The Nation’s Fiscal Health: Road Map Needed to Address Projected Unsustainable Debt Levels

The federal government faces an unsustainable fiscal future. If policies don’t change, debt will continue to grow faster than the economy. Our review of the nation’s fiscal health found:

• Large annual budget deficits drive debt growth, as the government borrows to finance spending that exceeds revenue
• Interest costs rise and make up a larger share of total spending as overall debt and interest rates increase over the long-term
• Risks include delays in raising or suspending the debt limit, and events, such as natural disasters

We previously suggested developing a plan to address fiscal sustainability and identified pieces of an effective plan.

Federal spending on interest costs will increase over time.