Long-Term Budget Outlook: Deficits Matter--Saving Our Future Requires Tough Choices Today
Published: 2007-01-23T00:00:00

Fast Facts:

Highlights:
section_title: What GAO Found
paragraphs: The Comptroller General testified before Congress for a hearing entitled "Why Deficits Matter." The presentation touched on several points. First, the current financial condition in the United States is worse than is widely understood. Second, the current fiscal path is both imprudent and unsustainable. Third, improvements in information and processes are needed and can help. And finally, meeting the long-term fiscal challenge will require (1) significant entitlement reform to change the path of those programs; (2) reprioritizing, restructuring and constraining other spending programs; and (3) more revenues--hopefully through a reformed tax system. This will take bipartisan cooperation and compromise.

section_title: Letter
paragraphs: I appreciate this invitation to talk with you about why deficits matter— about our nation’s long-term fiscal outlook and the challenge it presents.  Your decision to focus on this issue is an important statement about the  seriousness with which you view this challenge and your commitment to  begin to address it.
You all have entitled this hearing “Why Deficits Matter.”  Let me start with  a very simple reason:  they matter for the world we leave our children and  grandchildren.  As all of you know—and as I will discuss in this  statement—it is not the short-term deficit that threatens us; it is the long- term fiscal outlook.  We are on an imprudent and unsustainable path.  Continuing on our current fiscal path would gradually erode, if not  suddenly damage, our economy, our standard of living, and ultimately  even our domestic tranquility and our national security.  This is a great  nation with much to be proud of and much to be thankful for. But today  we are failing in one of our most important stewardship responsibilities— our duty to pass on a country better positioned to deal with the challenges  of the future than the one we were given.
The picture I will lay out for you today is not a pretty one and it’s getting  worse with the passage of time. But this nation has met difficult  challenges—including challenges to its very existence—in the past and I’m  confident that we can do so again.
The essence of my message today is no surprise to Members of this  Committee:    Our current financial condition is worse than is widely understood.    Our current fiscal path is both imprudent and unsustainable.   Improvements in information and processes are needed and can help.    Meeting our long-term fiscal challenge will require (1) significant  entitlement reform to change the path of those programs; (2)  reprioritizing, restructuring and constraining other spending programs;  and (3) more revenues—hopefully through a reformed tax system.   This will take bipartisan cooperation and compromise.
The time to act to save our future is now!
When fiscal year 2006 ended a great deal of attention was paid to the fact  that at $248 billion “the deficit” came in lower than originally predicted  and lower than in 2005.  And just this week press reports have noted  that—as figure 1 shows—the (unified) deficit as a share of the economy is  not terribly high.
This is all true—and it is also misleading.  First, a single year’s unified  budget deficit is not the critical issue here. Certainly this improvement in  the 1-year fiscal picture is better than a worsening in that picture, but it did  not fundamentally change our long-term fiscal outlook. In fact, the U.S.  government’s total reported liabilities, net social insurance commitments,  and other fiscal exposures continue to grow and now total approximately  $50 trillion, representing approximately four times the nation’s total  output, or gross domestic product (GDP) in fiscal year 2006, up from about  $20 trillion, or two times GDP in fiscal year 2000.
Further, the long-term challenge is fast becoming a short-term one as the  first of the baby boomers become eligible for early retirement under Social  Security on January 1, 2008—less than one year—and for Medicare  benefits in 2011—less than 4 years from now. The budget and economic  implications of the baby boom generation’s retirement have already  become a factor in the Congressional Budget Office’s (CBO) 10-year  baseline projections and will only intensify as the baby boomers age.  Simply put, our nation is on an imprudent and unsustainable fiscal path.  Herbert Stein once said that something that is not sustainable will stop.
That, however, should not give us comfort. It is more prudent to change  the path than to wait until a crisis occurs.
