Reporting on Federal Fiscal Sustainability in the United States

Abstract

This paper presents a brief description of fiscal sustainability and government budget accounting issues - as they are being hotly debated in the United States. The debate is proceeding in the context of two projects underway at the Federal Accounting Standards Advisory Board (FASAB). One of these projects concerns the accounting of expenditures of U.S. social insurance programs - focusing on when program benefits should be 'recognized' and reported as federal liabilities. The second project involves estimating and reporting on the entire federal government’s financial condition, taking account of all projected expenditures and revenues under 'current laws.' The two projects are clearly related because estimates show that prospectively, an overwhelming share of U.S. federal fiscal imbalances are attributable to three major social insurance and welfare programs - Medicare, Medicaid, and Social Security.