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.
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
Tough Choices and Opportunities Ahead
To change the long-term fiscal path, policymakers will need to consider policy changes to the entire range of federal activities, both revenue and spending (entitlement programs, other mandatory spending, and discretionary spending). One way to quantify the magnitude of the needed policy changes is by calculating the fiscal gap—the difference between revenue and program spending (aside from spending on interest payments)—that would need to be closed immediately and permanently to hold debt as a share of GDP constant over the next 75 years. If action is delayed, the necessary changes will be more significant.
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Source: GAO and GAO analysis of Congressional Budget Office data.
Notes: The colored pie on the left represents noninterest spending in 2017. The red slice in the pie on the right side is the fiscal gap, as calculated from GAO’s 2018 alternative simulation.
Read about the assumptions underlying this simulation.
Data: TXT | PDF
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Source: GAO and GAO analysis of Congressional Budget Office data.
Notes: The colored pie on the left represents revenue in 2017. The green slice in the pie on the right side is the fiscal gap, as calculated from GAO’s 2018 alternative simulation.
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.
- Federal agencies made an 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.
- There is an estimated net tax gap of $406 billion/year — which is the difference between taxes owed to the government and total taxes (paid on time or after IRS enforcement actions). We have made recommendations to improve tax enforcement efforts.
- Federal agencies could also save tens of billions of dollars 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 , as well as the drivers and trends driving our nation’s fiscal challenges.
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