3, Social Security value: 5.89% of GDP, which is 41.9% of 2025 spending. Group 27, 2026, Total value: 14.38% of GDP. Item 1, Medicare value: 6.22% of GDP, which is 43.3% of 2026 spending. Item 2, Medicaid value: 2.17% of GDP, which is 15.1% of 2026 spending. Item 3, Social Security value: 5.99% of GDP, which is 41.7% of 2026 spending. Group 28, 2027, Total value: 14.68% of GDP. Item 1, Medicare value: 6.4% of GDP, which is 43.6% of 2027 spending. Item 2, Medicaid value: 2.2% of GDP, which is 15.0% of 2027 spending. Item 3, Social Security value: 6.08% of GDP, which is 41.4% of 2027 spending. Group 29, 2028, Total value: 14.98% of GDP. Item 1, Medicare value: 6.58% of GDP, which is 43.9% of 2028 spending. Item 2, Medicaid value: 2.23% of GDP, which is 14.9% of 2028 spending. Item 3, Social Security value: 6.17% of GDP, which is 41.2% of 2028 spending. Group 30, 2029, Total value: 15.28% of GDP. Item 1, Medicare value: 6.77% of GDP, which is 44.3% of 2029 spending. Item 2, Medicaid value: 2.27% of GDP, which is 14.9% of 2029 spending. Item 3, Social Security value: 6.24% of GDP, which is 40.8% of 2029 spending. Group 31, 2030, Total value: 15.57% of GDP. Item 1, Medicare value: 6.95% of GDP, which is 44.6% of 2030 spending. Item 2, Medicaid value: 2.31% of GDP, which is 14.8% of 2030 spending. Item 3, Social Security value: 6.31% of GDP, which is 40.5% of 2030 spending. Group 32, 2031, Total value: 15.83% of GDP. Item 1, Medicare value: 7.11% of GDP, which is 44.9% of 2031 spending. Item 2, Medicaid value: 2.35% of GDP, which is 14.8% of 2031 spending. Item 3, Social Security value: 6.37% of GDP, which is 40.2% of 2031 spending. Group 33, 2032, Total value: 16.08% of GDP. Item 1, Medicare value: 7.26% of GDP, which is 45.1% of 2032 spending. Item 2, Medicaid value: 2.4% of GDP, which is 14.9% of 2032 spending. Item 3, Social Security value: 6.42% of GDP, which is 39.9% of 2032 spending. Group 34, 2033, Total value: 16.33% of GDP. Item 1, Medicare value: 7.42% of GDP, which is 45.4% of 2033 spending. Item 2, Medicaid value: 2.45% of GDP, which is 15.0% of 2033 spending. Item 3, Social Security value: 6.46% of GDP, which is 39.6% of 2033 spending. Group 35, 2034, Total value: 16.58% of GDP. Item 1, Medicare value: 7.58% of GDP, which is 45.7% of 2034 spending. Item 2, Medicaid value: 2.5% of GDP, which is 15.1% of 2034 spending. Item 3, Social Security value: 6.5% of GDP, which is 39.2% of 2034 spending. Group 36, 2035, Total value: 16.82% of GDP. Item 1, Medicare value: 7.75% of GDP, which is 46.1% of 2035 spending. Item 2, Medicaid value: 2.55% of GDP, which is 15.2% of 2035 spending. Item 3, Social Security value: 6.52% of GDP, which is 38.8% of 2035 spending. Group 37, 2036, Total value: 17.04% of GDP. Item 1, Medicare value: 7.9% of GDP, which is 46.4% of 2036 spending. Item 2, Medicaid value: 2.6% of GDP, which is 15.3% of 2036 spending. Item 3, Social Security value: 6.54% of GDP, which is 38.4% of 2036 spending. Group 38, 2037, Total value: 17.24% of GDP. Item 1, Medicare value: 8.04% of GDP, which is 46.6% of 2037 spending. Item 2, Medicaid value: 2.65% of GDP, which is 15.4% of 2037 spending. Item 3, Social Security value: 6.55% of GDP, which is 38.0% of 2037 spending. Group 39, 2038, Total value: 17.42% of GDP. Item 1, Medicare value: 8.17% of GDP, which is 46.9% of 2038 spending. Item 2, Medicaid value: 2.7% of GDP, which is 15.5% of 2038 spending. Item 3, Social Security value: 6.55% of GDP, which is 37.6% of 2038 spending. Group 40, 2039, Total value: 17.59% of GDP. Item 1, Medicare value: 8.29% of GDP, which is 47.1% of 2039 spending. Item 2, Medicaid value: 2.75% of GDP, which is 15.6% of 2039 spending. Item 3, Social Security value: 6.55% of GDP, which is 37.2% of 2039 spending. Group 41, 2040, Total value: 17.75% of GDP. Item 1, Medicare value: 8.41% of GDP, which is 47.4% of 2040 spending. Item 