1 EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT
EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT 2

Executive Summary to the FY 2021

Financial Report of the United States Government

The FY 2021 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. The first audited Financial Report covered FY 1997, making the FY 2021 Financial

Report the 25th edition of this important vehicle for federal accountability and transparency.

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

ended September 30, 2021 and 2020. Note 31—Subsequent Events discusses events that occurred after the end of

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

Where We Are Now 

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 2021:

• The budget deficit decreased by $356.3 billion (11.4 percent) to $2.8 trillion and net operating cost

decreased by $746.5 billion (19.4 percent) to $3.1 trillion.

• The government’s gross costs of $7.3 trillion, less $462.3 billion in revenues earned for goods and

services provided to the public, plus $518.4 billion in net losses from changes in assumptions yields the

government’s net cost of $7.4 trillion.

• Tax and other revenues increased by $684.3 billion to $4.3 trillion. Deducting these revenues from net

cost yields the federal government’s “bottom line” net operating cost of $3.1 trillion referenced above.

• Comparing total government assets of $4.9 trillion to total liabilities of $34.8 trillion (comprised mostly

of $22.3 trillion in federal debt and interest payable, and $10.2 trillion of federal employee and veteran

benefits payable) yields a negative net position of $29.9 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 $97.6 trillion (total federal non-interest net expenditures from Table 1).

• The debt-to-GDP ratio was about 100 percent at the end of FY 2021. Under current policy and based on

this report’s assumptions, it is projected to reach 701 percent by 2096. 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 $71.0 trillion, a $5.5 trillion increase over 2020 social

insurance projections.

• This Financial Report includes discussion and analysis of the significant impact that the federal

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

2021.
3 EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT

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. A

national emergency was declared in the U.S. on March 13, 2020. The global spread of COVID-19, which

continued through FY 2021, resulted in a severe global health and economic crisis. During FY 2020 and FY 2021,

the federal government took broad action to protect public health from the effects of the unprecedented pandemic,

enacting several major pieces of legislation, including:

• Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (P.L. 116-123);

• Families First Coronavirus Response Act (FFCRA, P.L. 116-127);

• Coronavirus Aid, Relief, and Economic Security Act (CARES Act, P.L. 116-136);

• Paycheck Protection Program and Health Care Enhancement Act (PPPHCE Act, P.L. 116-139);

• Consolidated Appropriations Act, 2021 (CAA, P.L. 116-260); and

• American Rescue Plan Act of 2021 (ARP, P.L. 117-2).

These laws address the health and economic effects of COVID-19, providing assistance to American workers

and families, small businesses, and state, local, and tribal governments, and preserving jobs for American

industry. As indicated here and in the Financial Report, these essential programs had significant effects on the

federal government’s budgetary and financial results.

*Net of rescissions, transfers, and other adjustments. Does not include indirect appropriations related to COVID-19 activity.

Source: Appropriation Warrants. See Note 30—COVID-19 Activity and Agency Financial Reports for additional information.

Chart 1 summarizes the more than $4.8 trillion in appropriations (net of rescissions) enacted through

September 30, 2021 (i.e., during FY 2020 and FY 2021) for several key agencies, which include, but are not

limited to:

• Treasury appropriations support multiple efforts. IRS provided a refundable tax credit, the recovery rebate

or EIP, and Treasury provides for payments to state, local, and tribal governments for pandemic-related

spending. ($1.6 trillion)

• SBA administers the PPP, a loan guarantee program designed to provide a direct incentive for small

businesses to retain employees by providing loan forgiveness for amounts used for eligible expenses for
EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT 4

payroll and benefit costs, interest on mortgages, rent, and utilities. SBA also provides loans to small

business owners through the EIDL program. ($994.6 billion)

• Through multiple UI Programs, DOL expands the states’ ability to provide unemployment insurance for

many workers impacted by the pandemic, including for workers who are not eligible for

regular/traditional unemployment benefits. ($845.8 billion)

