Within that debate, attention has focused on proposals to alter the overall size and composition of total federal spending. On February 14, 2011, President Obama submitted his detailed FY2012 budget request to Congress, and two months later he released a set of deficit reduction policies intended to build on his February proposal. Unlike the February budget submission, the President's April Framework for Shared Prosperity and Shared Fiscal Responsibility does not include detailed proposals and has not been scored by the Congressional Budget Office (CBO). The House Budget Committee reported a concurrent resolution on the FY2012 budget ( H.Con.Res. 34 ) that was based on a document titled Path to Prosperity , released by Budget Committee Chairman Paul Ryan on April 5. The Senate has not yet acted on a budget resolution for FY2012. This CRS report highlights spending trends and key policy initiatives in the President's February budget and April F ramework , and in the House-passed budget resolution, for the six functional categories of the federal budget that comprise the human resources "superfunction." The six human resources functions (and their function codes) are
education, training, employment, and social services (Function 500); health (primarily Medicaid) (Function 550); Medicare (Function 570); income security (Function 600); Social Security (Function 650); and veterans benefits and services (Function 700). H.Con.Res. CBO expects they will have peaked in FY2010, at 16.4%, and will fall to 14.8% in FY2014. This pattern reflects the assumed economic recovery, lower spending for programs that respond automatically to economic conditions such as Unemployment Insurance and the Supplemental Nutrition Assistance Program (SNAP), and the expiration of all stimulus funding. Beginning in FY2015, however, human resources spending would rise again as a share of GDP, according to CBO, reaching 15.7% by FY2021. Fueling this increased spending are several factors, including the continuing effects of the baby boom generation's retirement and increased enrollment in Medicare and Social Security, certain program design features such as wage indexing in Social Security (which allows initial monthly benefits to replace a constant proportion of pre-retirement earnings and keep pace with rising living standards), medical cost inflation in excess of general inflation, and new spending attributable to implementation of the health care reform law of 2010. With no change in current law, CBO projects that spending for income security as a share of GDP will contract over the next decade, as will spending for the two smallest functions—education, training, employment, and social services (Function 500), and veterans benefits and services (Function 700). The figure shows that the President's budget closely follows and slightly exceeds the CBO baseline, while the House budget resolution would result in significantly lower spending as a share of the national economy. This compares with 15.9% under the Administration's budget and 13.5% under the House resolution. 34 sets targets that would lower spending from the current law baseline in two additional functions: education, training, employment, and social services, and income security. 111-5 ). Estimated spending in FY2021 would exceed the CBO current law baseline by 5% under the President's February budget and would be 3% lower than CBO's projections under the House resolution. One of the most widely reported provisions in the House budget resolution assumes enactment of legislation to convert Medicare into a "premium subsidy" program. However, as envisioned in the budget resolution, this change would not take effect until FY2022, which is beyond the resolution's 10-year budget window and is therefore not reflected in Figure 7 . The Administration and Congress are engaged in a debate over reducing the federal deficit and stabilizing the national debt; proposals to reduce and change the composition of federal spending are a major part of this debate. Within the human resources category, the House resolution would reduce spending primarily in three functions. The largest reduction from the CBO baseline, if all provisions in the House resolution were enacted, would occur in Function 550 (health, including Medicaid); the House spending target for this function in FY2021 would be 50% below the baseline.
The 112th Congress is focusing attention on short- and long-term efforts to reduce the federal deficit and stabilize the national debt, including proposals to alter the overall size and composition of total federal spending. Components of the federal budget categorized as "human resources" account for the majority of federal outlays (70% in FY2010) and would be affected by these proposals. Six functional categories comprise the human resources "superfunction": education, training, employment, and social services; health (primarily Medicaid); Medicare; income security; Social Security; and veterans benefits and services.
President Obama submitted a detailed FY2012 budget request to Congress on February 14, and in April, he released a set of deficit reduction policies intended to build on the February proposal called the President's Framework for Shared Prosperity and Shared Fiscal Responsibility. On April 15, the House passed a concurrent resolution on the FY2012 budget (H.Con.Res. 34) that was based on a document called Path to Prosperity, released by Budget Committee Chairman Paul Ryan on April 5. The Senate has not yet acted on a budget resolution for FY2012.
As a share of the national economy, spending for human resources is expected to have peaked at 16.4% of Gross Domestic Product (GDP) in FY2010 and, according to the Congressional Budget Office (CBO), will fall to 14.8% in FY2014. This decline reflects the assumed economic recovery, lower spending for programs that respond automatically to economic conditions (e.g., Unemployment Insurance, Supplemental Nutrition Assistance Program), and expiration of stimulus funding under the American Recovery and Reinvestment Act of 2009 (P.L. 111-5). However, CBO estimates that, with no changes in current law, human resources spending will rise again as a share of GDP and reach 15.7% by FY2021 due to the continuing effects of the baby boom generation's retirement and increased enrollment in Medicare and Social Security, real growth in initial Social Security benefits, medical cost inflation in excess of general inflation, and new spending related to the health care reform law of 2010.
Reflecting these trends, all projected growth in the human resources budget will occur in three functional categories: health (primarily Medicaid), Medicare, and Social Security. CBO estimates that spending for income security will contract as a share of GDP over the next decade, as will spending for the two smallest human resources categories (i.e., education, training, employment, and social services; and veterans benefits and services).
Both the President's budget and H.Con.Res. 34 include provisions intended to reduce spending overall. However, the President's February proposals would result in spending for human resources that would closely follow, and slightly exceed, the CBO current law baseline, while the House resolution sets spending targets that are significantly lower. Specifically, human resources spending would equal 15.9% of GDP in FY2021 under the Administration's February budget and 13.5% under the House resolution, compared to CBO's baseline estimate of 15.7%. The most significant reductions from the CBO baseline, if all provisions assumed in the House resolution were enacted, would occur in three categories: education, training, employment, and social services (the smallest human resources category); Medicaid; and income security. As widely reported, the House resolution assumes enactment of legislation to convert Medicare into a "premium subsidy" program; however, this change would not occur until FY2022, which is after the resolution's 10-year budget window. Thus, the House resolution sets spending targets for the next 10 years that are relatively close to CBO's baseline projections for Medicare, Social Security, and veterans benefits and services.