Management's Discussion & Analysis

The Government's Financial Position and Condition

This Financial Report presents the government’s financial position at the end of the fiscal year, explains how and why the financial position changed during the year, and discusses the government’s financial condition and how it may change in the future.

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Table 1 on the previous page and the following summarize the federal government’s financial position:

• This Financial Report includes discussion and analysis of the significant impact that the federal government’s response to the COVID-19 pandemic had on the government’s financial position during FY 2020.
• During FY 2020, the budget deficit increased by $2.1 trillion (218.2 percent) to $3.1 trillion and net operating cost increased by $2.4 trillion (164.7 percent) to $3.8 trillion.
• The government’s gross costs of $7.2 trillion, less $461.6 billion in revenues earned for goods and services provided to the public (e.g., Medicare premiums, national park entry fees, and postal service fees), plus $679.5 billion in net losses from changes in assumptions (e.g., interest rates, inflation, disability claims rates) yields the government’s net cost of $7.4 trillion, an increase of $2.3 trillion or 46.3 percent over FY 2019.
• Deducting $3.6 trillion in tax and other revenues, with some adjustment for unmatched transactions and balances, results in a “bottom line” net operating cost of $3.8 trillion for FY 2020, an increase of $2.4 trillion or 164.7 percent over FY 2019.
• Comparing total 2020 government assets of $6.0 trillion to total liabilities of $32.7 trillion (comprised mostly of $21.1 trillion in federal debt and interest payable³, and $9.4 trillion of federal employee and veteran benefits payable) yields a negative net position of $26.8 trillion.
• The budget deficit is primarily financed through borrowing from the public. As of September 30, 2020, debt held by the public, excluding accrued interest, was $21.0 trillion. This amount, plus intra-governmental debt ($6.0 trillion) equals gross federal debt, which, with some adjustments, is subject to the statutory debt limit. As of September 30, 2020, the government’s total debt subject to the debt limit was $26.9 trillion. The statutory debt limit was most recently suspended through July 31, 2021

This Financial Report also contains information about projected impacts on the government’s future financial condition. Under federal accounting rules, social insurance amounts as reported in both the SLTFP and in the SOSI are not considered liabilities of the government. From Table 1:

• The SLTFP shows that the PV⁴ of total non-interest spending, including Social Security, Medicare, Medicaid, defense, and education, etc., over the next 75 years, under current policy, is projected to exceed the PV of total receipts by $79.5 trillion (total federal non-interest net expenditures from Table 1).
• The SOSI shows that the PV of the government’s expenditures for Social Security and Medicare Parts A, B and D, and other social insurance programs over 75 years is projected to exceed social insurance revenues⁵ by about $65.5 trillion, a $6.4 trillion increase over 2019 social insurance projections.
• The two sustainability measures in Table 1 differ primarily because total non-interest net expenditures from the SLTFP include the effects of general revenues and non-social insurance spending, neither of which is included in the SOSI.

The government’s current financial position and long-term financial condition can be evaluated both in dollar terms and in relation to the economy as a whole. GDP is a measure of the size of the nation’s economy in terms of the total value of all final goods and services that are produced in a year. Considering financial results relative to GDP is a useful indicator of the economy’s capacity to sustain the government’s many programs. For example:

• The budget deficit (i.e., including the consolidated receipts and outlays from federal funds and the Social Security Trust Fund) increased from $984.4 billion in FY 2019 to $3.1 trillion in FY 2020. The deficit-to-GDP ratio in 2020 was 14.9 percent, an increase from 4.6 percent in FY 2019.
• The budget deficit is primarily financed through borrowing from the public. As of September 30, 2020, the $21.0 trillion in debt held by the public, excluding accrued interest, equates to approximately 100 percent of GDP.
• The 2020 SOSI projection of $65.5 trillion net PV excess of expenditures over receipts over 75 years represents about 4.2 percent of the PV of GDP over 75 years. The excess of total projected non-interest spending over receipts of $79.5 trillion from the SLTFP represents 4.8 percent of GDP over 75 years. As discussed in this Financial Report, changes in these projections can, in turn, have a significant impact on projected debt as a percent of GDP.
• To prevent the debt-to-GDP ratio from rising over the next 75 years, a combination of non-interest spending reductions and receipts increases that amounts to 5.4 percent of GDP on average is needed (3.8 percent of GDP on average in the 2019 projections). The fiscal gap represents 30.2 percent of 75-year PV receipts and 23.8 percent of 75-year PV non-interest spending.

