1 EXECUTIVE SUMMARY TO THE 2023 FINANCIAL REPORT OF THE U.S. GOVERNMENT
EXECUTIVE SUMMARY TO THE 2023 FINANCIAL REPORT OF THE U.S. GOVERNMENT 2

Executive Summary to the FY 2023 

Financial Report of the United States Government

The FY 2023 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 the Financial Report is 

important to all Americans.

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

ended September 30, 2023, and 2022. 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 2023:

• The budget deficit increased by $319.7 billion (23.2 percent) to $1.7 trillion and net operating cost 

decreased by $753.8 billion (18.1 percent) to $3.4 trillion.

• Net operating cost decreased due largely to significant decreases in non-cash costs (including decreases in

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

employee and veteran benefits programs (which do not affect the current year deficit) and reestimates of 

long-term student loan costs).

• The government’s gross costs of $7.7 trillion, less $539.5 billion in revenues earned for goods and 

services provided to the public, plus $760.6 billion in net losses from changes in assumptions yields the 

government’s net cost of $7.9 trillion, a decrease of $1.2 trillion (13.3 percent) from FY 2022.

• Tax and other revenues decreased by $460.3 billion to $4.5 trillion. Deducting these revenues from net 

cost yields the federal government’s “bottom line” net operating cost of $3.4 trillion referenced above.

• Comparing total government assets of $5.4 trillion (including $1.7 trillion of loans receivable, net and 

$1.2 trillion of PP&E) to total liabilities of $42.9 trillion (including $26.3 trillion in federal debt and 

interest payable, and $14.3 trillion of federal employee and veteran benefits payable) yields a negative net 

position of $37.5 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 $73.2 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 2023. Under current policy and 

based on this report’s assumptions, it is projected to reach 531 percent by 2098. 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 $78.4 trillion, a $2.5 trillion increase over 2022 social 

insurance projections.
3 EXECUTIVE SUMMARY TO THE 2023 FINANCIAL REPORT OF THE U.S. GOVERNMENT

Where We Are Now 

The government’s financial position and condition have traditionally been expressed through the Budget, 

focusing on surpluses, deficits, and debt. However, this primarily cash-based discussion of the government’s net 

outlays (deficit) or net receipts (surplus) tells only part of the story. The government’s accrual-based net position, 

(the difference between its assets and liabilities, adjusted for unmatched transactions and balances), and its 

“bottom line” net operating cost (the difference between its revenues and costs) are also key financial indicators. 

The following includes brief discussions of some of the diminishing effects of the pandemic on the government’s 

financial results for FY 2023. Please refer to Note 29—COVID-19 Activity and other disclosures in this Financial 

Report, as well as in the individual entities’ financial statements for more information.

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. 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 2019 - 2023. During FY 2023:

• A $456.8 billion decrease in receipts 

more than offset a $137.1 billion 

decrease in outlays resulting in a 

$319.7 billion (23.2 percent) increase 

in the budget deficit from $1.4 trillion 

to $1.7 trillion. 

• Net operating cost decreased $753.8 

billion or 18.1 percent from $4.2 

trillion to $3.4 trillion, due mostly to a 

$1.2 trillion or 13.3 percent decrease 

in net cost which more than offset a 

$460.3 billion or 9.3 percent decrease 

in tax and other revenues.

The $1.7 trillion difference between the 

budget deficit and net operating cost for FY 

2023 is primarily due to accrued costs (incurred but not necessarily paid) that are included in net operating cost, 

but not the budget deficit. These are primarily actuarial costs related to federal employee and veteran benefits

programs, particularly at VA, DOD, and OPM. Other 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.
EXECUTIVE SUMMARY TO THE 2023 FINANCIAL REPORT OF THE U.S. GOVERNMENT 4

Costs and Revenues 

The government’s “bottom line” net operating cost decreased $753.8 billion (18.1 percent) during FY 2023 

to $3.4 trillion. It is calculated as follows:

