Excerpts from THE NATION’S FISCAL HEALTH – US GOVERNMENT ACCOUNTABILITY OFFICE (GAO) REPORT May 2023
The federal government faces an unsustainable long-term fiscal future. Long-term projections from the Office of Management and Budget (OMB) and the Department of the Treasury, the Congressional Budget Office (CBO), and GAO all show that the balance of current revenue and program spending policies result in debt growing faster than the economy. This is unsustainable over the long term.
The fiscal year 2022 federal deficit was among the highest in American history. This occurred even though revenue growth has been strong and federal COVID- 19 relief spending has declined from recent years. In addition, the cost of financing the debt increased from prior years because interest rates rose substantially in fiscal year 2022.
Rising debt, relative to economic growth, could increase borrowing costs for both the federal government and private borrowers and could slow economic growth. CBO has stated that high and rising federal debt as a share of the economy increases the risk of a fiscal crisis. The underlying conditions driving the unsustainable fiscal outlook pose serious economic, security, and social challenges if not addressed.
For most of the nation’s history, the government’s debt held by the public as a share of GDP has increased during wartime and recessions but decreased during peacetime and economic expansions.
More recently, this pattern has changed. Debt held by the public as a share of GDP grew during three of the four most recent economic expansions.
For example, debt held by the public as a share of GDP grew during the economic expansion of June 2009 to February 2020. It did not grow during the economic expansion from March 1991 to March 2001.
Independent analyses by OMB-Treasury, CBO, and GAO all emphasize that current fiscal policy is unsustainable over the long term. Projections by OMB-Treasury, CBO, and GAO show that debt held by the public would reach its historical high of U.S.
106 percent of GDP by 2029 and continue to grow at an increasing pace. Our simulation shows debt held by the public growing to more than 219 percent of GDP-more than twice the size of the economy – by 2051.
Excerpts from A SUMMARY OF THE 2023 ANNUAL REPORTS
SOCIAL SECURITY AND MEDICARE BOARDS OF TRUSTEES by The Social Security Administration
The Hospital Insurance (HI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2031, three years later than reported last year. At that point, the fund’s reserves will become depleted…
The Old-Age and Survivors Insurance (OASI) Trust Fund will be able to pay 100 percent of total scheduled benefits until 2033…
Please refer to the attached documents for further reading.