FY 2020 Financial Statement Audit Results

For FY 2020, GAO issued a disclaimer of audit opinion on the accrual-based, government-wide financial statements, as it has for the past 23 years, due to certain material weaknesses in internal control over financial reporting and other limitations on the scope of its work. In addition, GAO issued a disclaimer of opinion on the sustainability financial statements due to significant uncertainties primarily related to the achievement of projected reductions in Medicare cost growth and certain other limitations. GAO’s audit report on page 226 of this Financial Report, discusses GAO’s findings.

Twenty-two of the 24 entities required to issue audited financial statements under the CFO Act received unmodified audit opinions, as did 13 of 16 additional significant consolidation entities (see Table 11 and Appendix A).⁶

The Government-wide Reporting Entity

This Financial Report includes the financial status and activities of the executive, legislative, and judicial branches of the federal government. SFFAS No. 47, Reporting Entity , provides criteria for identifying organizations that are consolidation entities, disclosure entities, and related parties. Such criteria are summarized in Note 1.A, Significant Accounting Policies, Reporting Entity, and in Appendix A, which lists the entities included in this Financial Report by these categories. The assets, liabilities, results of operations, and related activity for consolidation entities are consolidated in the financial statements.

Fannie Mae and Freddie Mac meet the criteria for disclosure entities and, consequently, are not consolidated into the government’s financial statements. However, the values of the investments in such entities, changes in value, and related activity with these entities are included in the consolidated financial statements. The FR System and the SPVs are disclosure entities and are not consolidated into the government’s financial statements. See Note 1.A and Note 26—Disclosure Entities and Related Parties for additional information. In addition, per SFFAS No. 31, Accounting for Fiduciary Activities, fiduciary funds are not consolidated in the government financial statements.⁷

Most significant consolidation entities prepare financial reports that include financial and performance related information, as well as Annual Performance Reports. More information may be obtained from entities’ websites indicated in Appendix A and at https://www.performance.gov/.

The following pages contain a more detailed discussion of the government’s financial results for FY 2020, the budget, the economy, the debt, and a long-term perspective about fiscal sustainability, including the government’s ability to meet its social insurance benefits obligations. The information in this Financial Report, when combined with the Budget, collectively presents information on the government’s financial position and condition.

The Federal Government’s Response to the Pandemic

During FY 2020, the federal government took broad action to protect public health from the effects of the unprecedented pandemic, signing into law four major pieces of legislation:

• Coronavirus Preparedness and Response Supplemental Appropriations Act of 2020 (P.L. 116-123)
• Families First Coronavirus Response Act (FFCRA, P.L. 116-127)
• Coronavirus Aid, Relief, and Economic Security (CARES Act, P.L. 116-136 )
• Paycheck Protection Program and Health Care Enhancement Act (PPPHCE Act, P.L. 116-139)

These laws address the health and economic effects of COVID-19, providing assistance to American workers and families, small businesses, and state, local, tribal governments, and preserving jobs for American industry. As indicated here and in the Financial Report, these essential programs had significant effects on the federal government’s budgetary and financial results.