• Starting with total gross costs of $7.7 

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 $7.9 

trillion (see Chart 2), a decrease of 

$1.2 trillion (13.3 percent) from FY 

2022. This net decrease is the 

combined effect of many offsetting 

increases and decreases across the 

government. For example:

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

OPM 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 $760.6 billion in FY 2023, a loss decrease (and a corresponding

net cost decrease) of $1.4 trillion compared to FY 2022.

o In particular, VA net costs decreased $479.6 billion due largely to decreased losses from changes in 

assumptions as referenced above, partially offset by an increase in costs as a result of legislation 

expanding and extending eligibility for veteran’s benefits.

o DOD net costs decreased $455.6 billion due primarily to a $437.7 billion loss decrease from changes 

in assumptions as referenced above. However, most of DOD’s net costs included those related to 

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

o A $222.7 billion decrease in Treasury net costs was largely due to a decrease in costs associated with 

Treasury’s pandemic relief programs, including: 1) the Coronavirus State and Local Fiscal Recovery 

Funds; and 2) COVID-19 related refunds and other payments such as the EIP and advances for child 

tax credits. 

o Education net costs decreased $521.0 billion due largely to the combined effect of: 1) an FY 2022 

cost increase of $330.9 billion due largely to a $337.3 billion loan modification stemming from the 

announced broad-based student loan debt relief; and 2) an FY 2023 cost decrease of $319.9 billion 

from a downward modification to reverse the broad-based student loan debt relief, as a result of the 

Supreme Court’s ruling on Biden v. Nebraska. Education’s FY 2023 net costs were also impacted by: 

1) $71.4 billion in upward cost reestimates of the Department’s existing loan portfolio; and 2) $115.7 

billion of upward modifications related to COVID-19 administrative actions, changes to repayment 

plans, and other programmatic changes. 

o A $54.1 billion net cost increase at HHS primarily due to a $116.1 billion increase across the 

Medicare and Medicaid benefits programs largely associated with increasing benefits payments. This 

cost increase was offset by a $62.0 billion cost decrease across all other HHS segments primarily due 

to decreases in COVID-19 costs. 
5 EXECUTIVE SUMMARY TO THE 2023 FINANCIAL REPORT OF THE U.S. GOVERNMENT

o SSA net costs increased $138.8 billion due largely to a 2.5 percent increase in the number of OASI 

beneficiaries, combined with an 8.7 percent COLA provided to beneficiaries in 2023. 

o Interest costs related to federal debt securities held by the public increased by $181.5 billion due 

largely to increases in outstanding debt held by the public and the average interest rates, which were 

offset by a decrease in inflation adjustments.

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

2023 “bottom line” net operating cost 

of $3.4 trillion.

o From Chart 3, total government tax 

and other revenues decreased by 

$460.3 billion (9.3 percent) to 

about $4.5 trillion for FY 2023 due 

primarily to a decline in individual

income and tax withholdings and 

corporate income taxes as well as 

decreased deposits of earnings

from the Federal Reserve due to 

increased interest rates. 

o Together, individual income tax 

and tax withholdings, and 

corporate income taxes accounted 

for about 91.4 percent of total tax 

and other revenues in FY 2023. 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, 2023:

• More than three-fourths of the federal 

government’s total assets ($5.4 

trillion) consist of: 1) $922.2 billion in 

cash and monetary assets; 2) $423.0 

billion in inventory and related 

property; 3) $1.7 trillion in loans 

receivable, net (primarily student 

loans); and 4) $1.2 trillion in net 

PP&E.

o Cash and monetary assets ($922.2 

billion) is comprised largely of the 

operating cash of the U.S. 

government. Operating cash held 

by Treasury increased $21.9 billion 

(3.5 percent) to $638.9 billion 

during FY 2023.

o Inventory and related property ($423.0 billion) includes: 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 
EXECUTIVE SUMMARY TO THE 2023 FINANCIAL REPORT OF THE U.S. GOVERNMENT 6

