Mar 31, 2006
Press Release

- wins unanimous approval in Budget Committee mark-up

WASHINGTON, D.C.- An amendment introduced by U.S. Rep. Jim Cooper (D-TN) in the House Budget Committee mark-up earlier this week will mean American voters may get at last a clear and fair picture of the fiscal liabilities facing our nation.

"Americans deserve to know the true and full story of our fiscal crisis," Cooper said. "If you use the same accounting methods to look at the budget that most American companies are required to use by law, you get a very different picture than what the budget shows. And it's a truly shocking picture. The deficit for last year was actually over twice what the budget reports."

Cooper's amendment passed the committee unanimously.

Cooper's amendment states that the determination of the Congressional budget and the President's budget request "should include consideration of the Financial Report of the United States Government, especially its information regarding the Government's net operating costs, financial position, and long-term liabilities."

The recently released 2005 Financial Report of the U.S. Government indicates that the budget deficit was $760 billion, over twice as large as the $319 billion stated in the President's budget.

The President's budget uses cash-basis accounting, a method used only by the smallest American companies. David Walker, the Comptroller General of the Government Accountability Office (GAO), has said a cash-basis method paints a "potentially unrealistic and misleading picture of the federal government's overall performance."

The Financial Report, issued by the Treasury Department and audited by GAO, uses accrual accounting, or GAAP (Generally Accepted Accounting Practices). Accrual accounting is the method required by law to be used by any publicly traded company in America.

"The Department of Treasury literally issued the report on Christmas Eve, without a press release," Cooper said in the hearing. "It's available on a website, but the sense of Congress resolution is that we should use this accrual accounting, GAAP accounting like every business in America has to use, not to replace our budget process but so that we give it consideration in our budget process.

"It's clearly intended by the document itself because there is a quote from (Treasury) Secretary Snow on page 4 that says, ‘As such, it (the report document) can be used with the budget as a planning and control tool not only for the current fiscal year but with a longer term focus as well.'"

In addition to Congressman Cooper, the amendment received the strong support of Budget Committee Chairman Jim Nussle (R-IA), as well as two other key Republican members of the committee.

Congressman Mike Conaway, Republican of Texas, said the amendment "makes good sense in full and fair disclosure and what we are doing to ourselves collectively in this process we call government. The total liabilities that are unfunded will scare the pants off you."

According to U.S. Rep. Chris Chocola (R-IN), "I think the Financial Report is a very valuable tool because it does present a fuller and fairer picture of the growing fiscal burdens that every American faces, especially future generations of Americans.

"We talked about the problems we face as a country fiscally but, in order to solve these problems, we have to define these problems," Rep. Chocola added, "and I think looking at our fiscal challenges on an accrual basis helps us define those in a much clearer and more transparent fashion."