Federal Unfunded Obligation Reach Record
June 8, 2011
The federal government's financial condition deteriorated rapidly last year, far beyond the $1.5 trillion in new debt taken on to finance the budget deficit, a USA Today analysis shows.
The government added $5.3 trillion in new financial obligations in 2010, largely for retirement programs such as Medicare and Social Security. That brings the total of financial promises not paid for to a record $61.6 trillion. This gap between spending commitments and revenue last year equals more than one-third of the nation's gross domestic product.
- Medicare alone took on $1.8 trillion in new liabilities, more than the record deficit, prompting heated debate between Congress and the White House over lifting the debt ceiling.
- Social Security added $1.4 trillion in obligations, partly reflecting longer life expectancies.
- The $61.6 trillion in unfunded obligations amounts to $534,000 per household.
- That's more than five times what Americans have borrowed for everything else -- mortgages, car loans and other debt.
The government has also promised pension and health benefits worth more than $700,000 per retired civil servant. The pension fund's key asset: federal IOUs.
USA Today calculated federal finances based on standard accounting rules since 2004 using data from the Medicare and Social Security annual reports and the little-known audited financial report of the federal government.
Source: Dennis Cauchon, "U.S. Funding for Future Promises Lags by Trillions," USA Today, June 7, 2011.
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