2, Medicaid value: 2.8% of GDP, which is 15.8% of 2040 spending. Item 3, Social Security value: 6.54% of GDP, which is 36.8% of 2040 spending. Group 42, 2041, Total value: 17.91% of GDP. Item 1, Medicare value: 8.53% of GDP, which is 47.6% of 2041 spending. Item 2, Medicaid value: 2.85% of GDP, which is 15.9% of 2041 spending. Item 3, Social Security value: 6.53% of GDP, which is 36.5% of 2041 spending. Group 43, 2042, Total value: 18.07% of GDP. Item 1, Medicare value: 8.64% of GDP, which is 47.8% of 2042 spending. Item 2, Medicaid value: 2.9% of GDP, which is 16.0% of 2042 spending. Item 3, Social Security value: 6.53% of GDP, which is 36.1% of 2042 spending. Group 44, 2043, Total value: 18.23% of GDP. Item 1, Medicare value: 8.76% of GDP, which is 48.1% of 2043 spending. Item 2, Medicaid value: 2.95% of GDP, which is 16.2% of 2043 spending. Item 3, Social Security value: 6.52% of GDP, which is 35.8% of 2043 spending. Group 45, 2044, Total value: 18.39% of GDP. Item 1, Medicare value: 8.88% of GDP, which is 48.3% of 2044 spending. Item 2, Medicaid value: 3% of GDP, which is 16.3% of 2044 spending. Item 3, Social Security value: 6.51% of GDP, which is 35.4% of 2044 spending. Group 46, 2045, Total value: 18.55% of GDP. Item 1, Medicare value: 9% of GDP, which is 48.5% of 2045 spending. Item 2, Medicaid value: 3.05% of GDP, which is 16.4% of 2045 spending. Item 3, Social Security value: 6.5% of GDP, which is 35.0% of 2045 spending. Group 47, 2046, Total value: 18.71% of GDP. Item 1, Medicare value: 9.12% of GDP, which is 48.7% of 2046 spending. Item 2, Medicaid value: 3.1% of GDP, which is 16.6% of 2046 spending. Item 3, Social Security value: 6.49% of GDP, which is 34.7% of 2046 spending. Group 48, 2047, Total value: 18.86% of GDP. Item 1, Medicare value: 9.23% of GDP, which is 48.9% of 2047 spending. Item 2, Medicaid value: 3.14% of GDP, which is 16.6% of 2047 spending. Item 3, Social Security value: 6.49% of GDP, which is 34.4% of 2047 spending. Group 49, 2048, Total value: 19% of GDP. Item 1, Medicare value: 9.33% of GDP, which is 49.1% of 2048 spending. Item 2, Medicaid value: 3.19% of GDP, which is 16.8% of 2048 spending. Item 3, Social Security value: 6.48% of GDP, which is 34.1% of 2048 spending. Group 50, 2049, Total value: 19.15% of GDP. Item 1, Medicare value: 9.44% of GDP, which is 49.3% of 2049 spending. Item 2, Medicaid value: 3.23% of GDP, which is 16.9% of 2049 spending. Item 3, Social Security value: 6.48% of GDP, which is 33.8% of 2049 spending. Group 51, 2050, Total value: 19.3% of GDP. Item 1, Medicare value: 9.56% of GDP, which is 49.5% of 2050 spending. Item 2, Medicaid value: 3.27% of GDP, which is 16.9% of 2050 spending. Item 3, Social Security value: 6.47% of GDP, which is 33.5% of 2050 spending. Group 52, 2051, Total value: 19.45% of GDP. Item 1, Medicare value: 9.67% of GDP, which is 49.7% of 2051 spending. Item 2, Medicaid value: 3.31% of GDP, which is 17.0% of 2051 spending. Item 3, Social Security value: 6.47% of GDP, which is 33.3% of 2051 spending. Group 53, 2052, Total value: 19.61% of GDP. Item 1, Medicare value: 9.78% of GDP, which is 49.9% of 2052 spending. Item 2, Medicaid value: 3.35% of GDP, which is 17.1% of 2052 spending. Item 3, Social Security value: 6.48% of GDP, which is 33.0% of 2052 spending. Group 54, 2053, Total value: 19.77% of GDP. Item 1, Medicare value: 9.9% of GDP, which is 50.1% of 2053 spending. Item 2, Medicaid value: 3.39% of GDP, which is 17.1% of 2053 spending. Item 3, Social Security value: 6.48% of GDP, which is 32.8% of 2053 spending. Group 55, 2054, Total value: 19.96% of GDP. Item 1, Medicare value: 10.03% of GDP, which is 50.3% of 2054 spending. Item 2, Medicaid value: 3.44% of GDP, which is 17.2% of 2054 spending. Item 3, Social Security value: 6.49% of GDP, which is 32.5% of 2054 spending. Group 56, 2055, Total value: 20.13% of GDP. Item 1, Medicare value: 