Federal Liabilities: 2019 Update

Abstract

The Financial Report of the United States Government (FRUSG), released at the end of March, identifies total federal liabilities of $25.4 trillion as of September 30, 2018. The debt held by the public, $15.8 trillion, comprises 62% of these liabilities. Federal employees’ accrued benefits make up another 31%, and various other categories round out the remainder. But, absent from the official liabilities is a measure of current retirees’ expected Social Security and Medicare benefits. These benefits are conceptually equivalent to the federal employees’ accrued benefits. We suggest adding these portions of the elderly entitlement programs’ obligations – net benefits payable to current retirees – to the official liabilities of the federal government to arrive at a more comprehensive measure of total federal liabilities. Social Security and Medicare benefits payable to current retirees produces additional liabilities of $23.5 trillion. This amount exceeds the debt held by the public and that is 93% of the size of the official liability measure. Together, the official liabilities and current retirees’ accrued Social Security and Medicare benefits total $48.9 trillion, or 238% of GDP.