President Obama submitted a detailed FY2013 budget proposal to Congress on February 13, 2012. 112 ), based on a proposal by Committee Chairman Paul Ryan, which the full House passed on March 29. Several Members of the Senate have offered budget proposals, including a resolution by Budget Committee Chairman Kent Conrad that is based on recommendations of the National Commission on Fiscal Responsibility and Reform (also known as the Simpson-Bowles Commission). Although the House and Senate have not agreed on a concurrent resolution on the FY2013 budget, the FY2013 appropriations process is underway in both chambers. In response to the reconciliation instructions in H.Con.Res. Specifically, the figure shows that human resources spending accounted for 5.6% of the Gross Domestic Product (GDP) in FY1962 and rose to a peak of 16.6% in FY2010. As a share of GDP, human resources spending dropped slightly in FY2011, to 16.1%. Fueling growth over the long term 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 ACA of 2010. On the other hand, cost-mitigating factors in the first part of the decade include the assumed economic recovery, lower spending for programs that respond automatically to economic conditions such as Unemployment Insurance and the Supplemental Nutrition Assistance Program, and the expiration of all stimulus funding provided under the American Recovery and Reinvestment Act (ARRA, P.L. 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). CBO estimates that real spending for Medicaid equaled 15% of human resources spending in FY2012 and projects this will increase to 22% of human resources spending in FY2022. Three Proposals

 Figure 4 compares total estimated outlays for the human resources superfunction, as a share of GDP, under the CBO current law baseline, President Obama's proposed budget (as re-estimated by CBO), the House budget resolution, and the Conrad/Fiscal Commission resolution, from FY2012 through FY2022. The House budget resolution assumes gradually decreasing spending for human resources as a share of GDP, although it also would rise slightly at the end of the decade. This compares with 16.1% under the Administration's budget, 16% under the Conrad/Fiscal Commission resolution, and 14% under the House resolution. Mandatory spending in this function includes student financial assistance, some training and employment services, and Social Services Block Grants. Under CBO's current law baseline, the President's proposed budget, and the Conrad/Fiscal Commission resolution, Medicaid spending will climb sharply over the 10-year period, primarily due to the expansion of Medicaid eligibility under the ACA (which, as noted above, could be affected by the Supreme Court's June 28 decision). All of the expected growth in human resources spending will be in health care (Medicaid and Medicare) and Social Security. Policymakers are engaged in a high-level debate over short- and long-term strategies to sustain the recovery and further stimulate the economy, reduce the federal deficit, and stabilize the national debt, and hold different points of view about the optimal size and composition of federal spending and revenues. By contrast, the House budget would result in significantly lower spending for human resources programs throughout the 10-year period.
Debate is occurring on short- and long-term efforts to boost the economy, reduce the deficit, and stabilize the debt; this debate includes proposals to alter the overall size and composition of federal spending and revenues. "Human resources" programs account for the majority of federal outlays (67% in FY2011) and would be affected by these proposals. Six categories comprise the human resources "superfunction": education, training, employment, and social services; health (largely Medicaid); Medicare; income security; Social Security; and veterans programs.
President Obama submitted a detailed FY2013 budget proposal to Congress in February. The House subsequently passed an FY2013 budget resolution (H.Con.Res. 112), based on a proposal by Budget Committee Chairman Ryan. Several proposals have been offered by Members of the Senate, including a resolution by Budget Committee Chairman Conrad that is based on recommendations of the National Commission on Fiscal Responsibility and Reform (Simpson-Bowles Commission). Although the House and Senate have not agreed on a budget resolution, the FY2013 appropriations process is underway. The House has also passed a reconciliation bill (H.R. 5652) intended to replace an automatic budget reduction (i.e., "sequestration") scheduled to occur on January 2, 2013, under provisions of the Budget Control Act of 2011.
Spending for human resources peaked in FY2010 at 16.6% of Gross Domestic Product (GDP) and, according to the Congressional Budget Office (CBO), will have dropped to 15.5% in FY2012. 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 funding under the American Recovery and Reinvestment Act of 2009. CBO projects that human resources spending will rise again as a share of GDP and reach 16.1% in FY2022, due to continuing effects of the baby boom's retirement and enrollment in Medicare and Social Security, real growth in Social Security benefits, medical cost inflation, and spending under the Affordable Care Act (ACA) of 2010. (Note that CBO's baseline does not yet reflect any potential impact of the Supreme Court's June 28 decision on the ACA.)
Reflecting these trends, all projected growth in human resources spending will occur in three categories: health (i.e., Medicaid), Medicare, and Social Security. CBO estimates that spending for income security (which includes Unemployment Insurance, the Supplemental Nutrition Assistance Program, and selected low-income, retirement, and disability programs) will contract as a share of GDP over the next decade, as will the two smallest human resources categories (i.e., education, training, employment, and social services; and veterans benefits and services).
Both the Administration and Conrad/Fiscal Commission budgets assume human resources spending over the next 10 years at levels close to the CBO current law baseline, although the President requests increased spending in the initial years for economic stimulus. The House resolution assumes gradually decreasing spending for human resources as a share of GDP, but also assumes that spending would rise slightly at the end of the decade. As noted above, CBO projects human resources spending will equal 16.1% of GDP in FY2022 with no change in policy. This compares with 16.1% under the Administration proposal, 16% under the Conrad/Fiscal Commission resolution, and 14% under the House resolution. The most significant reductions from the CBO baseline assumed by the House would occur in three categories: education, training, employment, and social services; Medicaid (which would be converted into a block grant); and income security. The House also assumes conversion of Medicare into a "premium support" program starting in FY2023, which is beyond the budget resolution's 10-year window.