Federal Liabilities: 2016 Update
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Date
2016-08-01
Journal Title
Journal ISSN
Volume Title
Publisher
Private Enterprise Research Center, Texas A&M University
Abstract
The 2015 Financial Report of the United States Government (FRUSG) identifies total federal liabilities of $21.5 trillion as of September 30, 2015. The debt held by the public, $13.2 trillion, comprises 61% of these liabilities. Federal employees' accrued benefits make up another 31%, and various other categories round out the remainder. Absent from the official liabilities is a measure of current retirees' expected Social Security and Medicare benefits even though these elderly entitlement benefits are conceptually equivalent to federal employees' accrued benefits. The Social Security and Medicare benefits payable to retirees do appear in the FRSUG's Statements of Social Insurance, but not as liabilities. 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. Social Security and Medicare benefits payable to current retirees produces an additional liability of $18.5 trillion, an amount that exceeds the debt held by the public and that is 86% of the size of the official liability measure. Together the official liabilities and the Social Security and Medicare benefits to be received by current retirees total $39.9 trillion, or 222% of GDP. The liability measure presented here, based on past actions, combined with the forward-looking fiscal gap and unfunded obligation measures provide policymakers with a comprehensive set of metrics that allows them to distinguish between federal government commitments that have already been made and those that are contingent on continuing programs in their current forms
Description
Education
Keywords
Federal Liabilities, Education