September 17, 2013

New study warns of US long-term debt problems

By Andrew Taylor / The Associated Press

WASHINGTON — A new government study says federal health care and retirement programs are threatening to overwhelm the federal budget and harm the economy in coming decades unless Washington finds the political will to restrain their growth.

The Congressional Budget Office report says government spending on health care and Social Security would double, relative to the size of the economy, in 25 years and that spending on other programs like defense, transportation and education would decline to its smallest level by the same measure since the Great Depression.

The report is one of a series by the agency and other budget watchdogs warning that spiraling long-term debt threatens to crowd out private investment, raise interest rates and limit Washington's ability to respond to a financial crisis.

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