GAO Warns About the Federal Government's Finances
Washington, D.C. (April 10, 2019)—The U.S. Government Accountability Office (GAO) today issued its third annual report on the nation’s fiscal health, examining both the federal government’s current fiscal condition and its longer-term fiscal outlook.
“Our report provides a candid assessment of the nation’s long term fiscal challenges,” said Gene L. Dodaro, Comptroller General of the United States and head of the GAO. “Health care and net interest on the debt are the primary drivers on the spending side of the budget, and spending on net interest is on track to exceed defense spending in less than a decade. Policymakers need to consider changes across the entire range of federal activities—both revenue and spending.” The report also notes that laws enacted in fiscal year 2018 intended to spur economic growth and address national priorities also increased the projected debt burden in the Congressional Budget Office's, GAO’s, and Treasury’s projections.
Absent policy changes, the debt-to-GDP ratio will exceed the historical high of 106 percent in the next 13-20 years. Dodaro noted that a path in which debt grows faster than the economy is not sustainable. “Near-term policy decisions about economic growth and national needs should be accompanied by a long-term fiscal plan to put the government on a sustainable path,” Dodaro said. “This will help ensure that the United States remains in a strong economic position to meet its security and social needs, as well as preserve flexibility to address unforeseen events.”
The new report—The Nation’s Fiscal Health: Action Is Needed to Address the Federal Government’s Fiscal Future—discusses significant changes to the nation’s fiscal condition in fiscal year 2018, long-term simulations of the federal debt, and fiscal risks placing additional pressure on the federal budget. It also urges federal agencies to reduce improper payments; address the tax gap; eliminate or manage duplication, overlap, and fragmentation in federal programs; and produce better information on program and fiscal operations to strengthen decision-making. GAO also called on Congress to consider the agency’s recommendations on managing federal debt and the debt limit to ensure that the full faith and credit of the United States is never called into question.
The fiscal health report draws on Treasury’s recently issued Fiscal Year 2018 Financial Report of the U.S. Government; GAO’s audit of the government’s consolidated financial statements for fiscal years 2017 and 2018; and GAO’s High Risk List of federal areas vulnerable to waste, fraud, abuse, and mismanagement or needing broad-based transformation. For more information, contact Chuck Young, Managing Director of GAO Public Affairs, at youngc1@gao.gov or 202-512-4800.
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The Government Accountability Office, known as the investigative arm of Congress, is an independent, nonpartisan agency that exists to support Congress in meeting its constitutional responsibilities. GAO also works to improve the performance of the federal government and ensure its accountability to the American people. The agency examines the use of public funds; evaluates federal programs and policies; and provides analyses, recommendations, and other assistance to help Congress make informed oversight, policy, and funding decisions. GAO provides Congress with timely information that is objective, fact-based, nonideological, fair, and balanced. GAO’s commitment to good government is reflected in its core values of accountability, integrity, and reliability.