1 EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT
EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT 2

Executive Summary to the FY 2022 

Financial Report of the United States Government

The FY 2022 Financial Report presents the U.S. government’s current financial position and condition, and 

discusses key financial topics and trends. The Financial Report is produced by Treasury in coordination with 

OMB, which is part of the Executive Office of the President. The table on the preceding page presents several key 

indicators of the government’s financial position and condition, which are discussed in this Executive Summary 

and, in greater detail, in the Financial Report. The Secretary of the Treasury, the Director of OMB, and the 

Comptroller General of the U.S. at the GAO believe that the information discussed in this Financial Report is 

important to all Americans.

This Financial Report addresses the government’s financial activity and results as of and for the fiscal years 

ended September 30, 2022, and 2021. Note 30—Subsequent Events discusses events that occurred after the end of 

the fiscal year that may affect the government’s financial position and condition.

Results in Brief

The “Nation by the Numbers” table on the preceding page and the following summarize key metrics about 

the federal government’s financial position for and during FY 2022:

• The budget deficit decreased by $1.4 trillion (50.4 percent) to $1.4 trillion and net operating cost 

increased by $1.1 trillion (34.8 percent) to $4.2 trillion.

• Net operating cost increased due largely to significant increases in non-cash costs (primarily losses 

stemming from changes in assumptions affecting cost and liability estimates for the government’s 

employee and veteran benefits programs). These amounts do not affect the current year deficit.

• The government’s gross costs of $7.4 trillion, less $531.1 billion in revenues earned for goods and 

services provided to the public, plus $2.2 trillion in net losses from changes in assumptions yields the 

government’s net cost of $9.1 trillion.

• Tax and other revenues increased by $670.0 billion to $4.9 trillion. Deducting these revenues from net 

cost yields the federal government’s “bottom line” net operating cost of $4.2 trillion referenced above.

• Comparing total government assets of $5.0 trillion (including $1.4 trillion of loans receivable, net and 

$1.2 trillion of PP&E) to total liabilities of $39.0 trillion (including $24.3 trillion in federal debt and 

interest payable, and $12.8 trillion of federal employee and veteran benefits payable) yields a negative net 

position of $34.1 trillion.

• The Statement of Long-Term Fiscal Projections (SLTFP) shows that the present value (PV) of total noninterest spending, over the next 75 years, under current policy, is projected to exceed the PV of total 

receipts by $79.5 trillion (total federal non-interest net expenditures from the table on the previous page). 

• The debt-to-GDP ratio was approximately 97 percent at the end of FY 2022. Under current policy and 

based on this report’s assumptions, it is projected to reach 566 percent by 2097. The projected continuous 

rise of the debt-to-GDP ratio indicates that current policy is unsustainable. 

• The Statement of Social Insurance (SOSI) shows that the PV of the government’s expenditures for Social 

Security and Medicare Parts A, B and D, and other social insurance programs over 75 years is projected 

to exceed social insurance revenues by about $75.9 trillion, a $4.9 trillion increase over 2021 social 

insurance projections.

• This Financial Report includes discussion and analysis of the continued effect of the federal 

government’s response to the COVID-19 pandemic on the government’s financial position during FY 

2022.
3 EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT

Where We Are Now 

The Federal Government’s Response to the Pandemic

On March 11, 2020, a novel strain of the Coronavirus (COVID-19) was declared a pandemic by the WHO

and precipitated a severe global health and economic crisis. A national emergency was declared in the U.S. on 

March 13, 2020. Since then, the federal government has taken broad action, including enacting multiple laws 

providing approximately $4.5 trillion across the government, to protect public health and economic stability from 

the effects of the unprecedented pandemic.

The corresponding financial effects of the government’s response to the COVID-19 pandemic were broad, 

impacting many agencies in a variety of ways and to varying degrees. The Financial Report includes discussion 

and analysis of the continued effect of the federal government’s response to the COVID-19 pandemic on the 

government’s financial statements for FY 2022. Additional information can be obtained from individual agency 

financial statements.

Comparing the Budget and the Financial Report 

The Budget and the Financial Report present complementary perspectives on the government’s financial 

position and condition.

• The Budget is the government’s primary financial planning and control tool. It accounts for past 

government receipts and spending and includes the President’s proposed receipts and spending plan. 

Receipts are cash received by the U.S. government and spending is measured as outlays, or payments 

made by the federal government to the public or entities outside the government. In simple terms, when 

total receipts exceed outlays, there is a budget surplus; conversely, if total outlays exceed total receipts, 

there is a budget deficit.

