For those inclined to look beyond the sharp drop in the deficit this year, as we should, the budget update released by the Congressional Budget Office (CBO) on May 14 has some striking indications of things to come.
Not surprisingly, these indications tell us that the most powerful factors in the current budget dynamic are aging, health care costs and interest on the debt -- things political leaders seem the least interested in doing anything about.
One way to show the looming problem is to compare the composition of federal spending in 2013 with 2023 under the CBO current-law baseline. During those 10 years, total spending is projected to rise from 21.5 percent of the economy (GDP) to 22.6 percent. However, it is far from a uniform acceleration.
Discretionary spending, which includes defense, is projected to shrink from 7.6 percent of GDP to 5.5 percent, the lowest level on record.
Mandatory spending other than Social Security and the major health care programs is also projected to shrink, from 2.6 percent of GDP to 2.1percent. Between these declining categories, the total drop in spending totals a very substantial 2.5 percent of...