The Government Accountability Office on Wednesday issued its third annual report to Congress on the nation’s fiscal health, again warning that the federal government’s current path is unsustainable.
“Congress and the administration face serious economic, security, and social challenges that will require difficult policy choices in the near term about economic growth and national needs,” the GAO says. “These near-term policy decisions should be accompanied by a long-term fiscal plan to put the government on a sustainable path. The longer action is delayed, the greater and more drastic the changes will have to be.”
The GAO report also said that, while it will take more than executive action to put the country on a more sustainable fiscal path, there are steps that executive branch agencies can take to contribute, including reining in improper payments (about $150 billion in 2018); improving collection of owed taxes (a gap of about $400 billion a year); streamlining government to eliminate fragmentation, overlap and duplication; and improving the government’s financial statements and keeping closer tabs on tax expenditures.
Some key details and charts from the new report (there’s also a short podcast with Susan Irving, GAO’s expert on debt and fiscal issues!):
The ratio of debt held by the public to GDP is set to surpass its 1946 high of 106 percent within 13 to 20 years, compared to a 14-to-22-year timeframe last year.
Health care and net interest costs remain the primary spending-side drivers of the debt, with health care spending projected to continue growing faster than GDP and interest payments on pace to exceed defense spending in less than a decade.