• The Financial Report includes the government’s costs and revenues, assets and liabilities, and other 

important financial information. It compares the government’s revenues (amounts earned, but not 

necessarily collected), with costs (amounts incurred, but not necessarily paid) to derive net operating cost.

Chart 1 compares the government’s budget deficit (receipts vs. outlays) and net operating cost (revenues vs. 

costs) for FYs 2018 - 2022. During FY 2022:

• A $550.0 billion decrease in outlays 

combined with an $850.1 billion 

increase in receipts resulting in a $1.4 

trillion (50.4 percent) decrease in the 

budget deficit from $2.8 trillion to 

$1.4 trillion. 

• Net operating cost increased $1.1 

trillion or 34.8 percent from $3.1 

trillion to $4.2 trillion, due mostly to a 

$1.7 trillion or 23.8 percent increase in 

net cost which more than offset a 

$670.0 billion or 15.7 percent increase 

in tax and other revenues.

The $2.8 trillion difference between the 

budget deficit and net operating cost is 

primarily due to accrued costs (incurred but not necessarily paid) that are included in net operating cost, but not 

the budget deficit, primarily costs related to increases in estimated federal employee and veteran benefits 

liabilities, particularly at VA. Significant estimated benefits cost increases are also the primary reason why net 

operating cost increased during FY 2022. These amounts do not affect the current year budget deficit. Other 
EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT 4

sources of differences include but are not limited to decreases in taxes receivable, increases in advances and 

deferred revenue received by the federal government from others, decreases in advances and prepayments made 

by the federal government, as well as timing differences related to the recording of credit reform costs.

Costs and Revenues 

The government’s “bottom line” net operating cost increased $1.1 trillion (34.8 percent) during FY 2022 to 

$4.2 trillion. It is calculated as follows:

• Starting with total gross costs of $7.4 

trillion, the government subtracts 

earned program revenues (e.g., 

Medicare premiums, national park 

entry fees, and postal service fees) and 

adjusts the balance for gains or losses 

from changes in actuarial assumptions 

used to estimate future federal 

employee and veteran benefits 

payments to derive its net cost before 

taxes and other revenues of $9.1 

trillion (see Chart 2), an increase of 

$1.7 trillion (23.8 percent) from FY 

2021. This net increase is the 

combined effect of many offsetting 

increases and decreases across the 

government, including the ongoing effects of the federal government’s response to the pandemic. For 

example:

o Entities administering federal employee and veteran benefits programs, including the OPM, VA, and 

DOD employ a complex series of assumptions to make actuarial projections of their long-term 

benefits liabilities. These assumptions include but are not limited to interest rates, beneficiary 

eligibility, life expectancy, and medical cost levels. Changes in these assumptions can result in either 

losses (net cost increases) or gains (net cost decreases). Across the government, these net losses from 

changes in assumptions amounted to $2.2 trillion in FY 2022, a loss increase (and a corresponding net 

cost increase) of $1.7 trillion compared to FY 2021.

o In particular, VA net costs increased $1.2 trillion due largely to changes in benefits program 

experience and assumptions as referenced above, including, but not limited to assumptions underlying 

VA’s Veterans’ compensation plan participation and benefit level distribution rates (increasing 

eligibility assumptions), decreasing mortality rates assumptions, and future long-term COLA.

o DOD net costs increased $568.4 billion due primarily to a $444.2 billion loss increase from changes 

in assumptions referenced above. However, the majority of DOD’s net costs included military 

operations, readiness and support, procurement, personnel, and R&D, which also collectively 

increased.

o A $303.9 billion decrease in net costs at the SBA is largely attributable to substantially lower 

pandemic-related loan and loan guarantee activity.

o A $304.4 billion decrease in Treasury net costs largely due to a significant decrease (from $569.5 

billion in FY 2021 to $13.1 billion in FY 2022) in EIP disbursements made to eligible recipients as 

part of pandemic relief efforts. 

o A $354.4 billion decrease at DOL, much of which is attributable to a $348.6 billion decrease in 

Income Maintenance programs costs, primarily due to decreases in unemployment benefits from the 

September 2021 expiration of COVID-19 unemployment programs and fewer unemployment claims.
5 EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT

o A $152.1 billion net cost increase at HHS primarily due to a $111.1 billion increase across the 

Medicare and Medicaid benefits programs, including an increase in Medicaid grants to states to 

continue COVID-19 relief efforts. 

o Education net costs increased $330.9 billion due largely to a $337.3 billion upward cost modification 

for Education’s direct loan program associated with announced broad-based student debt relief.

o SSA net costs increased $100.3 billion due largely to a 1.9 percent increase in the number of OASI 

beneficiaries, combined with a 5.9 percent COLA provided to beneficiaries in 2022. 

o Interest costs related to federal debt securities held by the public increased by $104.5 billion due 

largely to increases in inflation adjustments, interest rates, and outstanding debt held by the public.

