The Long-Term Federal Fiscal Outlook
Source: GAO.
Note: Data are from GAO’s Fall 2011 simulations based on the Social Security Trustees’ assumptions for Social Security and the Trustees’ and CMS Actuary’s alternative assumptions for Medicare.
Baseline Extended simulation data: txt
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Alternative simulation data: txt
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GAO’s simulations lead to an overarching conclusion: current fiscal policy is unsustainable over the long term. Absent reform of federal retirement and health programs for the elderly--including Social Security, Medicare, and Medicaid--federal budgetary flexibility will become increasingly constrained. Assuming no changes to projected benefits or revenues, spending on these entitlements will drive increasingly large, persistent, and ultimately unsustainable federal deficits and debt as the baby boom generation retires.
Ultimately, addressing the challenges of the future will require looking at the entire range of federal activities. All types of federal spending—that is, for both discretionary and entitlement programs—and tax expenditures will need to be re-examined. GAO has identified opportunities for the federal government to reduce potential duplication in government programs, save tax dollars, and enhance revenue. As we move forward, the federal government will need to make tough choices in setting priorities and linking resources to results.
Since 1992, GAO has published the results of its long-term budget simulations in reports, testimonies, and other products. Below is a downloadable presentation on GAO’s simulations based on of the most recent update: