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
The nation faces serious fiscal challenges that require Congress and the administration to make difficult, near-term policy choices in setting national priorities and charting a path forward for economic growth. These choices will influence the level and composition of federal spending and how the government obtains needed resources. Decisions in the near term to enhance economic growth and address national priorities need to be accompanied by a forward-looking fiscal plan to put the government on a sustainable long-term path.
A look at the nation's fiscal condition and future, and opportunities to improve it.
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So, what’s new this year? Read our March 2020 press release on our report on the nation’s fiscal health and listen to our podcast to find out more.
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 (including tax expenditures) 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.
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.
Notes: Percentages in the colored pie on the left do not sum to 100 percent due to rounding. The colored pie on the left represents noninterest spending in 2019. The red slice in the pie on the right is the fiscal gap, as calculated from GAO’s 2020 alternative simulation. 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.
Notes: Percentages in the colored pie on the left do not sum to 100 percent due to rounding. The colored pie on the left represents revenue in 2019. The green slice in the pie on the right is the fiscal gap, as calculated from GAO’s 2020 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 $175 billion in fiscal year 2019 in improper payments — payments that should not have been made or that were made in an incorrect amount.
- There is an estimated average net tax gap of $381 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 outlook, as well as the drivers and trends driving our nation’s fiscal challenges.
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