And that brings me to my next point. While restraint in the near term and  efforts to balance the budget over the next 5 years can be positive, it is  important that actions to achieve this also address the long-term fiscal  outlook. The real problem is not the near-term deficit—it is the long-term  fiscal outlook. It is important to look beyond year 5 or even year 10. Both  the budget and the budget process need more transparency about and  focus on the long-term implications of current and proposed spending and  tax policies. In this testimony I will suggest a number of things that I  believe will help in this area.
subsections: section_title: Our Fiscal and Financial Condition Is Worse Than Widely Understood
paragraphs: A great deal of budget reporting focuses on a single number—the unified  budget deficit, which was $248 billion in fiscal year 2006.   This largely  cash-based number represents the difference between revenues and  outlays for the government as a whole. It is an important measure since it  is indicative of the government’s draw on today’s credit markets—and its  claim on today’s economy.  But it also masks the difference between  Social Security’s cash flows and those for the rest of the budget. Therefore  we also need to look beneath the unified deficit at the on-budget deficit— what I like to call the “operating deficit.” And, finally, we should be  looking at the financial statements’ report of net operating cost—the  accrual-based deficit.
Social Security currently takes in more tax revenue than it needs to pay  benefits. This cash surplus is invested in Treasury securities and earns  interest in the form of additional securities. The difference between the  on-budget deficit and the unified budget deficit is the total surplus in  Social Security (cash and interest) and the U.S. Postal Service. Excluding  consideration of the $185 billion surplus in Social Security and a $1 billion  surplus in the Postal Service, the on-budget deficit was $434 billion in  2006. Figure 2 shows graphically how the on-budget deficit and the off- budget surplus have related and combine to lead to the unified deficit.  Since the Social Security trust fund invests any receipts not needed to pay  benefits in Treasury securities, its cash surplus reduces the amount the  Treasury must borrow from the public. As I will note later, this pattern of  cash flows is important—and it is projected to come to an end just 10  years from now.
The third number, net operating cost, is the amount by which costs exceed  revenue and it is reported in the federal government’s financial statements,  which are prepared using generally accepted accounting principles. Costs  are recorded on an accrual basis—namely, in the period when goods are  used or services are performed as opposed to when the resulting cash  payments are made. However, most revenues, on the other hand, are  recorded on the modified cash basis—that is, they are recorded when  collected. The net operating cost can be thought of as the accrual deficit.  The accrual measure primarily provides more information on the longer- term implications of today’s policy decisions and operations by showing  certain costs incurred today but not payable for years to come, such as  civilian and military pensions and retiree health care. In fiscal year 2006  net operating cost was $450 billion.
All three of these numbers are informative. However, neither accrual nor  cash measures alone provide a full picture of the government’s fiscal  condition or the cost of government. Used together, they present  complementary information and provide a more comprehensive picture of  the government’s financial condition today and fiscal position over time.  For example, the unified budget deficit provides information on borrowing  needs and current cash flow. The accrual deficit provides information on  the current cost of government, but it does not provide information on  how much the government has to borrow in the current year to finance  government activities. Also, while accrual deficits provide more  information on the longer-term consequences of current government  activities, they do not include the longer-term cost associated with social  insurance programs like Social Security and Medicare. In addition, they  are not designed to provide information about the timing of payments and  receipts, which can be very important. Therefore, just as investors need  income statements, statements of cash flow, and balance sheets to  understand a business’s financial condition, both cash and accrual  measures are important for understanding the government’s financial  condition.
Although looking at both the cash and accrual measures provides a more  complete picture of the government’s fiscal stance today and over time  than looking at either alone, even these together do not tell us the full  story. For example, as shown in table 1, all three of these deficits  improved between fiscal year 2005 and fiscal year 2006.  This  improvement, however, did not result from a change in the fundamental  drivers of our long-term challenge and did not signal an improvement in  that outlook.  To understand the long-term implications of our current  path requires more than a single year’s snapshot. In this regard, the long- term outlook has worsened significantly in the last several years. That is  why for more than a decade GAO has been running simulations to tell this  longer-term story.
section_title: The Current Long- term Fiscal Outlook is Unacceptable
paragraphs: As I mentioned, it is not the recent past shown in figure 1—nor the outlook  for this year—that should concern us.  Rather it is the picture in figure 3  that should worry us.
Long-term fiscal simulations by GAO, CBO, and others all show that we  face large and growing structural deficits driven primarily by rising health  care costs and known demographic trends. GAO runs simulations under  two sets of assumptions. One takes the legislatively-mandated baseline  from CBO for the first 10 years and then keeps discretionary spending and  revenues constant as a share of GDP while letting Social Security,  Medicare, and Medicaid grow as projected by the Trustees and CBO under  midrange assumptions. The other, perhaps more realistic, scenario based  on the Administration’s announced policy preferences changes only two  things in the first 10 years:  discretionary spending grows with the  economy and all expiring tax provisions are extended. Like the “Baseline  Extended” scenario, after 10 years both revenues and discretionary  spending remain constant as a share of the economy.  As figure 3 shows,  deficits spiral out of control under either scenario. We will be updating  these figures with the release of the new CBO baseline later this month,  but even with the lower deficit in 2006, the long-term picture will remain  daunting.
Looking more closely at each scenario gives a fuller understanding of what  the impact of continuing these trends would have on what government  does. And it shows us “Why Deficits Matter.”
First, it makes sense to look back to 2001—it is worth understanding how  much worse the situation has become. As I noted, despite some recent  improvements in short-term deficits, the long-term outlook is moving in  the wrong direction.
Figures 4 and 5 show the composition of spending under our “Baseline  Extended” scenario in 2001 and 2006. Even with short-term surpluses, we  had a long-term problem in 2001, but it was more than 40 years out.  Certainly an economic slowdown and various decisions driven by the  attacks of 9/11 and the need to respond to natural disasters have  contributed to the change in outlook. However, these items alone do not  account for the dramatic worsening. Tax cuts played a major role, but the  single largest contributor to the deterioration of our long-term outlook  was the passage of the Medicare prescription drug benefit in 2003.
Figure 5 illustrates today’s cold hard truth, that neither slowing the growth  in discretionary spending nor allowing the tax provisions to expire—nor  both together—would eliminate the imbalance. This is even clearer under  the more realistic scenario as shown in figure 6. Estimated growth in the  major entitlement programs results in an unsustainable fiscal future  regardless of whether one assumes future revenue will be somewhat  above historical levels as a share of the economy as in the first simulation  (fig. 5) or lower as shown in figure 6.
Both these simulations remind us “Why Deficits Matter.”  They illustrate  that without policy changes on the spending and revenue side of the  budget, the growth in spending on federal retirement and health  entitlements will encumber an escalating share of the government’s  resources. A government that in our children’s lifetimes does nothing more  than pay interest on its debt and mail checks to retirees and some of their  health providers is unacceptable.
Although Social Security is a major part of the fiscal challenge, contrary to  popular perception, it is far from our biggest challenge. While today Social  Security spending exceeds federal spending for Medicare and Medicaid,  that will change. Over the past several decades, health care spending on  average has grown much faster than the economy, absorbing increasing  shares of the nation’s resources, and this rapid growth is projected to  continue. CBO estimates that Medicare and Medicaid spending will reach  6.3 percent of GDP in 2016, up from 4.6 percent this year (2007), while  spending for Social Security will only reach 4.7 percent of GDP in 2016 up  from 4.2 percent this year. For this reason and others, rising health care  costs pose a fiscal challenge not just to the federal budget but also to  states, American business, and our society as a whole.
