The federal government is on an unsustainable fiscal path.
Federal spending continues to outpace revenue—by $587 billion in 2016—and, absent policy changes, the structural gap between revenues and spending puts the federal government on an unsustainable long-term fiscal path.
Federal policymakers face economic, security, and social challenges requiring difficult policy choices, but a long-term fiscal plan is also needed to preserve flexibility to address unforeseen events.
Debt Held by the Public Under Projections from the 2016 Financial Report, the Congressional Budget Office, and GAO
Graph showing increasing ratio of national debt to gross domestic product.
The Congress and incoming 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. At the same time, the federal government is highly leveraged in debt by historical norms. In addition to near term financing decisions, a broader plan is needed to put the government on a more sustainable long-term path. This report illuminates this need by outlining the fiscal condition of the U.S. government and its future path based on current fiscal policies. It draws on the recently issued Fiscal Year 2016 Financial Report of the United States Government (2016 Financial Report) and GAO's audit of the government's consolidated financial statements.