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The national debt will continue to grow at an unsustainable pace, reaching nearly twice the size of the economy in 30 years, according to the annual Government Accountability Office (GAO) report on the long-term fiscal outlook. GAO’s projections are similar to the results reported by the Congressional Budget Office in March. Here are some other key takeaways from the GAO report.
In addition, GAO describes potential risks to the country’s future fiscal condition that were not included in their baseline estimate, including public health emergencies and climate change. Regarding the former, GAO noted that the COVID-19 pandemic showed the significant impact that a pandemic can have, and with respect to the latter, the report observed that 2020 was the sixth consecutive year where the United States had 10 or more weather and climate disaster events, each costing more than $1 billion in damages.
GAO’s report urges Congress to consider establishing a long-term plan for fiscal sustainability. They recommend that policymakers consider the full range of options for such a plan — spending cuts, revenue increases, and adjustments to tax expenditures, as well as narrowing the tax gap, addressing improper payments, and implementing program reforms. The report advises: “after the pandemic recedes and the economy substantially recovers, Congress and the administration should quickly pivot to developing an approach to place the government on a sustainable long-term fiscal path.”
Image credit: U.S. Government Accountability Office