• The government deducts tax and other revenues from net cost (with some adjustments) to derive its FY 

2022 “bottom line” net operating cost 

of $4.2 trillion.

o From Chart 3, total government tax 

and other revenues increased by 

$670.0 billion (15.7 percent) to 

about $4.9 trillion for FY 2022 due 

primarily to growth in individual 

income tax collections and tax 

withholdings. 

o Together, individual income tax 

and tax withholdings, and 

corporate taxes accounted for about 

89.2 percent of total tax and other 

revenues in FY 2022. Other 

revenues include Federal Reserve 

earnings, excise taxes, and customs 

duties.

Assets and Liabilities 

Chart 4 summarizes the assets and liabilities that the government reports on its Balance Sheet. As of 

September 30, 2022:

• More than three-fourths of the federal 

government’s total assets ($5.0 

trillion) consist of: 1) $877.8 billion in

cash and monetary assets; 2) $406.9 

billion in inventory and related 

property; 3) $1.4 trillion in net loans 

receivable (primarily student loans); 

and 4) $1.2 trillion in net PP&E.

o Cash and monetary assets ($877.8 

billion) is comprised largely of the

operating cash of the U.S. 

government. Operating cash held 

by Treasury increased $418.6 

billion (211.0 percent) to $617.0 

billion during FY 2022 due to

Treasury cash position decisions.
EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT 6

That is, during 2021, debt ceiling constraints forced Treasury to maintain a significantly lower

operating cash balance. When the debt ceiling was increased in December 2021, Treasury was able to

restore the operating cash balance to its one-week prudent policy level.

o Inventory and Related Property ($406.9 billion) is comprised of: 1) inventory, which is tangible 

personal property that is either held for sale, in the process of production for sale, or to be consumed in 

the production of goods for sale or in the provision of services for a fee; 2) OM&S, or tangible 

personal property to be consumed in normal operations (e.g., spare and repair parts, ammunition, and 

tactical missiles); and 3) stockpiles, or strategic and critical materials held due to statutory 

requirements for use in national defense, conservation, or local/national emergencies.

o Loans receivable, net ($1.4 trillion) is comprised of loans provided by multiple agencies, including 

SBA and Education, to promote the nation’s welfare by making financing available to segments of the 

population not served adequately by non-federal institutions or otherwise providing for certain 

activities or investments. The government’s direct loan portfolio decreased by $216.9 billion (13.1

percent) during FY 2022. Education’s Federal Direct Student Loans, net decreased $288.2 billion as 

Education announced broad-based debt relief. This decrease was partially offset by a $76.2 billion 

increase in SBA direct disaster COVID-19 EIDL-funded loans. 

o Federal government general PP&E includes many of the physical resources that are vital to the federal 

government’s ongoing operations, including buildings, structures, facilities, equipment, internal use 

software, and general-purpose land. DOD comprises approximately 68.0 percent of the government’s 

reported general PP&E of $1.2 trillion as of September 30, 2022.

o Other significant government resources not reported on the Balance Sheet include the government’s 

power to tax and set monetary policy, natural resources, and stewardship assets. Stewardship assets, 

including heritage assets and stewardship land, benefit the nation as a whole (e.g., national 

monuments, national parks) and are intended to be held indefinitely.

• Total liabilities ($39.0 trillion) consist mostly of: 1) $24.3 trillion in federal debt and interest payable; and 

2) $12.8 trillion in federal employee and veteran benefits payable.

o Federal debt held by the public is debt held outside of the government by individuals, corporations, 

state and local governments, FRB, foreign governments, and other non-federal entities.

o The government borrows from the public (increases federal debt levels) to finance deficits. During FY 

2022, federal debt held by the public increased $2.0 trillion (8.9 percent) to $24.3 trillion.

o The government also reports about $6.7 trillion of intra-governmental debt outstanding, which arises 

when one part of the government borrows from another. For example, government funds (e.g., Social 

Security and Medicare Trust Funds) typically must invest excess annual receipts, including interest 

earnings, in Treasury-issued federal debt securities. Although not reflected in Chart 4, these securities 

are included in the calculation of federal debt subject to the debt limit.

o Federal debt held by the public plus intra-governmental debt equals gross federal debt, which, with 

some adjustments, is subject to a statutory debt ceiling (“debt limit”). Congress and the President most 

recently increased the debt limit by $2.5 trillion in December 2021 with the enactment of P.L. 117-73. 

