President’s Proposed 2011 Budget Sets $901 Billion for HHS [02-03-10]

Filed under: Industry Updates — Editor @ 9:22 am

The President’s request for FY 2011 represents a 10.8 percent increase over the $813 billion the administration expects to spend this year.  Medicaid would receive another $25 billion (to assist the sates) and Medicare would lose $722 million.  Even with that loss, Medicare would rise to over $488 billion next year (from $451 billion this year.)  The total budget is 3.8 trillion for FY 2011, and that is a lot of zeros, adding to tremendous deficits.  While discretionary spending may be frozen for three years, that won’t apply to Medicare and Medicaid.

Medicare and Medicaid are now consuming more the 16 percent of the GDP, far in excess on a per person basis compared to other developed countries.  That’s why the Congressional Budget Office reminds us, “The federal budget is on an unsustainable path, primarily because of the rising cost of health care and the aging of the U.S. population.”  The chart below shows how quickly Medicare and Medicaid, if left unchecked, will gobble up the economic capacity of the country.

Projected Federal Spending Under One Fiscal Scenario
(Percentage of gross domestic product)

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