The Nation Faces Increasing Fiscal Imbalance

We face large and growing structural deficits largely due to known demographic trends, rising health care costs, and relatively low federal revenues as a percentage of the economy.
Faster economic growth can help but will not come close to solving the problem.
GAO’s simulations show that balancing the budget in 2040 could require actions such as cutting total federal spending by about 60 percent or by raising taxes by about 2.5 times today’s level.
We believe the current fiscal policy is not sustainable and the way forward includes reexamining the base of federal programs, policies, functions, and activities.1
The budget crunch is coming to all of government, including DOD.

We face large and growing structural deficits largely due to known demographic trends, rising health care costs, and relatively low federal revenues as a percentage of the economy.