• Through the PHSSEF and other efforts, HHS provides broad support, including, but not limited to:

reimbursements to health care providers for expenses or lost revenues attributable to the pandemic, and

support for the development and purchase of vaccines, therapeutic treatment, testing, and medical

supplies. ($484.1 billion)

• Education COVID-19 appropriations funded a variety of programs administered primarily through grant

programs. COVID-19 relief legislation and administrative actions also provided support for student loan

borrowers primarily by temporarily suspending nearly all federal loan payments. ($282.1 billion)

• Funding for USDA extended modifications to federal nutrition assistance programs; funded programs to

support agricultural producers, growers, and processors; and provided additional relief to address the

continued impact of COVID-19 on the economy, public health, state and local governments, individuals,

and businesses. ($164.5 billion)

• DHS funding supports a wide range of efforts, including FEMA’s Disaster Relief Fund. FEMA is

authorized to provide many types of assistance including, but not limited to Public Assistance for

emergency protective measures, including vaccination activities, direct federal assistance, personal

protective equipment, and state and local Emergency Operations Center operations. ($115.9 billion)

• DOT funding supports the maintaining and continuing of operations and business needs of various

transportation systems in response to COVID-19. ($106.2 billion)

• Many other agencies and programs comprise the “Other” amount in Chart 1. See Note 30—COVID-19

Activity and agency financial statements for additional details concerning federal agency pandemic

response efforts.

The 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

significant impact that the federal government’s response to the COVID-19 pandemic had on the government’s

financial statements for FY 2021. 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 are greater than outlays, then there is a budget surplus; and when total outlays exceed total

receipts, then 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.
5 EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT

Chart 2 compares the government’s budget deficit (receipts vs. outlays) and net operating cost (revenues vs.

costs) for FYs 2017 - 2021. During FY 2021:

• A $269.7 billion increase in outlays

was more than offset by a $626.0

billion increase in receipts resulting in

a $356.3 billion decrease in the budget

deficit from $3.1 trillion to $2.8

trillion.

• Net operating cost decreased $746.5

billion or 19.4 percent from $3.8

trillion to $3.1 trillion, due mostly to a

$62.2 billion or 0.8 percent decrease

in net cost combined with a $684.3

billion or 19.2 percent increase in tax

and other revenues.

The $319.3 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, primarily costs related to

increases in estimated federal employee and veteran benefits liabilities. Other sources of differences include, but

are not limited to increases in taxes receivable and the value of investments in GSE, as well as increases in

advances largely associated with the government’s pandemic response and timing differences related to the

recording of credit reform costs.

Costs and Revenues

The government’s “bottom line” net operating cost decreased $746.5 billion (19.4 percent) during FY 2021

to $3.1 trillion. It is calculated as follows:

• Starting with total gross costs of $7.3

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 $7.4

trillion (see Chart 3), a slight decrease

of $62.2 billion (0.8 percent) from FY

2020. This net decrease 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 A $211.6 billion decrease in net costs at the SBA, driven primarily by a $230.0 billion decrease in

loan subsidy costs, including reestimates, attributable to the PPP and Debt Relief programs under the

CARES Act.
EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT 6

o A $270.1 billion increase in Treasury net costs largely due to increased disbursement of refundable

tax credits or EIPs ($569.5 billion in FY 2021 compared to $274.7 billion in FY 2020), to eligible

recipients in every state and territory and at foreign addresses.

o A $96.4 billion decrease at DOL, much of which is attributable to a $100.7 billion decrease in Income

Maintenance programs costs, primarily due to decreases in unemployment benefits as less jobless

claims are filed.

o A $100.8 billion net cost increase at HHS primarily due to a $115.4 billion increase across the

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

continue COVID-19 relief efforts. These cost increases were offset by cost decreases due to the

PHSSEF receiving less funding during FY 2021 for COVID-19.

