As more 2016 candidates announce their presidential bids, they’ll start discussing issues Americans care about the most. But there’s one issue where neither Democrats nor Republicans are telling the truth due to inaccurate financial reporting — our national debt.
The government reports $18 trillion in debt, but fails to include all liabilities and retirement debt. When this debt is included, our national debt is more than $80 trillion. As a CPA with more than 30 years of experience in the field, I find it troubling that the fiscal health of our country has suffered as a result of inaccurate government accounting.
At Truth in Accounting, we are dedicated to educating and empowering citizens with understandable, reliable and transparent government financial information. That’s why we began the Federal Project — a monthly series where we explore different aspects of the federal government and national debt. This month, we analyzed the government’s financials and created a mock credit card statement to demonstrate how inaccurate government accounting is damaging our nation’s fiscal health.
Instead of following the rules used by corporations, the government holds itself to its own standards and rules. It does not account for long-term costs, and excludes $27.9 trillion in Social Security benefits promised to seniors and $35.2 trillion in Medicare promised to families and individuals from its financials.
Imagine applying for a credit card and not reporting your car payments or student loan debt. That would not be allowed. Citizens are required to report all debt when applying for a loan, mortgage, etc. Unfortunately, the government does not feel it needs to disclose this information.
In 2013, the federal government reached its credit card limit, the debt ceiling. Even though Congress wanted to expand our nation’s credit limit, Congress could not reach a consensus. As a result, the federal government shut down; federal employees had to work without pay and some federal employees had leave without pay.
Ironically, budget resolutions can be passed without increasing the debt limit. In other words, budget resolutions do not consider if the government has enough money to for the spending included or if it will have to borrow. So, during the 2013 debt ceiling debates, Democrats and Republicans were really arguing over past-spending decisions, not current or future spending decisions.
Recently, Reps. John Carney, D-Del., and James B. Renacci, R-Ohio, along with original co-sponsors Reps. Mike Quigley, D-Ill.; Kathleen Rice, D-N.Y.; and Daniel Webster, R-Fla., introduced common-sense legislation that Democrats and Republicans should get behind. Not only does this new legislation — HR 2498, the Budget Integrity Act — represent a positive step toward fiscal transparency, but it also highlights the effectiveness of bipartisanship.
I commend these representatives and the Bipartisan Working Group for striving toward greater fiscal transparency for the American public.
In regards to the introduction of HR 2498, Quigley said, “If we want to get serious about addressing our unsustainable debt and deficits, then we need a budget process that forces Congress to take a long-term view of the fiscal impact of our decisions.”
I could not agree more, but I would also add that the time to get serious about the financial state of the United States is now.
With some off-year elections coming up this November and the 2016 primaries quickly approaching, citizens need accurate government financial information to make informed decisions at the polls. For too long, Congress has made decisions with long-term impact using short-term financial information, and American taxpayers should not have to do the same.
Sheila Weinberg is the founder and CEO of Truth in Accounting and a certified public accountant.