Chart 1 summarizes the more than $2.6 trillion in appropriations enacted for key pandemic-related assistance programs, which include, but are not limited to:

• The PPP, administered by SBA, is a loan guaranty program designed to provide a direct incentive for small businesses to retain employees by providing loan forgiveness for amounts used for eligible expenses for payroll and benefit costs, interest on mortgages, rent, and utilities. ($670.3 billion)
• Through its Economic Stabilization and Assistance to Severely Distressed Sectors of the U.S. Economy efforts (CARES Act Title IV), Treasury, including in collaboration with the Federal Reserve, provides funding through direct loans and loan guarantees or other support for various businesses and state and local governments. ($500.0 billion)
• Through its UI Program, DOL expands states’ ability to provide UI for many workers impacted by the pandemic, including for workers who are not eligible for regular/traditional unemployment benefits. ($394.3 billion)
• The IRS provided a refundable tax credit, the recovery rebate, of $1,200 per qualifying adult, and $500 per dependent child, and a deferral of payment of employer’s share of Social Security taxes through December 2020. ($282.0 billion)
• Through the PHSSEF, HHS provides broad support, including, but not limited to: reimbursements to health care providers for expenses or lost revenues attributable to the pandemic, and support for the development and purchase of vaccines, therapeutic treatment, testing, and medical supplies. ($231.7 billion)
• Through Coronavirus Relief Fund efforts, Treasury provides for payments to states, local, and tribal governments for pandemic-related spending. ($150.0 billion)
• Many other agencies and programs comprise the remaining $405.3 billion reported as “Other” in Chart 1, including, but not limited to funding for: transportation system assistance at the DOT, student loan deferrals provided by Education, and FEMA’s Disaster Relief Fund.
• Note 29—Subsequent Events, discusses the financial effects of significant events that occurred following the end of the fiscal year, but prior to issuance of this Financial Report. Those subsequent events include additional appropriations as well as subsequent recessions (i.e., reductions) to appropriated amounts referenced above.⁸ Additional subsequent events are referenced throughout the Financial Report as appropriate.

Three key components of the U.S. budget process are: 1) appropriations, 2) obligations, and 3) outlays. An appropriation is a provision of law authorizing the expenditure of funds for a given purpose. Once funds are appropriated by Congress, Treasury issues warrants that officially establish the amounts available to be obligated and spent (i.e., expended or outlayed) by each agency. An agency’s obligation of funds is a binding agreement to outlay funds for a particular purpose immediately or in the future. Table 2 below compares the obligated and outlaid amounts to the appropriation amounts for each program summarized in Chart 1. Obligations and outlays provide an indication of how much appropriations have been used. Outlays for SBA’s PPP and Treasury’s Economic Stabilization & Assistance to Distressed Sectors programs detailed in Table 2 represent the subsidy cost reflected in the budget deficit for such programs. The PPP budget outlays primarily represent estimated subsidy cost for which cash payments have not yet been made to the lenders, resulting in a liability on the balance sheet as of September 30, 2020. Concerning Treasury’s Economic Stabilization & Assistance to Distressed Sectors Program, the outlays primarily relate to estimated losses on Investments in Special Purpose Vehicles reported on the balance sheet.

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Chart 1 and Table 2 above reflect only amounts appropriated, obligated, and outlaid as of September 30, 2020. The Treasury website, www.USAspending.gov provides more current information about amounts spent by the federal government for COVID-19 response and for other purposes.

Budgetary activity, such as appropriations, obligations, and outlays are different from, but related to financial activity, such as costs, assets, and liabilities. The following section provides a brief discussion of the relationship between budgetary and financial accounting in the federal government. As agencies implement programs, the appropriations, obligations, and outlays referenced in Table 2 precipitate a wide range of financial effects, including the incurrence of program costs, and the creation of or changes in assets such as advances or loans receivable, or liabilities such as loan guarantees. Table 3 in the following section, which summarizes the Reconciliation of Net Operating Cost and Budget Deficit statement, presents the significant differences between the two accounting perspectives utilized by the federal government. The corresponding financial effects are discussed later in the MD&A in the section entitled “The Government’s Net Position: ‘Where We Are’".

Accounting Differences Between the Budget and the Financial Report

Each year, the Administration issues two reports that detail the government’s financial results: the Budget and this Financial Report. The exhibit on the following page provides the key characteristics and differences between the two documents.