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 $518.4 billion in FY 2021, a loss decrease (and a corresponding net cost

decrease) of $161.1 billion compared to FY 2020.

o VA net costs decreased $291.8 billion due largely to changes in benefits program experience and

assumptions as referenced above, including, but not limited to a lower than anticipated number of

veterans.

o DOD net costs increased $144.8 billion due to a $100.2 billion loss increase from changes in

assumptions referenced above, as well as slight increases in net costs across DOD’s major programs,

including military operations, readiness, support, procurement, personnel, and R&D.

o SSA net costs increased $36.5 billion due largely to a cost of living increase in benefits expenses for

the OASI program, partially offset by a decrease in the number of beneficiaries and, consequently,

expenses for the DI program.

o Interest costs related to federal debt securities held by the public increased by $20.9 billion due largely

to an increase in inflation adjustments and an increase in outstanding debt held by the public.

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

2021 “bottom line” net operating cost

of $3.1 trillion.

o From Chart 4, total government tax

and other revenues increased by

$684.3 billion (19.2 percent) to

about $4.3 trillion for FY 2021 due

primarily to overall growth in

income taxes collections, partially

offset by increased refunds.

o Together, individual income tax

and tax withholdings, and

corporate taxes accounted for about

87.7 percent of total tax and other

revenues in FY 2021. Other

revenues include Federal Reserve

earnings, excise taxes, and customs

duties.
7 EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT

Assets and Liabilities

Chart 5 summarizes the assets and liabilities that the government reports on its Balance Sheet. As of

September 30, 2021:

• More than three-fourths of the federal

government’s total assets ($4.9

trillion) consist of: 1) $475.0 billion in

cash and monetary assets; 2) $401.0

billion in net accounts receivable; 3)

$1.7 trillion in net loans receivable

(primarily student loans); and 4) $1.2

trillion in net PP&E.

o Cash and monetary assets ($475.0

billion) is comprised largely of the

operating cash of the U.S.

government. Operating cash held

by Treasury decreased $1.6 trillion

(88.8 percent) to $198.4 billion

during FY 2021 due to Treasury

maintaining an elevated cash

balance in FY 2020 to maintain prudent liquidity in light of the size and relative uncertainty of

COVID-19 related outflows, combined with needing to reduce the cash balance to well under

Treasury’s prudent policy level at the end of FY 2021 due to debt ceiling constraints.

o Treasury comprises approximately 76.0 percent of the government’s reported accounts receivable, net,

mostly in the form of reported taxes receivable, which consist of unpaid assessments due from

taxpayers, unpaid taxes related to IRC section 965, and deferred payments for employer’s share of

FICA taxes, resulting from the CARES Act. Other accounts receivable, gross increased significantly

year to year, primarily as a result of DOL’s $18.6 billion increase in benefit overpayments from

programs related to COVID-19 as well as a $7.0 billion increase in HHS receivables, primarily due to

Medicare.

o Loans receivable, net increased by $73.6 billion (4.7 percent) during FY 2021. This increase was

primarily attributable to an increase in direct disaster COVID-19 EIDL-funded loans and direct

student loans, offset by an increase in the estimated subsidy cost of direct student loans largely due to

administrative action to temporarily suspend payments during FY 2021.

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 68.8 percent of the government’s

reported general PP&E of $1.2 trillion as of September 30, 2021.

o Other significant government resources not reported on the Balance Sheet include stewardship assets,

natural resources, and the government’s power to tax and set monetary policy.

• Total liabilities ($34.8 trillion) consist mostly of: 1) $22.3 trillion in federal debt and interest payable; and

2) $10.2 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

2021, federal debt held by the public increased $1.3 trillion (6.0 percent) to $22.3 trillion.

o The government also reports about $6.2 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
EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT 8

earnings, in Treasury-issued federal debt securities. Although not reflected in Chart 5, 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”). At the end of FY 2021, debt

subject to the statutory limit was $28.4 trillion. 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. On August 2, 2019, the BBA of 2019 (P.L. 116-37) was enacted

suspending the statutory debt limit through July 31, 2021. A delay in raising the statutory debt limit

occurred from August 1, 2021 through September 30, 2021. During the period of August 2, 2021

through September 30, 2021, Treasury departed from their normal debt management operations and

undertook extraordinary measures to avoid exceeding the statutory debt limit. On October 14, 2021,

P.L. 117-50 was enacted which raised the statutory debt limit by $480.0 billion, to $28.9 trillion.

