Our Nation's Fiscal Outlook: The Federal Government's Long-Term Budget Imbalance
Over the next few decades, the nation’s fiscal outlook will be shaped largely by demographics and health care costs. As the baby boom generation retires, federal spending on retirement and health programs—Social Security, Medicare, and Medicaid—will grow dramatically. A range of other federal fiscal commitments, some explicit and some representing implicit public expectations, also bind the nation’s fiscal future. Absent policy change, a growing imbalance between expected federal spending and tax revenues will mean escalating and ultimately unsustainable federal deficits and debt.
The Long-Term Fiscal Challenge
To analyze and monitor changes in the long-term fiscal outlook, GAO maintains a long-term model of the federal budget and the economy. The model’s results dramatically illustrate the need for action sooner rather than later to address the long-term fiscal imbalance. For over a decade, GAO has published the results of its long-term budget simulations in reports, testimonies, and other products. This web site presents GAO’s latest simulation results.
GAO’s long-term model was adapted from work done at the Federal Reserve Bank of New York. Simulations are updated as new estimates become available from the Congressional Budget Office and from the Social Security and Medicare Trustees.