Executive Summary to the Fiscal Year 2024 Financial Report of U.S. Government

Costs and Revenues

The government’s “bottom line” net operating cost decreased $992.2 billion (29.0 percent) during FY 2024 to $2.4 trillion. It is calculated as follows:

• Starting with total gross costs of $7.8 trillion, the government subtracts earned program revenues (e.g., Medicare premiums, national park entry fees, and postal service fees) and adjusts for gains or losses from changes in actuarial assumptions used to estimate future federal employee and veteran benefits payments to derive its net cost before taxes and other revenues of $7.4 trillion (see Chart 2), a decrease of $479.9 billion (6.1 percent) from FY 2023. This net decrease is the combined effect of many offsetting increases and decreases across the government. For example:
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• Entities administering federal employee and veteran benefits programs, including the VA, DOD, and OPM employ a complex series of assumptions to make actuarial projections of their long-term benefits liabilities. These assumptions include but are not limited to interest rates, beneficiary eligibility, life expectancy, and medical cost levels. Changes in these assumptions can result in either losses (net cost increases) or gains (net cost decreases). Across the government, these net losses from changes in assumptions amounted to $283.6 billion in FY 2024, a loss decrease (and a corresponding net cost decrease) of $477.0 billion compared to FY 2023. For example:
• In particular, VA net costs decreased $983.3 billion due largely to a combined cost decrease of $596.5 billion related to changes in assumptions as referenced above. VA net costs also decreased because the actuarial present value cost of the Sergeant First Class Heath Robinson Honoring our Promise to Address Comprehensive Toxins (PACT) Act, which expanded and extended eligibility for veterans' benefits, was recognized as an expense for 2023 and there was no similar expense in 2024.
• DOD net costs increased $229.0 billion due primarily to a $147.4 billion loss increase from changes in assumptions as referenced above. However, most of DOD’s net costs included those related to military operations, readiness and support, procurement, personnel, and R&D.
• An $81.4 billion decrease in Treasury net costs was largely due to a decrease in costs associated with Treasury’s pandemic relief programs, and a $48.7 billion increase in earned revenue associated with the GSE (Fannie Mae and Freddie Mac) investments.
• Education net costs increased $173.2 billion due largely to a significant increase in subsidy expenses for Education’s student loan programs, because of the reduction in FY 2023 subsidy expense resulting from the reversal of the proposed student loan debt relief as a result of the Supreme Court’s ruling in Biden v Nebraska. 
• A $24.1 billion net cost increase at HHS primarily due to a $21.4 billion increase across the Medicare and Medicaid benefits programs largely associated with increasing benefits payments.
• SSA net costs increased $97.4 billion due largely to a 2.9 percent increase in the number of OASI beneficiaries, combined with a 3.2 percent COLA provided to beneficiaries in 2024.
• Interest costs related to federal debt securities held by the public provided the largest increase of $231.1 billion due largely to an increase in the outstanding debt held by the public and an increase in the average interest rates.  

• The government deducts tax and other revenues from net cost (with some adjustments) to derive its FY 2024 “bottom line” net operating cost of $2.4 trillion.
• From Chart 3, total government tax and other revenues increased by $512.3 billion (11.5 percent) to about $5.0 trillion for FY 2024 due primarily to an overall growth in income tax collections, primarily from individuals and corporations.
• Together, individual income tax and tax withholdings, and corporate income taxes accounted for about 92.8 percent of total tax and other revenues in FY 2024. Other revenues include Federal Reserve earnings, excise taxes, and customs duties.

Assets and Liabilities

Chart 4 summarizes the assets and liabilities that the government reports on its Balance Sheet. As of September 30, 2024:

• 82.8 percent of the federal government’s total assets ($5.7 trillion) consist of: 1) $1.2 trillion in cash and monetary assets; 2) $447.3 billion in inventory and related property; 3) $1.8 trillion in loans receivable, net (primarily student loans); and 4) $1.3 trillion in net PP&E.
  
  • Cash and monetary assets ($1.2 trillion) is comprised largely of the operating cash of the U.S. government. Operating cash held by Treasury increased $231.9 billion (36.3 percent) to $870.8 billion during FY 2024.
    
    
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  • Inventory and Related Property ($447.3 billion) includes: 1) inventory, which is tangible personal property that is either held for sale, in the process of production for sale, or to be consumed in the production of goods for sale or in the provision of services for a fee; 2) OM&S, or tangible personal property to be consumed in normal operations (e.g., spare and repair parts, ammunition, and tactical missiles); and 3) stockpiles, or strategic and critical materials held due to statutory requirements for use in national defense, conservation, or local/national emergencies.
  • Loans receivable net, ($1.8 trillion) is comprised of loans provided by multiple agencies, including Education and SBA, to promote the nation’s welfare by making financing available to segments of the population not served adequately by non-federal institutions or otherwise providing for certain activities or investments. Loans Receivable also includes Treasury’s $94.5 billion in notes issued by trusts created by FDIC in its receivership capacity and backed by a guarantee from the FDIC in its corporate capacity.
  • Federal government PP&E includes many of the physical resources that are vital to the federal government’s ongoing operations, including buildings, structures, facilities, equipment, internal use software, and general-purpose land. DOD comprises approximately 64.7 percent of the government’s reported PP&E of $1.3 trillion as of September 30, 2024.
  • Other significant government resources not reported on the Balance Sheet include the government’s power to tax and set monetary policy, natural resources, and stewardship assets. Stewardship assets, including heritage assets and stewardship land, benefit the nation (e.g., national monuments, national parks) and are intended to be held indefinitely.
• Total liabilities ($45.5 trillion) consist mostly of: 1) $28.3 trillion in federal debt and interest payable; $15.0 trillion in federal employee and veteran benefits payable.
• Federal debt held by the public is debt held outside of the government by individuals, corporations, state and local governments, the Federal Reserve (FR) System, foreign governments, and other non-federal entities.
• The government borrows from the public (increases federal debt levels) to finance deficits. During FY 2024, federal debt held by the public increased $2.0 trillion (7.6 percent) to $28.3 trillion.
• The government also reports about $7.1 trillion of intra-governmental debt outstanding, which arises when one part of the government borrows from another. For example, government funds (e.g., Social Security and Medicare Trust Funds) typically must invest excess receipts, including interest earnings, in Treasury-issued federal debt securities. Although not reflected in Chart 4, these securities are included in the calculation of federal debt subject to the debt limit.
• Federal debt held by the public plus intra-governmental debt equals gross federal debt, which with some adjustments, is subject to a statutory debt ceiling ("debt limit"). In FY 2023, a delay in raising the statutory debt limit occurred that required Treasury to depart from its normal debt management procedures and invoke legal authorities to avoid exceeding the statutory debt limit. During this period, extraordinary measures taken by Treasury resulted in federal debt securities not being issued to certain federal government accounts with the securities being restored, including lost interest, to the affected government accounts subsequent to the end of the delay period. Due to the delay in raising the statutory debt limit, Treasury took extraordinary measures from January 19, 2023, through June 2, 2023. On June 3, 2023, P.L. 118-5 was enacted suspending the debt limit through January 1, 2025. At the end of FY 2024, debt subject to the statutory limit was $35.4 trillion. Increasing or suspending the debt limit does not increase spending or authorize new spending; rather, it permits the government to continue to honor pre-existing commitments (see Note 12—Federal Debt and Interest Payable).
• Federal employee and veteran benefits payable ($15.0 trillion) represents the amounts of benefits payable by agencies that administer the government’s pension and other benefit plans for its military and civilian employees.

See Note 29—Subsequent Events, for information about events that occurred after the end of the fiscal year that may affect the government’s financial position and condition.

Key Economic Trends

An analysis of U.S. economic performance provides useful background when evaluating the government’s financial statements. Over the course of FY 2024, the economy maintained a solid, if somewhat slower, pace of growth. Labor markets further rebalanced toward pre-pandemic norms, and inflation continued to ease, nearing the Federal Reserve’s 2-percent target. These and other economic and financial developments are discussed in greater detail in the Financial Report.