Under this scenario, outlays for all federal programs other than Social Security and the government’s major health care programs—the second set of bars—are projected to be about 8 percent of GDP in 2022, below those in any year in the past 40 years and well below the 11 percent of GDP that such outlays have averaged over that period. Even with such spending at a historically low level, the budget deficit under this scenario—shown on the far right—is projected to be 6.1 percent of GDP that year. Why? Because, under this scenario, outlays for Social Security and the health care programs—the first set of bars—would be much higher than in the past, about 5.5 percentage points of GDP more than the average over the past 40 years.

To keep debt from rising relative to GDP, the deficit would need to be about 3½ percent of GDP smaller in 2022 than we project under this alternative scenario; that’s $900 billion in that year alone. Therefore, to put the federal budget on a sustainable path, policymakers will need to allow federal revenues to increase to a much higher percentage of GDP than the average over the past 40 years, or make very large changes to Social Security and federal health care programs, or pursue some combination of the two approaches.