The Congressional Budget Office (CBO) in Washington D.C. released a report on the Budget and Economic Outlook for 2015-2025. The report estimates that the federal budget deficit will total $468 billion in fiscal 2014, which amounts to 2.6% of the nation’s GDP. According to the CBO, the deficit is projected to remain fairly stable as a percentage of GDP through fiscal 2018 before rising again. After 2018 the deficit is projected to increase due to an increase in federal spending, an aging population, expanding federal health insurance subsidies, rising health care costs, and rising interest rates on the federal debt.

Medicaid spending is expected to continue fast growth due to the expansion under the Affordable Care Act. Federal Medicaid spending rose to $301 billion in 2014, a 14% increase compared to 2013 levels, and is projected to grow by an additional 11 percent in 2015. It is the assumption by the budget office that more states will expand Medicaid in the future. By 2025, the CBO estimates that federal spending on Medicaid will total $588 billion, nearly twice the $301 billion spent on the program in 2014.