GAO Warns of ‘Unsustainable Fiscal Path’ as U.S. Debt Nears Postwar Highs; Social Security and Medicare Funding at Risk

The Government Accountability Office warned Thursday that the United States is on an “unsustainable fiscal path,” with debt held by the public projected to match its post-World War II record of 106% of gross domestic product by 2029 and then keep climbing to 251% by 2056 if current tax and spending policies remain in place.

In its annual fiscal-health report, released June 11, the nonpartisan congressional watchdog said the government’s debt burden is already near historic levels. At the end of fiscal 2025, debt held by the public stood at $30.2 trillion, or 99% of GDP. By April 2026, GAO said, it had risen to $31.3 trillion, roughly equal to the size of the economy. The report also underscored how borrowing costs are reshaping the budget: net interest spending in fiscal 2025 exceeded federal spending on national defense.

GAO said the widening gap is being driven mainly by growth in spending on Social Security, Medicare and other federal health care programs, along with rising interest costs. The government has spent more than it collected in revenue in nearly every year this century, financing those deficits through borrowing. Under current policy, GAO said, net interest is on track to be the fastest-growing part of the federal budget.

The report tied that long-term warning to nearer-term financing deadlines for major benefit programs. The Social Security Old-Age and Survivors Insurance trust fund is projected to be depleted in the fourth quarter of 2032, and the Medicare Hospital Insurance trust fund, which pays for Part A benefits, is projected to be depleted in the second quarter of 2033. That does not mean benefits would stop entirely: GAO said incoming Social Security revenues would cover about 78% of scheduled benefits starting in 2032, while Medicare Part A revenues would cover about 89% of scheduled costs starting in 2033. As the Social Security trustees put it, “The OASI Trust Fund reserves are projected to become depleted in the fourth quarter of 2032.” The Medicare trustees similarly said, “The HI trust fund is projected to become depleted in the second quarter of 2033.”

GAO, the audit and evaluation arm of Congress, publishes the fiscal-health report each year to assess the federal government’s condition under current policy. This year’s report, titled “The Nation’s Fiscal Health: Urgent and Sustained Action Needed to Improve the Fiscal Outlook,” is based on GAO’s fiscal simulation using information available as of February 2026. The agency said its projections reflect a current-policy simulation rather than a strict current-law baseline.

That distinction helps explain why readers may see somewhat different debt figures elsewhere. GAO said its outlook deteriorates faster than the Congressional Budget Office’s February 2026 projections, in part because it uses different assumptions, including that statutory sequestration will not be implemented and that Social Security and Medicare continue paying scheduled benefits regardless of trust-fund status. CBO projected debt held by the public at about 120% of GDP by 2036; GAO put that figure at 123%.

GAO said the scale of the challenge requires a coordinated fiscal strategy, including broad agreement on reducing annual deficits, steps to address Social Security and Medicare financing before their trust funds are depleted, and fiscal rules to promote budget discipline as an alternative to repeated fights over the debt limit.

Its central warning was blunt: “The federal government is on an unsustainable fiscal path.” The longer lawmakers wait to act, the report said, the larger the changes will likely need to be.