Treasury generally prepares the financial statements in this Financial Report on an accrual basis of accounting as prescribed by GAAP for federal entities.⁹ These principles are tailored to the government’s unique characteristics and circumstances. For example, entities prepare a uniquely structured “Statement of Net Cost,” which is intended to present net government resources used in its operations. Also, unique to government is the preparation of separate statements to reconcile differences and articulate the relationship between the budget and financial accounting results.

Budget Deficit vs. Net Operating Cost

The budget deficit is measured as the excess of outlays, or payments made by the government, over receipts, or cash received by the government. Net operating cost, on an accrual basis, is the excess of costs (what the government has incurred but has not necessarily paid) over revenues (what the government has collected and expects to collect but has not necessarily received). As shown in Chart 2, net operating cost typically exceeds the budget deficit due largely to the inclusion of cost accruals associated with increases in estimated liabilities for the government’s postemployment benefit programs for its military and civilian employees and veterans as well as environmental liabilities.

The government’s primarily cash-based¹⁰ budget deficit increased by $2.1 trillion (about 218.2 percent) from approximately $984.4 billion in FY 2019 to about $3.1 trillion in FY 2020 due to a combined slight decrease in receipts and a significant increase in outlays in FY 2020. The $42.2 billion (1.2 percent) decrease in receipts can be attributed primarily to lower net individual and corporation income tax receipts and excise taxes, partially offset by higher social insurance and retirement receipts and deposits of earnings by the Federal Reserve. Outlays increased $2.1 trillion (47.3 percent). Contributing to the dollar increase over FY 2019 were higher outlays for Medicare, Defense, Medicaid, Social Security, Treasury and SBA.¹¹

The Treasury’s September 2020 MTS is the source of receipts, spending, and deficit information for this Report. The MTS presents primarily cash-based spending, or outlays, for the fiscal year in a number of ways, including by month, by entity, and by budget function classification. The federal budget is divided into approximately 20 categories, or budget functions, as a means of organizing federal spending by primary purpose (e.g., National Defense, Transportation, and Health). Multiple entities may contribute to one or more budget functions, and a single budget function may be associated with only one entity. For example, DOD, DHS, DOE, and multiple other entities administer programs that are critical to the broader functional classification of National Defense. DOD, OPM, and many other entities also administer Income Security programs (e.g., retirement benefits, housing, financial assistance). By comparison, the Medicare program is a budget function category unto itself and is administered exclusively at the federal level by HHS. Federal spending information by budget function and other categorizations may be found in the September 2020 MTS.¹²

The government’s largely accrual-based net operating cost increased by $2.4 trillion (164.7 percent) to $3.8 trillion during FY 2020. As explained below, net operating costs are affected by both changes in revenues and costs.

Table 3 provides a summary of the items reported in the Reconciliation of Net Operating Cost and Budget Deficit, which articulates the relationship between the government’s accrual-based net operating cost and the primarily cash-based budget deficit. From Table 3, the $696.9 billion net difference between the government’s budget deficit and net operating cost for FY 2020, is mostly attributable to: 1) a $969.0 billion net increase in liabilities for federal employee and veteran benefits payable; 2) a $91.1 billion increase in net taxes receivable; 3) a $44.9 billion timing difference between when credit reform costs are recorded in the budget versus net operating cost; and 4) a $150.7 billion net change in Other Assets, attributed mostly to advances and prepayments for certain COVID-19 related programs (see Note 10—Other Assets).

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Assets and Liabilities

The government’s net position at the end of the fiscal year is derived by netting the government’s assets against its liabilities, as presented in the Balance Sheet (summarized in Table 5). The Balance Sheet does not include the financial value of the government’s sovereign powers to tax, regulate commerce, or set monetary policy or value of nonoperational resources of the government, such as national and natural resources, for which the government is a steward. In addition, as is the case with the Statement of Operations and Changes in Net Position, the Balance Sheet includes a separate presentation of the portion of net position related to funds from dedicated collections. Moreover, the government’s exposures are broader than the liabilities presented on the Balance Sheet. The government’s future social insurance exposures (e.g., Medicare and Social Security) as well as other fiscal projections, commitments and contingencies, are reported in separate statements and disclosures. This information is discussed later in this MD&A section, the financial statements, and RSI sections of this Financial Report.

