Final answer:
A significant number of federal government employees will be eligible to retire in the next five years, influenced by the aging baby boom generation. This will affect spending on Social Security and Medicare and may lead to increased budget deficits. Consequently, the government may need to explore options to address the fiscal challenges.
Step-by-step explanation:
Within five years, a substantial portion of the federal government's current employees will be eligible to retire. This is due in part to the aging of the baby boom generation, which reached age 65 starting in 2011. As the population over the age of 65 increases, there will be a significant demographic shift. The impact of this shift is extensive, particularly on programs like Social Security and Medicare. Both programs are a major focus for the elderly in the U.S., and the growing number of retirees will see an increase in spending on these programs. This predicament underscores the financial challenges facing the federal government, where the current payroll taxes will fall short of covering the projected expenses, leading to potential budget deficits. A decision to either increase revenue or decrease benefit levels may become necessary to manage the fiscal forecast.