Governmentwide spending on defense and civilian contracting risks being pinched over the next five years by growing mandatory spending on entitlements, according to industry research being unveiled last week at a conference convened by the Professional Services Council.
Though the overall federal budget will rise from current $3.9 trillion to $6.2 trillion in 2025, the defense portion is projected to fall from 15 percent to 11 percent of that total, while discretionary spending shrinks from 30 percent to 20 percent, according to the group’s first annual Vision Federal Market Forecast, a synthesis of the thinking of some 300 contracting specialists from industry, agencies, think tanks and Congress.
“Interest payments on the debt alone will double by the mid-2020’s,” said Stan Soloway, the council’s retiring president and CEO, in a preview conference call with reporters. This and entitlement accounts such as the Social Security Disability Insurance Trust Fund will have a huge financial impact, which often gets glossed over, and is “untenable and unsustainable,” he said.
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