10.16% of GDP, which is 50.5% of 2055 spending. Item 2, Medicaid value: 3.48% of GDP, which is 17.3% of 2055 spending. Item 3, Social Security value: 6.49% of GDP, which is 32.2% of 2055 spending. Group 57, 2056, Total value: 20.32% of GDP. Item 1, Medicare value: 10.3% of GDP, which is 50.7% of 2056 spending. Item 2, Medicaid value: 3.52% of GDP, which is 17.3% of 2056 spending. Item 3, Social Security value: 6.5% of GDP, which is 32.0% of 2056 spending. Group 58, 2057, Total value: 20.52% of GDP. Item 1, Medicare value: 10.44% of GDP, which is 50.9% of 2057 spending. Item 2, Medicaid value: 3.57% of GDP, which is 17.4% of 2057 spending. Item 3, Social Security value: 6.51% of GDP, which is 31.7% of 2057 spending. Group 59, 2058, Total value: 20.72% of GDP. Item 1, Medicare value: 10.59% of GDP, which is 51.1% of 2058 spending. Item 2, Medicaid value: 3.61% of GDP, which is 17.4% of 2058 spending. Item 3, Social Security value: 6.52% of GDP, which is 31.5% of 2058 spending. Group 60, 2059, Total value: 20.92% of GDP. Item 1, Medicare value: 10.74% of GDP, which is 51.3% of 2059 spending. Item 2, Medicaid value: 3.66% of GDP, which is 17.5% of 2059 spending. Item 3, Social Security value: 6.52% of GDP, which is 31.2% of 2059 spending. Group 61, 2060, Total value: 21.12% of GDP. Item 1, Medicare value: 10.89% of GDP, which is 51.6% of 2060 spending. Item 2, Medicaid value: 3.7% of GDP, which is 17.5% of 2060 spending. Item 3, Social Security value: 6.53% of GDP, which is 30.9% of 2060 spending. Group 62, 2061, Total value: 21.33% of GDP. Item 1, Medicare value: 11.04% of GDP, which is 51.8% of 2061 spending. Item 2, Medicaid value: 3.75% of GDP, which is 17.6% of 2061 spending. Item 3, Social Security value: 6.54% of GDP, which is 30.7% of 2061 spending. Group 63, 2062, Total value: 21.54% of GDP. Item 1, Medicare value: 11.19% of GDP, which is 51.9% of 2062 spending. Item 2, Medicaid value: 3.8% of GDP, which is 17.6% of 2062 spending. Item 3, Social Security value: 6.55% of GDP, which is 30.4% of 2062 spending. Group 64, 2063, Total value: 21.74% of GDP. Item 1, Medicare value: 11.34% of GDP, which is 52.2% of 2063 spending. Item 2, Medicaid value: 3.84% of GDP, which is 17.7% of 2063 spending. Item 3, Social Security value: 6.56% of GDP, which is 30.2% of 2063 spending. Group 65, 2064, Total value: 21.96% of GDP. Item 1, Medicare value: 11.51% of GDP, which is 52.4% of 2064 spending. Item 2, Medicaid value: 3.89% of GDP, which is 17.7% of 2064 spending. Item 3, Social Security value: 6.56% of GDP, which is 29.9% of 2064 spending. Group 66, 2065, Total value: 22.19% of GDP. Item 1, Medicare value: 11.68% of GDP, which is 52.6% of 2065 spending. Item 2, Medicaid value: 3.94% of GDP, which is 17.8% of 2065 spending. Item 3, Social Security value: 6.57% of GDP, which is 29.6% of 2065 spending. Group 67, 2066, Total value: 22.43% of GDP. Item 1, Medicare value: 11.86% of GDP, which is 52.9% of 2066 spending. Item 2, Medicaid value: 3.99% of GDP, which is 17.8% of 2066 spending. Item 3, Social Security value: 6.58% of GDP, which is 29.3% of 2066 spending. Group 68, 2067, Total value: 22.66% of GDP. Item 1, Medicare value: 12.03% of GDP, which is 53.1% of 2067 spending. Item 2, Medicaid value: 4.04% of GDP, which is 17.8% of 2067 spending. Item 3, Social Security value: 6.59% of GDP, which is 29.1% of 2067 spending. Group 69, 2068, Total value: 22.87% of GDP. Item 1, Medicare value: 12.19% of GDP, which is 53.3% of 2068 spending. Item 2, Medicaid value: 4.09% of GDP, which is 17.9% of 2068 spending. Item 3, Social Security value: 6.59% of GDP, which is 28.8% of 2068 spending. Group 70, 2069, Total value: 23.08% of GDP. Item 1, Medicare value: 12.35% of GDP, which is 53.5% of 2069 spending. Item 2, Medicaid value: 4.14% of GDP, which is 17.9% of 2069 spending. Item 3, Social Security value: 6.59% of GDP, which is 28.6% of 2069 spending. Group 71, 2070, Total value: 23.3% of GDP. Item 1, Medicare value: 12.51% of GDP, which is 53.7% of 2070 spending. Item 2, Medicaid value: 4.19% of GDP, which is 18.0% of 2070 spending. Item 3, Social Security value: 6.6% of GDP, which is 28.3% of 2070 spending. Group 72, 2071, Total value: 23.53% of GDP. Item 1, Medicare value: 12.68% of GDP, which is 53.9% of 2071 spending. Item 2, Medicaid value: 4.25% of GDP, which is 18.1% of 2071 spending. Item 3, Social Security value: 6.6% of GDP, which is 28.0% of 2071 spending. Group 73, 2072, Total value: 23.74% of GDP. Item 1, Medicare value: 12.84% of GDP, which is 54.1% of 2072 spending. Item 2, Medicaid value: 4.3% of GDP, which is 18.1% of 2072 spending. Item 3, Social Security value: 6.6% of GDP, which is 27.8% of 2072 spending. Group 74, 2073, Total value: 23.97% of GDP. Item 1, Medicare value: 13.01% of GDP, which is 54.3% of 2073 spending. Item 2, Medicaid value: 4.35% of GDP, which is 18.1% of 2073 spending. Item 3, Social Security value: 6.61% of GDP, which is 27.6% of 2073 spending. Group 75, 2074, Total value: 24.19% of GDP. Item 1, Medicare value: 13.17% of GDP, which is 54.4% of 2074 spending. Item 2, Medicaid value: 4.41% of GDP, which is 18.2% of 2074 spending. Item 3, Social Security value: 6.61% of GDP, which is 27.3% of 2074 spending. Group 76, 2075, Total value: 24.41% of GDP. Item 1, Medicare value: 13.34% of GDP, which is 54.6% of 2075 spending. Item 2, Medicaid value: 4.46% of GDP, which is 18.3% of 2075 spending. Item 3, Social Security value: 6.61% of GDP, which is 27.1% of 2075 spending. Group 77, 2076, Total value: 24.639% of GDP. Item 1, Medicare value: 13.509% of GDP, which is 54.8% of 2076 spending. Item 2, Medicaid value: 4.52% of GDP, which is 18.3% of 2076 spending. Item 3, Social Security value: 6.61% of GDP, which is 26.8% of 2076 spending. Group 78, 2077, Total value: 24.869% of GDP. Item 1, Medicare value: 13.679% of GDP, which is 55.0% of 2077 spending. Item 2, Medicaid value: 4.57% of GDP, which is 18.4% of 2077 spending. Item 3, Social Security value: 6.62% of GDP, which is 26.6% of 2077 spending. Group 79, 2078, Total value: 25.1% of GDP. Item 1, Medicare value: 13.85% of GDP, which is 55.2% of 2078 spending. Item 2, Medicaid value: 4.63% of GDP, which is 18.4% of 2078 spending. Item 3, Social Security value: 6.62% of GDP, which is 26.4% of 2078 spending. Group 80, 2079, Total value: 25.16% of GDP. Item 1, Medicare value: 13.85% of GDP, which is 55.0% of 2079 spending. Item 2, Medicaid value: 4.69% of GDP, which is 18.6% of 2079 spending. Item 3, Social Security value: 6.62% of GDP, which is 26.3% of 2079 spending. Group 81, 2080, Total value: 25.23% of GDP. Item 1, Medicare value: 13.85% of GDP, which is 54.9% of 2080 spending. Item 2, Medicaid value: 4.75% of GDP, which is 18.8% of 2080 spending. Item 3, Social Security value: 6.63% of GDP, which is 26.3% of 2080 spending. Note: Social Security and Medicare projections based on the intermediate assumptions of the 2004 Trustees’ Reports. Medicaid projections based on CBO’s January 2004 short-term Medicaid estimates and CBO’s December 2003 long-term Medicaid projections under mid-range assumptions. Source: GAO analysis based on data from the Office of the Chief Actuary, Social Security Administration, Office of the Actuary, Centers for Medicare and Medicaid Services, and the Congressional Budget Office. [End of figure] U.S. Elderly Dependency Ratio Expected to Continue to Increase: [See PDF for image] –graphic text: Line chart with one line and 5 items. Year: 1950; Elderly Dependency Ratio (in percent): 13%. Year: 1980; Elderly Dependency Ratio (in percent): 17%. Year: 2000; Elderly Dependency Ratio (in percent): 19%. Year: 2030; Elderly Dependency Ratio (in percent): 33%. Year: 2050; Elderly Dependency Ratio (in percent): 35%. Source: Population Division of the