The federal debt held by the public measured as a percent of GDP (debt-to-GDP ratio) (Chart 8) compares the country’s debt to the size of its economy, making this measure sensitive to changes in both. Over time, the debt-to-GDP ratio has varied widely:

• For most of the nation’s history, through the first half of the 20th century, the debt-to-GDP ratio has tended to increase during wartime and decline during peacetime.
• Chart 8 shows that wartime spending and borrowing pushed the debt-to-GDP ratio to an all-time high of 106 percent in 1946, soon after the end of World War II, but it decreased rapidly in the post-war years.
• The ratio grew rapidly from the mid-1970s until the early 1990s. Strong economic growth and fundamental fiscal decisions, including measures to reduce the federal deficit and implementation of binding PAYGO rules (which require that new tax or spending laws not add to the deficit), generated a significant decline in the debt-to-GDP ratio, from a peak of 48 percent in 1993-1995, to 31 percent in 2001.
• During the first decade of the 21st century, PAYGO rules were allowed to lapse, significant tax cuts were implemented, entitlements were expanded, and spending related to defense and homeland security increased. By September 2008, the debt-to-GDP ratio was 39 percent of GDP.
• PAYGO rules were reinstated in 2010, but the extraordinary demands of the last economic and fiscal crisis and the consequent actions taken by the federal government, combined with slower economic growth in the wake of the crisis, pushed the debt-to-GDP ratio up to 74 percent by the end of FY 2014.
• The debt was 100 percent of GDP at the end of FY 2020 (compared to 79 percent at the end of FY 2019 and as reported in the FY 2019 Financial Report).¹⁷ From Chart 8, since 1940, the average debt-to-GDP ratio is 48 percent.

The Economy in FY 2020

A review of U.S. economic performance can help place the discussion of the government’s financial statements in a broader context. Yet, in the latest fiscal year, further consideration of the effects of an external shock, the COVID-19 global pandemic, and the U.S. government’s response, is also warranted.

The economy ended FY 2019 on a firm footing, with the unemployment rate at a half-century low, strong wage growth, and a pace of job creation more than sufficient to account for new entrants to the labor force. Through the first five months of FY 2020, the pace of payroll job growth accelerated to 219,000 per month, and the unemployment stood at 3.5 percent, the half-century low seen at the end of FY 2019. In addition, the labor force participation rate climbed to a six-year high in February 2020, and housing sector activity became increasingly buoyant. By February 2020, business and consumer sentiment had advanced to multi-year highs as well.

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However, the spread of the COVID-19 virus ended the longest recovery in U.S. history in February 2020 at 128 months. The economy contracted sharply in the second and third quarters of FY 2020 as state and local governments implemented stay-at-home orders and mandated closures of non-essential businesses to mitigate the impact of the pandemic on health care resources. Meanwhile, the U.S. government responded quickly with unprecedentedly bold measures to support American households and small businesses during the pandemic. By March 27, 2020 – or roughly two weeks after stay-at-home orders were issued, three record-setting economic aid packages were passed totaling roughly $2.6 trillion. The administration rapidly implemented the various measures, including EIPs, expanded eligibility for UI payments, and the PPP, which provided forgivable loans to small businesses to encourage employee retention. These measures boosted household liquidity, contributed to a rapid reduction in unemployment, and allowed small businesses to maintain viability until their local economies reopened. Due to the relaxation of stay-at-home orders and this robust response, the economy expanded in the final quarter of FY 2020 at the fastest quarterly rate in seventy years, accompanied by a brisk pace of payroll job growth and strong growth in wages.

