The U.S. government is insolvent. That\u2019s not hyperbole \u2014 it\u2019s the conclusion drawn directly from the Treasury Department\u2019s own consolidated financial statements for fiscal year 2025, released last week to near-total media silence. The numbers: $6.06 trillion in total assets against $47.78 trillion in total liabilities as of September 30, 2025.<\/p>\n
Importantly, the $47.78 trillion in reported liabilities does not include the unfunded obligations of social insurance programs like Social Security and Medicare \u2014 those are disclosed separately in the off-balance-sheet Statement of Social Insurance (SOSI).<\/p>\n
The government\u2019s consolidated balance sheet position, excluding the SOSI, deteriorated by nearly $2.07 trillion between FY 2024 and FY 2025, reaching a staggering negative $41.72 trillion. Total liabilities are now nearly eight times the value of reported assets. The largest drivers were a $2 trillion increase in federal debt and interest payable (now $30.33 trillion) and a $438.8 billion increase in federal employee and veteran benefits payable (now $15.47 trillion).<\/p>\n
The off-balance-sheet picture is even more alarming.\u00a0The 75-year unfunded social insurance obligation surged by $10.1 trillion in a single year, rising from $78.3 trillion in FY 2024 to $88.4 trillion in FY 2025 \u2014 driven primarily by a $6.9 trillion jump in projected Medicare Part B shortfalls and a $2.5 trillion increase for Social Security. The Treasury\u2019s Statement of Long-Term Fiscal Projections shows the 75-year fiscal gap widening from 4.3% of GDP in FY 2024 to 4.7% in FY 2025.<\/p>\n
If the $88.4 trillion in 75-year off-balance-sheet obligations were added to the $47.8 trillion in official balance sheet liabilities, total federal obligations would now exceed\u00a0$136.2 trillion\u00a0\u2014\u00a0roughly five times U.S. annual GDP.<\/p>\n
The Government Accountability Office (GAO) issued a disclaimer of opinion on the U.S. government\u2019s FY 2025 financial statements \u2014 the 29th consecutive year it has been unable to determine whether the statements are fairly presented.\u00a0This is primarily due to serious, ongoing financial management problems at the Department of Defense and weaknesses in accounting for interagency transactions.<\/p>\n
Not only has the financial press ignored the consolidated financial statements, but most members of Congress and members of the general public will not read the consolidated financial statements. Documents like the consolidated financial statements are not the kind of thing you want to read before driving. If that\u2019s not bad enough, most people cannot relate to the trillion-dollar numbers in the financial statements. Therefore, it is appropriate to translate them into terms that people will understand.<\/p>\n
Story Continues <\/p>\n
Most people cannot relate to trillion-dollar figures on a government ledger. So consider this: divide every number by 100 million \u2014 drop eight zeros \u2014 and federal finances look like a household budget in freefall.<\/p>\n
That household earns $52,446 and spends $73,378 \u2014 running a $20,932 annual deficit. Its total liabilities and unfunded promises amount to $1,361,788 against just $60,554 in assets, leaving it $1.3 million in the hole. Uncle Sam, by any accounting standard, is insolvent.<\/p>\n
Congress has clearly lost control of the nation\u2019s finances. America is facing a fiscal catastrophe. The reckoning, long deferred, is becoming impossible to ignore.<\/p>\n
Addressing this crisis \u2014 and preventing recurrence \u2014 requires two specific legislative actions.<\/p>\n
First, Congress should pass the bipartisan\u00a0H.R. 3289 \u2014 Fiscal Commission Act, sponsored by Rep. Bill Huizenga (R-MI), Rep. Scott Peters (D-CA), and 41 co-sponsors.\u00a0Such a commission would force a public reckoning with the facts, the trade-offs, and the hard choices that restoring fiscal health requires.<\/p>\n
Second, Congress should call an Article V Convention limited to proposing a fiscal responsibility amendment to the U.S. Constitution. H.Con.Res. 15, sponsored by Rep. Jodey Arrington (R-TX), would do exactly that.<\/p>\n
Modeled on Switzerland\u2019s Debt Brake, such an amendment would mandate a balanced budget over the business cycle and prohibit federal spending from growing faster than the U.S. economy.<\/p>\n
These two bills represent the most credible path forward \u2014 if Congress has the will to act.<\/p>\n
The opinions expressed in Fortune.com commentary pieces are solely the views of their authors and do not necessarily reflect the opinions and beliefs of Fortune.<\/p>\n