i Results in Brief – 2018 Financial Report of U.S. Government 

RESULTS IN BRIEF

Highlights of the Fiscal Year 2018 Financial Report of the U.S. 

Government

Where We Are Now 

The government’s net cost before taxes 

and other revenues for fiscal year 2018

was $4.5 trillion - an increase of $10.1

billion (0.2 percent) from fiscal year

2017.

Net cost equals gross costs of $4.8

trillion, less earned program revenues 

(e.g., Medicare premiums, national 

park entry fees), and then adjusted for 

gains or losses from assumption 

changes used to estimate future federal 

employee and veterans benefits 

payments.

The increase in net cost is the

combined effect of many offsetting 

increases and decreases across the 

government.

Total government tax and other 

revenues grew by $9.7 billion (0.3

percent) to about $3.4 trillion for fiscal 

year 2018.

The government deducts $3.4 trillion 

in tax and other revenues from its $4.5 

trillion net cost (with some 

adjustments) to derive its fiscal year

2018 “bottom line” net operating cost 

of $1.2 trillion, which is largely 

unchanged compared to fiscal year 

2017.

By comparison, the government’s 

budget deficit for fiscal year 2018 

was $779.0 billion – an increase of 

$113.3 billion (about 17.0 percent) over fiscal year 2017. The $380.0 billion 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. These include but are not limited to estimated future costs of federal 

employee and veterans benefits.
 Results in Brief – 2018 Financial Report of the U.S. Government ii

An Unsustainable Fiscal Path 

The long-term fiscal projections indicate that the government’s debt-to-GDP ratio will rise from 78 percent in 

2018 to 530 percent over the 75-year projection period, and will continue to rise thereafter, if current policy is 

kept in place. The projections in this Financial Report show that current policy is not sustainable. These 

projections assume that current policy will continue indefinitely, and are, therefore, neither forecasts nor 

predictions. Nevertheless, policy changes must be enacted so that financial outcomes will be different than those 

projected. 

The primary deficit is the difference between non-interest spending and receipts. As a ratio relative to gross 

domestic product (GDP), (the primary deficit-to-GDP ratio), it is useful for gauging long-term fiscal 

sustainability. This ratio spiked from 2009 through 2012 due to the financial crisis of 2008-09, the ensuing severe 

recession, and increased spending and temporary tax reductions enacted to stimulate the economy and support 

recovery. As the economic recovery took hold, the primary deficit-to-GDP ratio fell, averaging 1.9 percent from 

2013-2018. The ratio is projected to rise to 2.9 percent in 2019 and then shrink slightly through 2024 as the 

economy grows. After 2024, increased spending for Social Security and health programs is projected to result in 

increasing primary deficits that peak in 2039 at 4.1 percent. This is due to the continued retirement of the baby 

boom generation and increases in health care costs. After 2039, the ratio gradually decreases to 2.5 percent in 

2093 as the aging of the population slows. The primary deficit projections, along with those for interest rates and 

GDP, determine the debt-to-GDP ratio projections.

These projections assume the individual income and estate and gift tax provisions of the TCJA are permanently 

extended and discretionary spending grows at the same rate as nominal GDP beyond 2019. Congressional action 

is required to make these changes. GDP, interest, and other economic and demographic assumptions are the same 

as those that underlie the most recent Social Security and Medicare trustees’ report projections, adjusted for 

historical revisions that occur annually. See Note 23 for more information.

If changes in policy are not so abrupt as to slow economic growth, then the sooner policy changes are adopted, the 

smaller the changes to revenue and/or spending will be required to return the government to a sustainable fiscal 

path.