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 (see Note 31—Subsequent Events).

o Federal Employee and Veteran Benefits Payable ($10.2 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 30—COVID-19 Activity, as well as the referenced agencies’ FY 2021 financial statements for

additional information. See Note 31—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 2021, the economy grew briskly, continuing the recovery begun during 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 reached

approximately 100 percent at the end of FY 2021 which is similar to (but slightly below) the debt-to-GDP ratio at

the end of FY 2020. 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.

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.
9 EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT

Receipts, Spending, and the Debt

Chart 6 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

spiked during 2009 through 2012

due to the financial crisis of

2008-09 and the ensuing severe

recession, as well as the effects

of the government’s response

thereto. As an economic

recovery took hold, the primary

deficit-to-GDP ratio fell,

averaging 2.1 percent from 2013 through 2019. The ratio spiked again in 2020 rising to 13.3 percent of

GDP due to increased spending to address the COVID-19 pandemic and lessen the economic impacts of

stay-at-home and social distancing orders on individuals, hard-hit industries, and small businesses.

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 ratio is projected to fall

to 4.7 percent in 2022 and then decreases to 4.3 percent in 2027. After 2027, however, increased spending

for Social Security and health programs2 due to the continued retirement of the baby boom generation and

increases in health care costs is projected to result in increasing primary deficits that reach 5.0 percent of

GDP in 2030. The primary deficit peaks at 6.3 percent of GDP in 2043, then gradually decreases beyond

that point as the aging of the population continues at a slower pace, and reaches 4.9 percent in 2096, the

last year of the projection period.

• 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. The most recent Social Security and Medicare Trustees’ Reports were released in

August 2021, reflecting the effects of the COVID-19 pandemic and including the projected depletion

dates in Table 1. Projections for the other categories of receipts and spending are consistent with the

economic and demographic assumptions in the Trustees’ Reports and include updates for actual budget

results for FY 2021 or budgetary estimates from the President’s FY 2022 Budget. Where possible, those

budget totals are adjusted before spending is projected to remove outlays for programs or activities that

are judged to be temporary, such as spending related to the COVID-19 pandemic and economic recovery.

Where not possible, budget totals were not adjusted resulting in higher projections of future spending,

increasing the uncertainty surrounding this year’s projections.

• The persistent long-term gap between projected receipts and total spending shown in Chart 6 occurs

despite the projected effects of the PPACA3 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.

2 See the 2021 Trustees Report for Medicare and Social Security and the most recent Medicaid Actuarial Report.

3 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 2021

Medicare Trustees’ Report for additional information).
EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT 10

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 6, along with those for interest rates and GDP, determine the debtto-GDP ratio projections in Chart 7.

• The debt-to-GDP ratio was

approximately 100 percent at the

end of FY 2021, and under

current policy and based on this

report’s assumptions is projected

to reach 701 percent in 2096.

• 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 higher than both the 2020 and

2019 Financial Report

projections.

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 2021 is 6.2 percent of GDP

(compared to 5.4 percent for 2020).

• 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 6.2 percent of GDP on average over

the next 75 years. The fiscal gap represents 32.4 percent of 75-year PV receipts and 25.0 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.
11 EXECUTIVE SUMMARY TO THE 2021 FINANCIAL REPORT OF THE U.S. GOVERNMENT

o Table 2 shows that, if action is delayed by 10 years, the estimated magnitude of primary surplus

increases necessary to close the 75-year fiscal gap increases by 17.7 percent from 6.2 percent of GDP

on average over 75 years to 7.3 percent on average over 65 years; if action is delayed by 20 years, the

magnitude of reforms necessary increases by an additional 23.3 percent.

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.

Find Out More

The FY 2021 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;

• 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 228

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.