“Baseline Reform Act” Is a Step in the Wrong Direction
 Technically, the issue is not the level of expenditures but rather of funding (budget authority) for discretionary programs, but data on discretionary funding go back only to 1976. Because ten-year expenditure trends are reasonable proxies for ten-year funding trends, we use expenditure data for this aspect of the analysis because more years of data are available. In addition, the outlays of the highway and mass transit trust funds are considered discretionary but the funding for them is considered mandatory, and those outlay projections are based on inflation adjustments that would be removed by the proposed legislation. Therefore, the historical data on discretionary outlays better reflect the universe of programs that the proposed change in baseline rules would affect.
 In fact, existing baseline rules instruct OMB and CBO to take caseload growth or shrinkage into account when projecting the administrative costs of the Medicare and Unemployment Compensation trust funds. But many other programs beyond those two are (or should be) responsive to changes in caseload. Needless to say, the proposed legislation, by establishing a strict freeze as its baseline projection rule for appropriations, would remove this feature of existing baseline rules as well.
 CBO, Long-Term Budget Outlook, 2011: “Spending for health care in the United States has been growing faster than the economy for many years, posing a challenge not only for the federal government’s two major health insurance programs, Medicare and Medicaid, but also for state and local governments and the private sector. Measured as a percentage of the nation’s gross domestic product (GDP), total spending on health care services and supplies increased from 4.8 percent in 1960 to 9.8 percent in 1985 and 16.5 percent in 2009, the most recent calendar year for which data are available. Federal spending for Medicare and Medicaid rose from 2.2 percent of GDP in fiscal year 1985 to 5.5 percent in 2010. Underlying those trends, health care spending per person has grown faster than the nation’s economic output per person by an average of a little less than 2 percentage points per year during the past several decades. Key factors contributing to that faster growth have been the emergence and increased use of new medical technologies, rising personal income, and the expanding scope of health insurance coverage. Such rates of growth cannot continue indefinitely, however, because if they did, total spending on health care would eventually account for all of the country’s economic output —an implausible outcome.” http://www.cbo.gov/ftpdocs/122xx/doc12212/06-21-Long-Term_Budget_Outlook.pdf, pg. 35.
 We estimate that permanently extending the 2001 and 2003 tax cuts would add almost 2 percent of GDP to the long-run fiscal gap; that is, a continuation of these policies would increase deficits by almost 2 percent of GDP on average in future years, not counting interest. See The Long-Term Fiscal Outlook Is Bleak Restoring Fiscal Sustainability Will Require Major Changes to Programs, Revenues, and the Nation’s Health Care System, Center on Budget and Policy Priorities, December 16, 2008, https://www.cbpp.org/cms/index.cfm?fa=view&id=2215.