While there is always some uncertainty in long-term projections, two  things are certain: the population is aging and the baby boom generation is  nearing retirement age. The aging population and rising health care  spending will have significant implications not only for the budget but also  for the economy as a whole. Figure 7 shows the total future draw on the  economy represented by Social Security, Medicare, and Medicaid. Under  the 2006 Trustees’ intermediate estimates and CBO’s long-term Medicaid  estimates, federal spending for these entitlement programs combined will  grow to 15.5 percent of GDP in 2030 from today’s 9 percent. This graphic is  another illustration of why we have to act. I do not believe we are  prepared to have programs that provide income for us in retirement and  pay our doctors absorb this much of our children’s and grandchildren’s  economy. It is clear that taken together, Social Security, Medicare, and  Medicaid under current law represent an unsustainable burden on future  generations.
While Social Security, Medicare, and Medicaid dominate the long-term  outlook, they are not the only federal programs or activities that bind the  future. Part of what we owe the future is leaving enough flexibility to meet  whatever challenges arise.  So beyond dealing with the “big 3,” we need to  look at other policies that limit that flexibility—not to eliminate all of them  but to at least be aware of them and make a conscious decision about  them.  The federal government undertakes a wide range of programs,  responsibilities, and activities that obligate it to future spending or create  an expectation for spending and potentially limit long-term budget  flexibility. GAO has described the range and measurement of such fiscal  exposures—from explicit liabilities such as environmental cleanup  requirements to the more implicit obligations presented by life-cycle costs  of capital acquisition or disaster assistance.
Figure 8 shows that despite improvement in both the fiscal year 2006  reported net operating cost and the cash-based budget deficit, the U.S.  government’s major reported liabilities, social insurance commitments,  and other fiscal exposures continue to grow. They now total  approximately $50 trillion—about four times the nation’s total output  (GDP) in fiscal year 2006—up from about $20 trillion, or two times GDP in  fiscal year 2000.
Clearly, despite recent progress on our short-term deficits, we have been  moving in the wrong direction in connection with our long-range  imbalance in recent years.  Our long-range imbalance is growing daily due  to continuing deficits, known demographic trends, rising health care costs,  and compounding interest expense.
We all know that it is hard to make sense of what “trillions” means. Figure  9 provides some ways to think about these numbers:  if we wanted to put  aside today enough to cover these promises, it would take $170,000 for  each and every American or approximately $440,000 per American  household.  Considering that median household income is about $46,000,  the household burden is about 9.5 times median income.
section_title: Process and Presentational Changes to Increase Transparency and Focus on Long-Term Consequences Can Help
paragraphs: Since at its heart the budget challenge is a debate about the allocation of  limited resources, the budget process can and should play a key role in  helping to address our long-term fiscal challenge and the broader  challenge of modernizing government for the 21st century. I have said that  Washington suffers from myopia and tunnel vision. This can be especially  true in the budget debate in which we focus on one program at a time and  the deficit for a single year or possibly the costs over 5 years without  asking about the bigger picture and whether the long term is getting better  or worse. We at GAO are in the transparency and accountability business.  Therefore it should come as no surprise that I believe we need to increase  the understanding of and focus on the long term in our policy and budget  debates. To that end—as I noted earlier—I have been talking with a  number of Members of the Senate and the House as well as various groups  concerned about this issue concerning a number of steps that might help.  I’ve attached a summary of some of these ideas to this statement. Let me  highlight several critical elements here.
The President’s budget proposal should again cover 10 years. This is  especially important given that some policies—both spending and tax— cost significantly more (or lose significantly more revenue) in the second 5  years than in the first. In addition, the budget should disclose the impact of  major tax or spending proposals on the short, medium, and long term.
The executive branch should also provide information on fiscal  exposures—both spending programs and tax expenditures—that is, the  long-term budget costs represented by current individual programs,  policies, or activities as well as the total.
The budget process needs to pay more attention to the long-term  implication of the choices being debated. For example, elected  representatives should be provided with more explicit information on the  long-term costs of any major tax or spending proposal before it is voted  upon. It is sobering to recall that during the debate over adding  prescription drug coverage to Medicare, a great deal of attention was paid  to whether the 10-year cost was over or under $400 billion. Not widely  publicized—and certainly not surfaced in the debate—was that the present  value of the long-term cost of this legislation was about $8 trillion!