At the end of FY 2022, debt subject to the statutory limit was $30.9 trillion. On January 19, 2023, 

Treasury began taking extraordinary measures to meet the government’s obligations as they come due 

without exceeding the debt limit (see Note 30—Subsequent Events). Increasing or suspending the debt 

limit does not increase spending or authorize new spending; rather, it permits the government to 

continue to honor pre-existing commitments.

o Federal Employee and Veteran Benefits Payable ($12.8 trillion) represents the amounts of benefits 

payable by agencies which administer the government’s pension and other benefit plans for its military 

and civilian employees.

See Note 29—COVID-19 Activity, as well as the referenced agencies’ FY 2022 financial statements for 

additional information about the financial effects of the federal government’s response to the pandemic. See Note 
7 EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT

30—Subsequent Events for information about events that occurred after the end of the fiscal year that may affect 

the government’s financial results.

Key Economic Trends 

An analysis of U.S. economic performance provides useful background when evaluating the government’s 

financial statements. During the last two fiscal years, the economy’s performance has been deeply affected by the 

COVID-19 global pandemic as well as the U.S. government’s extensive measures to provide fiscal support. Over 

the course of FY 2022, the economy grew below trend, following the brisk recovery of the previous fiscal year. 

These and other economic and financial developments are discussed in greater detail in the Financial Report.

An Unsustainable Fiscal Path 

An important purpose of this Financial Report is to help citizens understand current fiscal policy and the 

importance and magnitude of policy reforms necessary to make it sustainable. A sustainable fiscal policy is 

defined as one where the ratio of debt held by the public to GDP (the debt-to-GDP ratio) is stable or declining 

over the long term. GDP measures the size of the nation’s economy in terms of the total value of all final goods 

and services that are produced in a year. Considering financial results relative to GDP is a useful indicator of the 

economy’s capacity to sustain the government’s many programs. This report presents data, including debt, as a 

percent of GDP to help readers assess whether current fiscal policy is sustainable. The debt-to-GDP ratio was 

approximately 97 percent at the end of FY 2022, down from approximately 100 percent at the end of FY 2021. 

The long-term fiscal projections in this report are based on the same economic and demographic assumptions that

underlie the SOSI.

The current fiscal path is unsustainable. To determine if current fiscal policy is sustainable, the projections 

based on the assumptions discussed in the Financial Report assume current policy will continue indefinitely.1The 

projections are therefore neither forecasts nor predictions. Nevertheless, the projections demonstrate that policy 

changes need to be enacted for the actual financial outcomes to differ from those projected.

Receipts, Spending, and the Debt 

Chart 5 shows historical and current policy projections for receipts, non-interest spending by major category, 

net interest, and total spending expressed 

as a percent of GDP.

• The primary deficit is the 

difference between non-interest 

spending and receipts. The ratio 

of the primary deficit to GDP is 

useful for gauging long-term 

fiscal sustainability.

• The primary deficit-to-GDP ratio 

increased during the financial 

crisis of 2008 and the COVID-19 

pandemic. Spending remained 

elevated in 2021 due to 

additional funding to support 

economic recovery, but 

increased receipts reduced the 

primary deficit-to-GDP ratio to 

10.8 percent. The primary deficit-to-GDP ratio in 2022 was 3.6 percent, decreasing by 7.1 percentage 

points from 2021 as spending attributable to the pandemic winds down.

1 Current policy in the projections is based on current law, but includes extension of certain policies that expire under current law but are routinely extended 

or otherwise expected to continue.
EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT 8

• The persistent long-term gap between projected receipts and total spending shown in Chart 5 occurs 

despite the projected effects of the PPACA2 on long-term deficits.

o Enactment of the PPACA in 2010 and the MACRA in 2015 established cost controls for Medicare 

hospital and physician payments whose long-term effectiveness is still to be demonstrated fully.

o There is uncertainty about the extent to which these projections can be achieved and whether the 

PPACA’s provisions intended to reduce Medicare cost growth will be overridden by new legislation. 

Table 1 summarizes the status and projected trends of the government’s Social Security and Medicare Trust 

Funds.

