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The Nation by the Numbers The 2010 Financial Report of the U.S. Government

The Nation by the Numbers The 2010 Financial Report of the U.S. Government. AGA – Richmond May 18, 2011. Scott Bell Senior Staff Accountant Department of the Treasury. Citizen’s Guide. Key Issues Current Financial Position and Condition Economic Recovery Efforts

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The Nation by the Numbers The 2010 Financial Report of the U.S. Government

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  1. The Nation by the NumbersThe 2010 Financial Report of the U.S. Government AGA – Richmond May 18, 2011 Scott Bell Senior Staff Accountant Department of the Treasury

  2. Citizen’s Guide Key Issues • Current Financial Position and Condition • Economic Recovery Efforts • Social Insurance & Sustainability

  3. FY 2010 Audit in Review • Governmentwide Audit – Disclaimer (14th consecutive year) • DoD accounting weaknesses • Intragovernmental Balances and Transactions • Consolidation Process • SOSI Disclaimer: • Had been unqualified in 2007, 2008, 2009 • “…significant uncertainties, primarily related to the achievement of projected reductions in Medicare cost growth reflected in the 2010 Statement of Social Insurance, prevented us from expressing an opinion on that statement.” • 28 of 35 significant reporting agencies received clean audit opinions. • The total number of CFO Act material weaknessesdecreasedfrom 38 to 31. • 15 agencies earned a clean audit opinion with no material weaknesses (including the Departments of Commerce, Education, Energy, HUD, Interior, Justice, State, and Transportation).

  4. Deficit Decrease, Cost Increase

  5. Net Operating Cost vs Budget Deficit 2010 Budget Deficit $1,294.1billion + $223.8b Increase in estimated veterans benefits liabilities $279.3b Increase in estimated military and civilian Benefits $268.0b Increase in liabilities for Government-Sponsored Enterprises + + + $86.4b TARP Downward Reestimate - $71.3b Other 2010 Net Operating Cost $2,080.3 billion =

  6. What Came In • Total revenues remained at about $2.2 trillion. • Corporate tax revenue increased 40 percent, after decreasing by more than 50 percent during FY 2009. • Slight decrease (2.4 percent or $42.1 billion) in personal income tax revenue.

  7. What Went Out • Government’s Net Cost (Gross Cost less earned revenues) increased $861.3 billion to $4.3 trillion. • Increase in Federal employee and veterans benefit liabilities = $538 billion (62 %) of total change. • SFFAS 33 – agencies required to report gains/losses from assumptions changes separately (total $132.9 billion in 2010). • ‘Bottom Line’ net operating cost (Net Cost less Taxes & Other Revenues) = $2.1 trillion.

  8. What We Own & What We Owe

  9. Economic Recovery HERA EESA • $387.7 billion disbursed. • $204.1 billion repaid. • $27.8 billion generated (interest/dividends). • Reduced GM Ownership, AIG Restructuring. • Fannie & Freddie • Funding advances when liabilities > assets. • $85.1 billion to Fannie • $63.1 billion to Freddie • $359.9 billion combined liability accrued • Mortgage-Backed Securities (MBS) • 9/30/2010: $225.5 billion. • $75 billion in principal and interest repaid. • Program expired on 12/31/2009

  10. Fiscal Sustainability: An Issue Now & in the Future • Under current conditions, actuaries estimate that there will be a social insurance shortfall of $31 trillion. • 75-year estimate of future benefit expenditures net of contributions. • Decline from 2009 ($46t) due to ACA.

  11. Fiscal Sustainability:Interest – A compounding problem

  12. Fiscal Sustainability:Effect on the Debt

  13. Statement of Social Insurance (SOSI) • Disclaimer - “…significant uncertainties…primarily related to the achievement of projected reductions in Medicare cost growth…prevented us from expressing an opinion on that statement.” • Projections based on full implementation of Affordable Care Act (ACA), including significant projected Medicare cost decreases related to: • (1) reductions in physician payment rates totaling 30 percent over the next 3 years • (2) productivity improvements for most other categories of Medicare providers.

  14. On the Web http://www.fms.treas.gov/fr • Has long been available online in ‘static’ form. • New interactive version of the Financial Report and the Guide • Easily / quickly navigate throughout the document • View source data behind charts • Access other related online information • Agency reports • Accounting standards • Budget

  15. Find Out More! http://www.fms.treas.gov/fr/index.html http://www.whitehouse.gov/omb/financial/index.html www.gao.gov www.financialstability.gov mark.reger@treasury.gov

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