As summarized in Table 6, U.S. economic growth slowed markedly over FY 2020 as a whole compared with FY 2019. Real (i.e., inflation-adjusted) GDP declined by 2.8 percent over the four quarters of FY 2020, following growth of 2.1 percent during the previous fiscal year. A temporary collapse in personal consumption expenditures lead the overall contraction in the latest fiscal year, and business fixed investment also declined sharply. However, residential investment, government spending, net exports, and private inventory investment all supported growth. Over the four quarters of FY 2020, consumer spending contracted by 2.8 percent after growing by 2.5 percent the previous fiscal year. Early in the latest fiscal year, business fixed investment had been constrained by ongoing headwinds, including slowing global growth, policy uncertainty, low oil prices, and disruptions at specific domestic companies. The onset of the pandemic also put investment plans on hold, such that business fixed investment declined 4.5 percent in FY 2020, after growing 2.7 percent in FY 2019. Residential investment, despite a temporary setback in mid-2020, led growth in the latest fiscal year, with a gain of 7.2 percent following a 1.2 percent contraction in FY 2019. A smaller increase in government spending in the latest fiscal year (a 0.3 percent rise for FY 2020 as a whole, following a 2.2 percent advance in FY 2019), masked the significant increase in federal government expenditures in April 2020 to support the economy. Net exports made an essentially neutral contribution to growth while inventory investment contributed positively to real GDP growth in FY 2020; in the previous fiscal year, each of these components had posed a small drag on growth.

Although labor market strength was evident in the first five months of FY 2020, the imposition of stay-at-home orders and mandated business closures reduced economic activity severely, and the unemployment rate jumped to a post-World War II high of 14.8 percent in April 2020. More than 22 million payroll jobs were lost over March and April, but in May, job creation resumed, far earlier than expected. By the end of FY 2020, the unemployment rate had fallen by 6.8 percentage points to 7.8 percent, and a total of 11.5 million jobs had been recovered.

Continuing the trend seen over FY 2019, headline inflation slowed, during FY 2020, reflecting lower oil prices, but also weaker aggregate demand. Core inflation (excludes food and energy), which had accelerated modestly during FY 2019, also slowed in the latest fiscal year. The CPI rose 1.4 percent over the twelve months of FY 2020, decelerating from the 1.7 percent pace during the previous fiscal year. Core inflation was 1.7 percent over the FY ending September 2020, decelerating from the 2.4 percent pace during FY 2019.

Relatively low inflation and stronger nominal DPI growth helped to boost purchasing power in real terms in FY 2020. Real DPI grew 5.7 percent over the twelve months of FY 2020, after growing by 2.0 percent during the previous fiscal year. Nominal average hourly earnings grew at a consistently strong pace during the first half of FY 2020, and grew faster during the second half, reflecting the temporary unemployment of lower-wage workers. Slower inflation helped boost wages in real terms. Real average hourly earnings increased 3.0 percent during FY 2020, after rising 2.3 percent during the previous fiscal year. Growth of non-farm labor productivity also accelerated over the four quarters of FY 2020, rising by 4.0 percent after growing 1.7 percent during FY 2019.

Footnotes

³ On the government’s Balance Sheet, federal debt and interest payable consists of Treasury securities, net of unamortized discounts and premiums, and accrued interest payable. The “public” consists of individuals, corporations, state and local governments, FRB, foreign governments, and other entities outside the federal government. Back to Content)

⁴ PVs recognize that a dollar paid or collected in the future is worth less than a dollar today because a dollar today could be invested and earn interest. To calculate a PV, future amounts are thus reduced using an assumed interest rate, and those reduced amounts are summed. (Back to Content)

⁵ Social Security is funded by the payroll taxes and revenue from taxation of benefits. Medicare Part A is funded by the payroll taxes, revenue from taxation of benefits, and premiums that support those programs. Medicare Parts B and D are primarily financed by transfers from the General Fund, which are presented, and by accounting convention, eliminated in the SOSI. For the FYs 2020 and 2019 SOSI, the amounts eliminated totaled $40.9 trillion and $36.8 trillion, respectively. (Back to Content)

⁶The 22 entities include the HHS, which received disclaimers of opinions on its 2020, 2019, 2018, 2017, and 2016 SOSI and its 2020 and 2019 SCSIA. The 13 entities include the FDIC, the NCUA, and the FCSIC, which operate on a calendar year basis (December 31 year-end). Statistic reflects 2019 audit results for these organizations if 2020 results are not available. (Back to Content)