Department of Economic and Social Affairs of the United Nations Secretariat, World Population Prospects: 2000 Revision and World Urbanization Prospects: 2001 Revision. Data for 2030 - 2050 are projected. [End of figure] U.S. Labor Force Growth Will Continue to Decline: [See PDF for image] –graphic text: Line chart with one line and 111 items. Year: 1970; Percentage change (5-year moving average): 2.38%. Year: 1971; Percentage change (5-year moving average): 2.56%. Year: 1972; Percentage change (5-year moving average): 2.64%. Year: 1973; Percentage change (5-year moving average): 2.52%. Year: 1974; Percentage change (5-year moving average): 2.64%. Year: 1975; Percentage change (5-year moving average): 2.6%. Year: 1976; Percentage change (5-year moving average): 2.72%. Year: 1977; Percentage change (5-year moving average): 2.68%. Year: 1978; Percentage change (5-year moving average): 2.66%. Year: 1979; Percentage change (5-year moving average): 2.48%. Year: 1980; Percentage change (5-year moving average): 2.18%. Year: 1981; Percentage change (5-year moving average): 1.76%. Year: 1982; Percentage change (5-year moving average): 1.58%. Year: 1983; Percentage change (5-year moving average): 1.54%. Year: 1984; Percentage change (5-year moving average): 1.64%. Year: 1985; Percentage change (5-year moving average): 1.7%. Year: 1986; Percentage change (5-year moving average): 1.76%. Year: 1987; Percentage change (5-year moving average): 1.76%. Year: 1988; Percentage change (5-year moving average): 1.74%. Year: 1989; Percentage change (5-year moving average): 1.4%. Year: 1990; Percentage change (5-year moving average): 1.34%. Year: 1991; Percentage change (5-year moving average): 1.2%. Year: 1992; Percentage change (5-year moving average): 1.12%. Year: 1993; Percentage change (5-year moving average): 1%. Year: 1994; Percentage change (5-year moving average): 1.16%. Year: 1995; Percentage change (5-year moving average): 1.24%. Year: 1996; Percentage change (5-year moving average): 1.28%. Year: 1997; Percentage change (5-year moving average): 1.24%. Year: 1998; Percentage change (5-year moving average): 1.5%. Year: 1999; Percentage change (5-year moving average): 1.42%. Year: 2000; Percentage change (5-year moving average): 1.22%. Year: 2001; Percentage change (5-year moving average): 1.26%. Year: 2002; Percentage change (5-year moving average): 1.28%. Year: 2003; Percentage change (5-year moving average): 1.14%. Year: 2004; Percentage change (5-year moving average): 1.24%. Year: 2005; Percentage change (5-year moving average): 1.3%. Year: 2006; Percentage change (5-year moving average): 1.26%. Year: 2007; Percentage change (5-year moving average): 1.18%. Year: 2008; Percentage change (5-year moving average): 1.02%. Year: 2009; Percentage change (5-year moving average): 0.92%. Year: 2010; Percentage change (5-year moving average): 0.82%. Year: 2011; Percentage change (5-year moving average): 0.74%. Year: 2012; Percentage change (5-year moving average): 0.66%. Year: 2013; Percentage change (5-year moving average): 0.6%. Year: 2014; Percentage change (5-year moving average): 0.52%. Year: 2015; Percentage change (5-year moving average): 0.48%. Year: 2016; Percentage change (5-year moving average): 0.44%. Year: 2017; Percentage change (5-year moving average): 0.42%. Year: 2018; Percentage change (5-year moving average): 0.38%. Year: 2019; Percentage change (5-year moving average): 0.36%. Year: 2020; Percentage change (5-year moving average): 0.34%. Year: 2021; Percentage change (5-year moving average): 0.3%. Year: 2022; Percentage change (5-year moving average): 0.26%. Year: 2023; Percentage change (5-year moving average): 0.24%. Year: 2024; Percentage change (5-year moving average): 0.22%. Year: 2025; Percentage change (5-year moving average): 0.2%. Year: 2026; Percentage change (5-year moving average): 0.2%. Year: 2027; Percentage