US Treasury Shows £36.72 Trillion in Liabilities Against £4.66 Trillion in Assets — Who Pays as Debt Outpaces Everything Else?

The United States government has quietly disclosed that its liabilities now outpace its assets by nearly eight to one, and almost nobody noticed.

The report drew near-total media silence despite confirming that the government's net position has deteriorated by a further £1.59 trillion ($2.07 trillion) in a single year, pushing the consolidated balance to a negative £32.04 trillion ($41.72 trillion).

The figures, drawn directly from official Treasury statements, lay out with uncommon candour a fiscal trajectory that the Government Accountability Office (GAO) describes as 'unsustainable.'

What the Treasury's Own Balance Sheet Shows

The FY 2025 Financial Report is a consolidated document that covers the executive, legislative, and judicial branches of the federal government. Its balance sheet reveals two dominant drivers of the widening gap.

Federal debt and interest payable rose by £1.54 trillion ($2 trillion) over the year, reaching £23.30 trillion ($30.33 trillion). Federal employee and veteran benefits payable grew by a further £337 billion ($438.8 billion) to £11.88 trillion ($15.47 trillion).

These on-balance-sheet figures are striking enough, but they do not capture the full picture. Social insurance obligations, including projected shortfalls for Social Security and Medicare, are disclosed separately in the off-balance-sheet Statement of Social Insurance (SOSI).

The 75-year unfunded obligation under that statement surged by £7.76 trillion ($10.1 trillion) in a single year, reaching £67.88 trillion ($88.4 trillion) by the end of FY 2025. A £5.30 trillion ($6.9 trillion) jump in projected Medicare Part B shortfalls accounted for the largest share of that increase, with Social Security contributing a further £1.92 trillion ($2.5 trillion).

Add the on- and off-balance-sheet obligations together and total federal commitments now exceed £104.64 trillion ($136.2 trillion), roughly five times the United States' annual economic output. The Treasury report is co-authored by the Department of the Treasury and the Office of Management and Budget (OMB), and its figures are presented under federal accounting standards set by the Federal Accounting Standards Advisory Board (FASAB).

The GAO's 29th Consecutive Disclaimer

For the 29th consecutive year, the GAO issued a disclaimer of opinion on the US government's consolidated financial statements, meaning auditors were unable to determine whether the accounts are fairly presented. Published on 19 March 2026, the report GAO-26-108073 cites three persistent impediments: serious financial management failures at the Department of Defence, an inability to properly reconcile transactions between federal agencies, and systemic weaknesses in the process for preparing the statements themselves.

The implications are significant. The GAO found that material weaknesses impair the government's ability to 'reliably report a significant portion of its assets, liabilities, costs, and other related information.' The Department of Defence has undergone full financial statement audits every year since FY 2018; each has resulted in a disclaimer.

The Small Business Administration, meanwhile, was unable to obtain any audit opinion at all for FY 2025 — extending a streak that began during the Covid-19 relief period in FY 2020. The government-wide total of reported improper payment estimates for FY 2025 stood at £142.8 billion ($186 billion), and that figure excluded estimates for certain programmes.

The GAO also declined to express an opinion on the sustainability financial statements, including the long-term fiscal projections, citing significant uncertainties, particularly around the projected reductions in Medicare cost growth.

Its Comptroller General's statement, published alongside the report, notes that the federal government 'continues to face an unsustainable long-term fiscal path' and that Congress has been advised since 2017 to develop a strategy to address it.

Interest Costs Eclipse Defence

The pace at which debt service costs are consuming the federal budget marks a structural shift in US public finances. In FY 2024, interest payments on the national debt totalled £677 billion ($881 billion), surpassing defence spending for the first time in modern history. By FY 2025, that figure had risen further to £745 billion ($970 billion), according to the Peter G. Peterson Foundation.

The Congressional Budget Office projects interest costs will cross £769 billion ($1 trillion) in FY 2026, a threshold not previously breached, before climbing to an estimated £1.38 trillion ($1.8 trillion) by 2035.

Total federal debt reached £29.2 trillion ($38 trillion) in October 2025, equivalent to approximately 100 per cent of GDP, the highest ratio recorded since 1946, according to RAND Corporation analysis.

Of the annual interest bill, nearly one quarter flows to foreign creditors, including China, rather than circulating within the domestic economy. The Committee for a Responsible Federal Budget projects that net interest payments will total £10.60 trillion ($13.8 trillion) over the decade from FY 2026 to FY 2035, which is £3.31 trillion ($4.3 trillion) more than all projected defence spending over the same period.

The Treasury's own ledger has delivered its verdict; whether Congress will act on it before the arithmetic does is the defining fiscal question of the decade.