The interaction of an aging population and the national budget can best be seen through programs for older people. The key to understanding this interaction lies in linking budget and program costs with demographics, and in observing data over time. Data from three federal budget programs, Social Security's Old-Age and Survivors Insurance and Disability Insurance (OASDI), Medicare and Medicaid, and veteran's compensation, pension, and medical care were analyzed along with demographic data on the elderly in the United States. Results suggested that OASDI payments will increase from $124 billion in 1980 to $1,383 billion in 2020. An increase in the number of beneficiaries will account for 12% of the increase. The annual increase in national health care programs from 1965-1980 was related to price inflation; population growth accounted for 7-8 percent of the increase. Inflation accounted for 60% of increased veteran's medical care costs, while population growth accounted for 22% of the increase. Increased benefits contributed 17% to rising veteran's program costs. (Appendix I contains a discussion of the methodology used in compiling this report as well as details of the projections and statistical analyses. Appendix II contains 14 charts of the demographics used in this study.) (AG)