Of course, when you are in a hole, the first thing to do is stop digging. I  have urged reinstitution of the statutory controls—both meaningful caps  on discretionary spending and pay-as-you-go (PAYGO) on both the tax and  spending sides of the ledger—that expired in 2002. However given the  severity of our current challenge, Congress should look beyond the return  to PAYGO and discretionary caps. Mandatory spending cannot remain on  autopilot—it will not be enough simply to prevent actions to worsen the  outlook. We have suggested that Congress might wish to design “triggers”  for mandatory programs—some measure that would prompt action when  the spending path increased significantly. In addition, Congress may wish  to look at rules to govern the use of “emergency supplementals.” However,  as everyone in this committee knows, these steps alone will not solve the  problem. That is why building in more consideration of the long-term  impact of decisions is necessary.
section_title: Meeting the Long- Term Fiscal Challenge Requires Action on the Spending and Tax Sides of the Budget-- Cooperation and Compromise Will Be Necessary
paragraphs: There is no easy way out of the challenge we face.  Economic growth is  essential, but we will not be able to simply grow our way out of the  problem. The numbers speak loudly: our projected fiscal gap is simply too  great. To “grow our way out” of the current long-term fiscal gap would  require sustained economic growth far beyond that experienced in U.S.  economic history since World War II.
Similarly, those who believe we can solve this problem solely by cutting  spending or solely raising taxes are not being realistic.  While the  appropriate level of revenues will be part of the debate about our fiscal  future, making no changes to Social Security, Medicare, Medicaid, and  other drivers of the long-term fiscal gap would require ever-increasing tax  levels—something that seems both inappropriate and implausible. That is  why I have said that substantive reform of Social Security and our major  health programs remains critical to recapturing our future fiscal flexibility.  I believe we must start now to reform these programs.
Although the long-term outlook is driven by Social Security and health  care costs, this does not mean the rest of the budget can be exempt from  scrutiny. Restructuring and constraint will be necessary beyond the major  entitlement programs. This effort offers us the chance to bring our  government and its programs in line with 21st century realities. Many tax  expenditures act like entitlement programs, but with even less scrutiny.   Other programs and activities were designed for a very different time.
Taken together, entitlement reform and reexamination of other programs  and activities could engender a national discussion about what Americans  want from their government and how much they are willing to pay for  those things.
Finally, given demographic and health care cost trends, the size of the  spending cuts necessary to hold revenues at today’s share of GDP seems  implausible.  It is not realistic to assume we can remain at 18.2 percent of  GDP—we will need more revenues.  Obviously we want to minimize the  tax burden on the American people and we want to remain competitive  with other industrial nations—but in the end the numbers have to add up.
As I noted, we need to start with real changes in existing entitlement  programs to change the path of those programs.  However, reform of the  major entitlement programs alone will not be sufficient.  Reprioritization  and constraint will be necessary in other spending programs.  Finally, we  will need more revenues—hopefully through a reformed tax system.
The only way to get this done is through bipartisan cooperation and  compromise—involving both the Congress and the White House.
Delay only makes matters worse. GAO’s simulations show that if no action  is taken, balancing the budget in 2040 could require actions as large as  cutting total federal spending by 60 percent or raising federal taxes to two  times today’s level.
section_title: Further Delay Will Only Worsen the Outlook
paragraphs: For many years those of us who talk about the need to put Social Security  on a sustainable course and to reform Medicare have talked about the  benefits of early action. Acting sooner rather than later can turn  compound interest from an enemy to an ally. Acting sooner rather than  later permits changes to be phased in more gradually and gives those  affected time to adjust to the changes. Delay does not avoid action—it just  makes the steps that have to be taken more dramatic and potentially  harder.
Unfortunately, it is getting harder to talk about early action—the future is  upon us.
Next year members of the baby boom generation start to leave the labor  force. Figure 10 shows the impact of demographics on labor force growth.
