CBO: Ryan Plan Shrinks Debt, Ups Private Share of Health Care Spending

By Chris Good

Apr 6 2011, 1:14 PM ET 1

Here's the good news and the bad news about House Budget Chairman Paul Ryan's (R-Wis.) new budget plan, from the Congressional Budget Office's preliminary analysis: Under Ryan's plan, the national debt would shrink, but people (or insurers) would have to spend a lot more on health care.

First, debt held by the public (including foreign debt) would shrink to one sixth of its current size, relative to GDP, by 2050:

Under the extended-baseline scenario [meaning the law as currently written], debt held by the public is projected to rise from about 62 percent of GDP in 2010 to about 90 percent of GDP in 2050. Under the alternative fiscal scenario [meaning a scenario the CBO sees as likely], the ratio of debt to GDP is projected to rise to more than 300 percent in 2050 ... Under the proposal, the ratio of debt to GDP would be significantly smaller over the long term--falling to 48 percent in 2040 and 10 percent in 2050.

But the private share of health care spending would nearly double by 2030:

The CBO's analysis is by no means a final word: Ryan has not yet turned his proposal into a bill, and this analysis simply looks at the broad strokes he laid out Tuesday.