There’s absolutely no doubt that the U.S. debt and deficit have reached dangerous levels. As a result, barring some sort of very strange black swan event, Washington will have little choice but to make major moves to tackle the problem and put several sectors at risk within the next few years. If you doubt my assertion, just look at some of the grim statistics.

According to CBS, annual federal interest payments will reach $870 billion this year, representing a 32% jump over the previous year and exceeding the huge amount that America spends on its military. Moreover, our debt-to-GDP ratio is around 123%. That puts us above most other advanced economies.

Most ominously, according to the Congressional Budget Office, Washington will continue to spend up to $20 trillion of cumulative deficits between 2025 and 2034. That would put us well on our way to the 200% of GDP-to-debt level that multiple economists say is unsustainable. So with the government poised to take measures to tackle this huge problem, these three sectors remain at risk of severe cutbacks.

Drugmakers

The only actual inflation-reduction measures included within the Inflation Reduction Act hurt drug companies. Specifically, the legislation forced these companies to ” pay rebates to Medicare when prices increase faster than the rate of inflation for certain drugs.” Additionally, the law empowered the government to pay less than prevailing prices for a small number of treatments starting in 2026 In that year, the Secretary of Health and Human Services will be able to pay less for 15 drugs. And the secretary will be able to add 15 more drugs to the list in both 2027 and 2028. The impacted treatments must be taken from a list of treatments that cost Medicare the most.

If the Democrats retain the White House, there’s a good chance that the number of drugs affected by such measures will be significantly increased. Such a move could significantly lower the share prices of the largest, most successful drug makers, such as Pfizer (NYSE:PFE), Eli Lilly (NYSE:LLY), and Merck (NYSE:MRK).

Defense Companies

The defense companies are likely to be hurt no matter who becomes president, so they are certainly one of the sectors at risk from Washington’s upcoming cost-cutting measures. President Donald Trump has vowed to make Europe pay for more of the Ukraine War, and at times he’s indicated that he wants to end the conflict altogether. Ukraine uses America’s money to buy American weapons. To the extent that it relies more on Europe to fund the war, it will likely buy less of America’s armaments. That, of course, would be negative for the major U.S. military contractors, including Lockheed Martin (NYSE:LMT), Northrop Grumman (NYSE:NOC), and General Dynamics (NYSE:GD).

Democrats historically look to save the government money by cutting defense spending. Therefore, if President Joe Biden or another Democrat is in the White House in 2025 and 2026, we’re likely to see cuts to programs that don’t affect Ukraine. And there is a great deal of room to cut defense spending.

Indeed, not only does America spend far more on its military than any other nation, but it spends more on it than the next nine countries combined. And America’s armament makers are extremely profitable, indicating that Washington could force them to meaningfully cut their prices without causing them to stop selling their products to the Pentagon. For example, Lockheed’s operating income came in at over $9 billion last year, while General Dynamics generated $3.7 billion of OI.

Senior Housing Develoeprs

Many if not most Republicans have made no secret of their desire to cut spending on Social Security. Most famously, former South Carolina Governor and presidential candidate Nikki Haley said last year that the age was “way too low.” And former House Speaker Paul Ryan, to whom many Republicans look for ideas on deficit cutting, has proposed deep cuts to the Social Security program.

Although Trump has historically said that he opposes cutting entitlements, he indicated earlier this year that he has fully embraced the GOP position on the issue. “There is a lot you can do in terms of entitlements, in terms of cutting,” the former president told CNBC in March.

If Republicans follow Haley’s suggestion and raise the Social Security age a great deal, senior housing developers could take a sizeable hit. After all, such a move would significantly cut the income of consumers who move into senior housing, lowering the amount of rent or mortgage payments that they can hand over.

Among the major owners of senior housing are Brookdale Senior Living (NYSE:BKD), Sonida Senior Living (NYSE:SNDA), and Ventas (NYSE:VTR).

On the date of publication, Larry Ramer did not hold (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines