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.
Current Fiscal Conditions
Unsustainable Fiscal Path: Costs Are Growing Faster than Revenues
The nation’s unsustainable fiscal path is not just something that we are predicting for the future: it is happening now. As shown below, over the past 3 years, spending has increased more rapidly than revenues have.
Financial Outcomes for Fiscal Years 2016 - 2018
|FY 2018||FY 2017||FY 2016|
|Outlays (Spending)||$4.1 Trillion||$4.0 Trillion||$3.9 Trillion|
|Receipts (Revenues)||$3.3 Trillion||$3.3 Trillion||$3.3 Trillion|
|Deficit||$779 Billion||$666 Billion||$587 Billion|
|Debt Held by the Public
(End of Fiscal Year)
|$15.8 Trillion||$14.7 Trillion||$14.2 Trillion|
Source: Financial Report of the United States Government for Fiscal Years 2018, 2017, 2016.
Each year the Department of the Treasury in consultation with the Office of Management and Budget publish the consolidated financial statements of the U.S. government, which GAO audits. A more complete picture of the government’s fiscal condition requires looking at both the federal budget and the financial report. Together, both types of statements show that the federal government is on an unsustainable fiscal path.
Auditing the Federal Government’s Books
While federal financial management has improved since the government began preparing these statements, we have been unable to render an audit opinion on them because of:
- serious financial management problems at the Department of Defense leading to financial statements that cannot be audited;
- the federal government's inability to adequately account for and reconcile intragovernmental activity and balances between federal agencies; and
- the federal government's ineffective process for preparing the consolidated financial statements.
Need to know more about financial statement auditing (or what an “audit opinion” is)? Read this post on our WatchBlog.
Unpacking the Financial Report of the U.S. Government
GAO periodically publishes a guide to understanding the financial report of the U.S. government, for those who want to dig deeper into the financial report.
The Short Version
Short on time? The U.S. government publishes a yearly Executive Summary that provides a brief high-level summary of key parts of the Financial Report. In the Financial Report, you will find the Executive Summary and the financial statements themselves, as well as:
- Management’s Discussion and Analysis: Insights on topics including the reporting entity, the results of operations, and future outlook.
- Notes to the Financial Statements: Disclosures and detailed information relating to the financial statements.
- Required Supplementary Information: Additional information on topics such as fiscal sustainability and social insurance, as required by federal financial accounting standards.
- Other Information: Information on topics such as the tax burden and the tax gap.
- Required Supplementary Stewardship Information: Highlighted federal investments in programs related to nonfederal property, human capital, and research and development.
- GAO’s Independent Auditor’s Report: Includes GAO’s reports on the reliability of the information in the financial statements and internal control over financial reporting.
Dawn B. Simpson
Director, Financial Management and Assurance