Federal Liabilities: 2023 Update

Abstract

The 2022 Financial Report of the United States Government identifies total federal liabilities of $39 trillion as of September 30, 2022. While the federal debt, interest payments and federal employees’ accrued benefits make up the bulk of total federal liabilities, current retirees’ expected Social Security and Medicare are conspicuously absent. In PERC Policy Study 2301, Dennis Jansen and Andrew Rettenmaier argue for adding these portions of the elderly entitlement programs’ obligations – net benefits payable to current retirees – to the official liabilities of the federal government. Social Security and Medicare benefits payable to current retirees produce additional liabilities of $32.2 trillion, an amount that exceeds the debt held by the public and that is 83% of the size of the official liability measure. The liability measure presented here – based on past actions combined with the forward-looking fiscal gap and unfunded obligation measures - provide policymakers with the ability to distinguish between federal government commitments that have already been made and those that are contingent on continuing programs in their current forms.