America's Fiscal Future

This big-picture look at the nation’s fiscal condition covers the federal government’s financial statements; the federal debt; federal, state, and local fiscal projections; and budget trends.

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Overview


Action Is Needed to Address the Federal Government’s Fiscal Health

Congress and the Administration face serious economic, security, and social challenges that will require difficult policy choices in the short term about the level of federal spending and investments as well as ways to obtain needed resources. Decisions over the short term to enhance economic growth and address national policies need to be accompanied by a broader fiscal plan to put the government on a path that is more sustainable over the long term.

A look at the nation's fiscal condition and future, and opportunities to improve it.

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Our report on the nation’s fiscal health illuminates the need for a long-term fiscal plan and answers key questions about:

  • Significant changes to the government’s fiscal condition
  • Long-term fiscal projections from GAO, the Congressional Budget Office, and the Financial Report of the United States Government that all show the federal government is on an unsustainable path
  • Fiscal risks that are placing additional pressure on the federal budget
  • Opportunities for executive agencies to contribute to fiscal sustainability

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Tough Choices and Opportunities Ahead

Reducing the debt and deficit right now is not enough. Spending reductions or revenue increases — likely both — need to be made consistently over the next 75 years to keep debt constant as a share of GDP and address the gap between projected growth in program spending (aside from spending on interest payments) and revenue (known as the “fiscal gap”). If action is delayed, the changes needed will be more significant.

Decrease in Noninterest Spending Needed to Close the Fiscal Gap without Increasing Revenue, with Federal Noninterest Outlays for Comparison

Source: GAO and GAO analysis of Congressional Budget Office data.
Note: The colored pie on the left represents noninterest spending in 2016 (the most recent year of data available) and does not sum to 100 percent due to rounding. The red slice in the pie on the right side is the fiscal gap, as calculated from GAO’s 2017 alternative simulation, which does not reflect the effects of legislation enacted after September 30, 2017. Read about the assumptions underlying this simulation.
Data: txt | pdf



Increase in Revenue Needed to Close the Fiscal Gap without Decreasing Spending, with Federal Revenues for Comparison

Source: GAO and GAO analysis of Congressional Budget Office data.
Note: The colored pie on the left represents revenue in 2016 (the most recent year of data available) and does not sum to 100 due to rounding. The green slice in the pie on the right side is the fiscal gap, as calculated from GAO’s 2017 alternative simulation, which does not reflect the effects of legislation enacted after September 30, 2017. Read about the assumptions underlying this simulation.
Data: txt | pdf

While long-term changes in spending and revenue require legislation, executive agencies have other opportunities to contribute to a sustainable fiscal future. Explore our work in those areas:

  • Estimated $141 billion in fiscal year 2017 in improper payments — payments that should not have been made or that were made in an incorrect amount.
  • $406 billion/year net estimated tax gap — the difference between taxes owed to the government and total taxes paid on time or after IRS enforcement action. We have made recommendations to improve tax enforcement efforts.
  • Tens of billions of dollars in potential savings by taking our recommended actions — specifically the ones for addressing duplication, overlap, and fragmentation and achieving potential cost savings.

Learn more about the federal, state, and local fiscal forecast and the drivers and trends driving our nation’s fiscal challenges.

GAO Contact

Susan Irving

Senior Advisor, Debt & Fiscal Issues

irvings@gao.gov

202-512-6806