Reflecting this demographic shift, CBO projects the average annual growth  rate of real GDP will decline from 3.1 percent in 2008 to 2.6 percent in the  period 2012–2016. This slowing of economic growth will come just as  spending on Social Security, Medicare and Medicaid will begin to  accelerate—accounting for 56 percent of all federal spending by 2016  compared to 43 percent in 2006.
As I noted earlier, today Social Security’s cash surplus helps offset the  deficit in the rest of the budget, thus reducing the amount Treasury must  borrow from the public and increasing budget flexibility—but this is about  to change.
Growth in Social Security spending is expected to increase from an  estimated 4.8 percent in 2008 to 6.5 percent in 2016. The result, as shown  in figure 11, is that the Social Security surpluses begin a permanent decline  in 2009. At that time the rest of the budget will begin to feel the squeeze  since the ability of Social Security surpluses to offset deficits in the rest of  the budget will begin to shrink. In 2017 Social Security will no longer run a  cash surplus and will begin adding to the deficit. That year Social Security  will need to redeem the special securities it holds in order to pay benefits.  Treasury will honor those claims—the United States has never defaulted.  But there is no free money. The funds to redeem those securities will have  to come from higher taxes, lower spending on other programs, higher  borrowing from the public, or a combination of all three.
I spoke before of how big the changes would have to be if we were to do  nothing until 2040.  Of course, we won’t get to that point—something will  force action before then.  If we act now, we have more choices and will  have more time to phase-in related changes.
section_title: Concluding Remarks
paragraphs: Chairman Spratt, Mr. Ryan, Members of the Committee—in holding this  hearing even before the President’s Budget is submitted you are signaling  the importance of considering any proposal within the context of the long- term fiscal challenge. This kind of leadership will be necessary if progress  is to be made.
I have long believed that the American people can accept difficult  decisions as long as they understand why such steps are necessary. They  need to be given the facts about the fiscal outlook: what it is, what drives  it, and what it will take to address it. As most of you know, I have been  investing a good deal of time in the Fiscal Wake-Up Tour (FWUT) led by  the Concord Coalition. Scholars from both the Brookings Institution and  the Heritage Foundation join with me and Concord in laying out the facts  and discussing the possible ways forward. In our experience, having these  people, with quite different policy views on how to address our long-range  imbalance, agree on the nature, scale, and importance of the issue—and  on the need to sit down and work together—resonates with the audiences.  Although the major participants have been Concord, GAO, Brookings, and  Heritage, others include such organizations as the Committee for  Economic Development (CED); the American Institute of Certified Public  Accountants (AICPA); the Association of Government Accountants (AGA);  the National Association of State Auditors, Comptrollers and Treasurers  (NASACT); and AARP. The FWUT also has received the active support and  involvement of community leaders, local colleges and universities, the  media, the business community, and both former and current elected  officials. We have been to 17 cities to-date. The discussion has been  broadcast on public television stations in Atlanta and Philadelphia. Earlier  this month OMB Director Portman and former Senator Glenn joined us at  an event at the John Glenn School of Public Affairs at Ohio State  University in Columbus, Ohio.
The specific policy choices made to address this fiscal challenge are the  purview of elected officials. The policy debate will reflect differing views  of the role of government and differing priorities for our country. What the  FWUT can do—and what I will continue to do—is lay out the facts,  debunk various myths, and prepare the way for tough choices by elected  officials. The American people know—or sense—that there is something  wrong; that these deficits are a problem. If they understand that there truly  is no magic bullet—if they understand that    we cannot grow our way out of this problem;    eliminating earmarks will not solve the problem;    wiping out fraud, waste, and abuse will not solve the problem;    ending the war or cutting way back on defense will not solve the problem;   restraining discretionary spending will not solve the problem; and  letting the recent tax cuts expire will not solve this problem; then the American people can engage with you in a discussion about what  government should do and how.
People ask me how I think this can happen. I know that some Members  believe a carefully structured commission will be necessary to prepare a  package while others feel strongly that elected officials should take up the  task of developing that package.  Whatever the vehicle, success will  require the active and open-minded involvement of both parties in and  both houses of the Congress and of the President. With that it should be  possible to develop a package which accomplishes at least three things:   (1) a comprehensive solution to the Social Security imbalance—one that is  not preprogrammed to require us to have to come back again, (2) Round I  of comprehensive tax reform, and (3) Round I of Health Care Reform.
This is a great nation. We have faced many challenges in the past and we  have met them. It is a mistake to underestimate the commitment of the  American people to their children and grandchildren; to underestimate  their willingness and ability to hear the truth and support the decisions  necessary to deal with this challenge. We owe it to our country, to our  children and to our grandchildren to address this fiscal imbalance.  The  world will present them with new challenges—we need not bequeath them  this burden too. The time for action is now.
Mr. Chairman, Mr. Ryan, Members of the Committee, let me repeat my  appreciation for your commitment and concern in this matter. We at GAO  stand ready to assist you in this important endeavor.
section_title: Contact and Acknowledgments
paragraphs: For further information on this testimony, please contact Susan J. Irving at  (202) 512-9142 or irvings@gao.gov. Contact points for our Offices of  Congressional Relations and Public Affairs may be found on the last page  of this testimony. Individuals making key contributions to this testimony  include Jay McTigue, Assistant Director; Linda Baker and Melissa Wolf.
section_title: Appendix I: Ideas for Improving the Transparency of Long-term Costs and the Attention Paid to These Costs before Decisions Are Made
subsections: section_title: Supplemental Reporting in the President’s Annual Budget Submission
paragraphs: Produce an annual Statement of Fiscal Exposures, including a concise list  and description of exposures, cost estimates where possible, and an  assessment of methodologies and data used to produce such cost  estimates.  Increase the transparency of tax expenditures by including them in the  annual Fiscal Exposures Statement and, where possible, also showing  them along with spending and credit programs in the same policy area.
Provide information on the impact of major tax or spending proposals on  short-term, mid-term, and long-term fiscal exposures and on the path of  surplus/deficit and debt as percent of gross domestic product (GDP) over  10-year and longer-term horizons (and assuming no sunset if sunset is part  of the proposal).
Cover 10 years in the budget.    Consider requiring the President to include in his annual budget  submission a long-term fiscal goal (e.g., balance, surplus, or deficit as  percent of GDP).
section_title: Additional Executive Branch Reports
paragraphs: Prepare and publish a Summary Annual Report or Citizen’s Summary that  summarizes, in a clear, concise, plain English, and transparent manner,  key financial and performance information included in the Consolidated  Financial Report.
Prepare and publish a report on long-range fiscal sustainability every 2 to 4  years.
section_title: Additional Cost Information on Proposals before Adoption
paragraphs: Require improved disclosure—at the time proposals are debated but  before they are adopted—of the long-term costs of individual mandatory  spending and tax proposals over a certain size and for which costs will  ramp up over time.
section_title: GAO Reports
paragraphs: An annual report or reports by GAO including comments on the  Consolidated Financial Statement (CFS), results of the latest long-term  fiscal simulations, comments on the adequacy of information regarding  long-term cost implications of existing and proposed policies in the  previous year as well as any other significant financial and fiscal issues.
section_title: Other Areas in Which GAO Has Suggested That Congress Might Consider Changing the Budget Treatment
paragraphs: Use accrual budgeting for the following areas where cash basis obligations  do not adequately represent the government’s commitment:    employee pension programs (pre-Federal Employee Retirement System  employees);  retiree health programs; and  federal insurance programs, such as the Pension Benefit Guaranty  Corporation and crop insurance.
Explore techniques for expanding accrual budgeting to    environmental cleanup and    social insurance—could consider deferring recognition of social  insurance receipts until they are used to make payments in the future  (this was suggested in GAO’s accrual budgeting report as an idea to  explore, possibly with a commission designed to explore budget  concepts).
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