change (5-year moving average): 0.2%. Year: 2028; Percentage change (5-year moving average): 0.2%. Year: 2029; Percentage change (5-year moving average): 0.22%. Year: 2030; Percentage change (5-year moving average): 0.24%. Year: 2031; Percentage change (5-year moving average): 0.26%. Year: 2032; Percentage change (5-year moving average): 0.28%. Year: 2033; Percentage change (5-year moving average): 0.3%. Year: 2034; Percentage change (5-year moving average): 0.3%. Year: 2035; Percentage change (5-year moving average): 0.3%. Year: 2036; Percentage change (5-year moving average): 0.3%. Year: 2037; Percentage change (5-year moving average): 0.3%. Year: 2038; Percentage change (5-year moving average): 0.3%. Year: 2039; Percentage change (5-year moving average): 0.3%. Year: 2040; Percentage change (5-year moving average): 0.3%. Year: 2041; Percentage change (5-year moving average): 0.3%. Year: 2042; Percentage change (5-year moving average): 0.3%. Year: 2043; Percentage change (5-year moving average): 0.3%. Year: 2044; Percentage change (5-year moving average): 0.3%. Year: 2045; Percentage change (5-year moving average): 0.3%. Year: 2046; Percentage change (5-year moving average): 0.28%. Year: 2047; Percentage change (5-year moving average): 0.26%. Year: 2048; Percentage change (5-year moving average): 0.24%. Year: 2049; Percentage change (5-year moving average): 0.22%. Year: 2050; Percentage change (5-year moving average): 0.2%. Year: 2051; Percentage change (5-year moving average): 0.2%. Year: 2052; Percentage change (5-year moving average): 0.2%. Year: 2053; Percentage change (5-year moving average): 0.2%. Year: 2054; Percentage change (5-year moving average): 0.2%. Year: 2055; Percentage change (5-year moving average): 0.2%. Year: 2056; Percentage change (5-year moving average): 0.2%. Year: 2057; Percentage change (5-year moving average): 0.2%. Year: 2058; Percentage change (5-year moving average): 0.2%. Year: 2059; Percentage change (5-year moving average): 0.2%. Year: 2060; Percentage change (5-year moving average): 0.2%. Year: 2061; Percentage change (5-year moving average): 0.2%. Year: 2062; Percentage change (5-year moving average): 0.2%. Year: 2063; Percentage change (5-year moving average): 0.2%. Year: 2064; Percentage change (5-year moving average): 0.2%. Year: 2065; Percentage change (5-year moving average): 0.2%. Year: 2066; Percentage change (5-year moving average): 0.2%. Year: 2067; Percentage change (5-year moving average): 0.2%. Year: 2068; Percentage change (5-year moving average): 0.2%. Year: 2069; Percentage change (5-year moving average): 0.2%. Year: 2070; Percentage change (5-year moving average): 0.2%. Year: 2071; Percentage change (5-year moving average): 0.2%. Year: 2072; Percentage change (5-year moving average): 0.2%. Year: 2073; Percentage change (5-year moving average): 0.2%. Year: 2074; Percentage change (5-year moving average): 0.2%. Year: 2075; Percentage change (5-year moving average): 0.2%. Year: 2076; Percentage change (5-year moving average): 0.2%. Year: 2077; Percentage change (5-year moving average): 0.2%. Year: 2078; Percentage change (5-year moving average): 0.2%. Year: 2079; Percentage change (5-year moving average): 0.2%. Year: 2080; Percentage change (5-year moving average): 0.2%. Note: Percentage change is calculated as a centered 5-yr moving average of projections based on the intermediate assumptions of the 2004 Trustees Reports. Source: GAO analysis of data from the Office of the Chief Actuary, Social Security Administration. [End of figure] Key Dates Highlight Long Term Challenges of the Social Security System: Date: 2008; Event: Social Security cash surplus begins to decline. Date: 2018; Event: Annual benefit costs exceed cash revenue from taxes. Date: 2028; Trust fund ceases to grow because even taxes plus interest fall short of benefits. Date: 2042 (SSA); 2052 (CBO); Event: Trust fund exhausted, annual revenues sufficient to pay about 73%-81% of promised benefits. Sources: Social Security Administration, The 2004 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds. Washington, DC, March 2004. Congressional Budget Office, The Outlook for Social Security: Potential Range of Social Security Outlays and Revenues Under Current Law. Washington, DC, June 2004. [End of table] Different Measures, Same Challenge: 75-year projection of funding shortfall: * $3.7 trillion in present value; * 0.7% of GDP; *1.8% of taxable payroll. Infinite horizon projection of funding shortfall: * $10.4 trillion in present value; * 1.2% of GDP; * 3.5% of taxable payroll. Source: Social Security Administration, The 2004 Annual Report of the Board of Trustees of the Federal Old-Age and Survivors Insurance and Disability Insurance Trust Funds (Washington D.C.: March 2004). Updated 2/8/05. Social Security Reform Elements: Reform proposals should be evaluated as packages that strike a balance among individual reform elements and important interactive effects, including consideration of both funded and promised benefit levels. Comprehensive proposals can be evaluated against three basic criteria: * Financing sustainable solvency; * Balancing adequacy and equity in the benefits structure; * Implementing and administering reforms. Key Elements for Economic Security in Retirement: Adequate retirement income: * Social Security; * Pensions; * Savings; * Earnings from continued employment (e.g., part-time). Affordable health care: * Medicare; * Retiree health care; Long-term care (a hybrid). Major Players: * Employers; * Government; * Individuals; * Family; * Community. Social Security: The Bottom Line: Illustrative Questions and Answers Based on the Latest Trustees’ Reports: * Does Social Security have a financing problem? [Yes] * Will the Social Security program ever go bust? [No] * Will the Social Security trust fund balance ever be exhausted? [Yes] * Should the trust fund solvency date be the primary action-forcing event for Social Security reform? [No] * What other factors should be considered? - Cash flow; - Total unfunded commitments; - Percent of the budget and GDP; - Percent of taxable payroll. * Should we act sooner rather than later to reform Social Security? [Yes] - Time is working against us; - We have an opportunity to exceed the expectations of every generation of Americans; - We have bigger problems that we ultimately will have to address; - A successful reform effort would help to improve the credibility of government and enhance confidence in government; * Will individual accounts solve the problem by themselves? [No] * Should they be considered as part of a more comprehensive reform proposal? [Yes] * What other types of reforms need to be considered? - Strengthening progressivity (e.g., replacement rates); - Indexing formulas; - Retirement ages; - Tax base and rates. * What is an example of a government retirement system that includes private accounts? [The Federal Thrift Savings Plan] * Would individual accounts involve significant transition costs? [Yes] * What other possible implications would individual accounts have? - Personal savings rate; - Rates of return on Social Security payroll taxes; - Pre- and post-retirement survivors’ benefits; - Savings and investment education; - Supplemental retirement savings vehicle; * Should we consider both promised and funded benefits in analyzing Social Security Reform proposals? [Yes] * Should we consider both cash and present value related costs and implications of Social Security reform proposals? [Yes] * Can Social Security reform exceed the expectations of all generations of Americans? [Yes] * Does the Social Security reform process matter? [Yes] * Should Social Security be about the public good versus political gain? [Yes] [End of slide presentation]