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 ($1.7 trillion) is comprised of loans provided by multiple agencies, including 

Education and SBA, 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 net loan portfolio increased by $261.0 billion (18.2

percent) during FY 2023. This net increase was largely due to a $214.3 billion increase in Education’s

Federal Direct Student Loans, net, primarily due to a reversal of the broad-based student loan debt 

relief as a result of the Supreme Court’s ruling in Biden v. Nebraska. Additional Loans Receivable, net 

increases included Treasury’s purchase of a $50 billion note issued by a trust created by FDIC in its 

receivership capacity and backed by a guarantee from the FDIC in its corporate capacity. These and 

other net increases were partially offset by a $49.6 billion decrease in SBA’s loan receivables, net, due 

largely to write-offs of direct disaster loans. Other changes included fluctuations in loan programs for 

HUD, DOT, and DFC. 

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 67.4 percent of the government’s 

reported general PP&E of $1.2 trillion as of September 30, 2023.

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 (e.g., national monuments, national 

parks) and are intended to be held indefinitely.

• Total liabilities ($42.9 trillion) consist mostly of: 1) $26.3 trillion in federal debt and interest payable; and 

2) $14.3 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, the FR System, foreign governments, and other non-federal entities.

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

2023, federal debt held by the public increased $2.0 trillion (8.3 percent) to $26.3 trillion.

o The government also reports about $6.9 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 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 

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

response to delays in raising the statutory debt limit, Treasury took extraordinary measures to meet the 

government’s obligations as they came due without exceeding the debt limit from January 19 through 

June 2, 2023. On June 3, 2023, P.L. 118-5 was enacted, suspending the debt limit through January 1, 

2025. On Monday, June 5, 2023, Treasury discontinued its use of extraordinary measures and resumed

normal debt management operations. At the end of FY 2023, debt subject to the statutory limit was 

$33.1 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 (see Note 

12—Federal Debt and Interest Payable).

o Federal employee and veteran benefits payable ($14.3 trillion) represents the amounts of benefits 

payable by agencies that 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 2023 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 2023 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. Over the course of FY 2023, the economy’s growth accelerated even as inflation continued 

to slow. In addition, labor markets remained tight and continued to generate a substantial number of jobs but also 

showed signs of very gradual easing over the course of FY 2023. 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 Financial 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 2023, which is similar to (but slightly above) the debt-toGDP ratio at the end of FY 2022. The long-term fiscal projections in this Financial 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 was 

elevated in 2020 and 2021 due to 

funding to support economic 

recovery, but increased receipts 

reduced the primary deficit-toGDP ratio to 10.8 percent in 

2021 from 13.3 percent in 2020. The primary deficit-to-GDP ratio in 2023 was 3.8 percent, increasing by 

0.2 percentage points from 3.6 percent in 2022 partially due to lower receipts.

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 2023 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 (P.L. 114-10) 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 2023, and under 

current policy and based on this 

report’s assumptions is projected 

to reach 531 percent in 2098.

• 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 2022 and 

2021 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 rate

updates 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 2023

Medicare Trustees Report for additional information).
9 EXECUTIVE SUMMARY TO THE 2023 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 2023 is 4.5 percent of GDP 

(compared to 4.9 percent for 2022). 

• 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 4.5 percent of GDP on average over 

the next 75 years. The fiscal gap represents 23.8 percent of 75-year PV receipts and 19.8 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 2034 or 2044, the estimated magnitude of primary surplus 

increases necessary to close the 75-year fiscal gap is 5.3 percent and 6.5 percent of GDP, respectively. 

The difference between the primary surplus increase necessary if reform begins in 2034 or 2044 and 

the increase necessary if reform begins in 2024, an additional 0.8 and 2.0 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 Executive Order 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 MD&A section of the Financial Report, 

many of the 24 CFO Act agencies have leveraged their FY 2023 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 2023 FINANCIAL REPORT OF THE U.S. GOVERNMENT 10

Find Out More

The FY 2023 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 218

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.