The primary deficit projections in Chart 5, along with those for interest rates and GDP, determine the debtto-GDP ratio projections in Chart 6.

• The debt-to-GDP ratio was 

approximately 97 percent at the 

end of FY 2022, and under 

current policy and based on this 

report’s assumptions is projected 

to reach 566 percent in 2097.

• The debt-to-GDP ratio rises 

continuously in great part because 

primary deficits lead to higher 

levels of debt. The continuous 

rise of the debt-to-GDP ratio 

indicates that current fiscal policy 

is unsustainable.

• These debt-to-GDP projections 

are lower than both the 2021 and 

2020 Financial Report

projections.

2 The PPACA refers to P.L. 111-148, as amended by P.L. 111-152. The PPACA expands health insurance coverage, provides health insurance subsidies for 

low-income individuals and families, includes many measures designed to reduce health care cost growth, and significantly reduces Medicare payment rates 

relative to the rates that would have occurred in the absence of the PPACA. (See Note 25 and the RSI section of the Financial Report, and the 2022

Medicare Trustees Report for additional information).
9 EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT

The Fiscal Gap and the Cost of Delaying Fiscal Policy Reform

• The 75-year fiscal gap is a measure of how much primary deficits must be reduced over the next 75 years 

in order to make fiscal policy sustainable. That estimated fiscal gap for 2022 is 4.9 percent of GDP 

(compared to 6.2 percent for 2021). 

• This estimate implies that making fiscal policy sustainable over the next 75 years would require some 

combination of spending reductions and receipt increases that equals 4.2 percent of GDP on average over 

the next 75 years. The fiscal gap represents 26.0 percent of 75-year PV receipts and 21.2 percent of 75-

year PV non-interest spending.

• The timing of policy changes to make fiscal policy sustainable has important implications for the wellbeing of future generations as is shown in Table 2.

o Table 2 shows that, if reform begins in 2033 or 2043, the estimated magnitude of primary surplus 

increases necessary to close the 75-year fiscal gap is 5.7 percent and 7.0 percent of GDP, respectively. 

The difference between the primary surplus increase necessary if reform begins in 2033 or 2043 and 

the increase necessary if reform begins in 2023, an additional 0.9 and 2.1 percentage points, 

respectively, is a measure of the additional burden policy delay would impose on future generations. 

o The longer policy action to close the fiscal gap is delayed, the larger the post-reform primary surpluses 

must be to achieve the target debt-to-GDP ratio at the end of the 75-year period. Future generations are 

harmed by a policy delay because the higher the primary surpluses are during their lifetimes, the 

greater is the difference between the taxes they pay and the programmatic spending from which they 

benefit.

Conclusion

• Projections in the Financial Report indicate that the government’s debt-to-GDP ratio is projected to rise 

over the 75-year projection period and beyond if current policy is kept in place. The projections in this 

Financial Report show that current policy is not sustainable.

• If changes in fiscal policy are not so abrupt as to slow economic growth and those policy changes are 

adopted earlier, then the required changes to revenue and/or spending will be smaller to return the 

government to a sustainable fiscal path.

Reporting on Climate Change

As stated in EO 14008, Tackling the Climate Crisis at Home and Abroad “the United States and the world 

face a profound climate crisis...Domestic action must go hand in hand with United States international leadership, 

aimed at significantly enhancing global action.” In response, the administration has enacted key legislation and 

issued important policy actions. As summarized in the Financial Report, many of the 24 CFO Act agencies have 

leveraged their FY 2022 financial statements to discuss a wide range of topics concerning how their agencies are 

responding to the climate crisis, including providing links to agency Climate Adaptation and Resilience Plans. 
EXECUTIVE SUMMARY TO THE 2022 FINANCIAL REPORT OF THE U.S. GOVERNMENT 10

Find Out More

The FY 2022 Financial Report and other information about the nation’s finances are available at:

• Treasury, https://www.fiscal.treasury.gov/fsreports/rpt/finrep/fr/fr_index.htm and

https://fiscaldata.treasury.gov/americas-finance-guide/;

• OMB’s Office of Federal Financial Management, https://www.whitehouse.gov/omb/management/officefederal-financial-management/; and

• GAO, https://www.gao.gov/federal-financial-accountability.

The GAO audit report on the U.S. government’s consolidated financial statements can be found beginning on page 222

of the full Financial Report. GAO was unable to express an opinion (disclaimed) on these consolidated financial 

statements for the reasons discussed in the audit report.