⁷ See Note 22—Fiduciary Activities.(Back to Content)

⁸ On December 27, 2020, the President signed into law the Consolidated Appropriations Act, 2021 (P.L. 116-120). This act included provisions for an additional $900.0 billion in stimulus relief related to the pandemic. In addition, as of the date of enactment, this act rescinded $478.8 billion of the $500.0 billion appropriation provided to Treasury under Section 4027 of the CARES Act. Effective January 9, 2021, the statute eliminates Treasury’s ability to make new loans and investments under Section 4003 of the CARES Act. In addition, $146.5 billion that was appropriated to SBA under the SBA-Business Loans Program Account, CARES Act, was rescinded under the Consolidated Appropriations Act, 2021. In addition, on March 11, 2021, the President signed into law the American Rescue Plan Act, 2021, a $1.9 trillion economic relief package to address the continued impact of COVID-19 on the economy. See Note 29—Subsequent Events and Treasury’s financial statements for more information. (Back to Content)

⁹ Under GAAP, most U.S. government revenues are recognized on a ‘modified cash’ basis, (see Financial Statement Note 1.B). The Statement of Social Insurance presents the PV of the estimated future revenues and expenditures for scheduled benefits over the next 75 years for the Social Security, Medicare, RRP; and 25 years for the Black Lung program. The Statement of Long-Term Fiscal Projections presents the 75-year PV of the projected future receipts and non-interest spending for the federal government. (Back to Content)

¹⁰ Interest outlays on Treasury debt held by the public are recorded in the budget when interest accrues, not when the interest payment is made. For federal credit programs, outlays are recorded when loans are disbursed, in an amount representing the PV cost to the government, commonly referred to as credit subsidy cost. Credit subsidy cost excludes administrative costs. (Back to Content)

¹¹ 10/16/20 press release -- Joint Statement of Treasury Secretary Steven T. Mnuchin and OMB Director Russell Vought on Budget Results for FY 2020. (Back to Content)

¹² Final MTS for FY 2020 through September 30, 2020 and Other Periods.. (Back to Content)

¹³ As shown in Table 4, net operating cost includes an adjustment for unmatched transactions and balances, which represent unreconciled differences in intra-governmental activity and balances between federal entities. These amounts are described in greater detail in the Other Information section of this Financial Report. (Back to Content)

¹⁴ FY 2020 Treasury's financial statements, p. 42. (Back to Content)

¹⁵ For financial reporting purposes, other than multi-use heritage assets, stewardship assets of the government are not recorded as part of PP&E. Stewardship assets are comprised of stewardship land and heritage assets. Stewardship land consists of public domain land (e.g., national parks, wildlife refuges). Heritage assets include national monuments and historical sites that among other characteristics are of historical, natural, cultural, educational, or artistic significance. See Note 25—Stewardship Land and Heritage Assets. (Back to Content)

¹⁶ During FYs 2019 and 2018, Treasury faced two delays in raising the statutory debt limit that required it to depart from its normal debt management procedures and to invoke legal authorities to avoid exceeding the statutory debt limit. During these periods, extraordinary actions taken by Treasury have resulted in federal debt securities not being issued to certain federal government accounts with the securities being restored including lost interest to the affected federal government accounts subsequent to the end of the delay period. The first delay occurred beginning on December 9, 2017 and ending on February 9, 2018, with the enactment of the BBA of 2018 (P.L. 115-123) which suspended the statutory debt limit through March 1, 2019. The second delay in raising the statutory debt limit occurred beginning on March 2, 2019 and ending on August 2, 2019, with the enactment of the BBA of 2019 (P.L. 116-37) which suspended the statutory debt limit through July 31, 2021. (Back to Content)

¹⁷ Joint Statement of Treasury Secretary Steven T. Mnuchin and OMB Director Russell Vought on Budget Results for FY 2020. (Back to Content)