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Thursday, March 02, 2006
Treasury Department Reports Deficit on an Accrual Basis
The Treasury Department sent a report to Congress in December, reporting the FY05 federal deficit on an accrual basis as being $760 billion, a far higher number than $319 billion, which is what is generally accepted as the deficit level for FY05.
The $319 billion number uses the government's accepted barometer of cash outlays versus revenues, while the $760 billion number takes into account accrued benefits owed to veterans and federal employees. Rep. Jim Cooper (D-TN), a member of the Blue Dog Coalition, said:
"Businesses are required by law to use accrual accounting. If you want Congress to be run like a business, you need accrual accounting."
This Treasury report is garnering increasing attention from lawmakers who are worried about the nation's budget books, and there was a hearing yesterday about the matter. GAO Comptroller David Walker said the $760 billion net figure as well as the $8 trillion debt through the end of FY05 left out the costs of unfunded Social Security, Medicare, veterans' and other liabilities. He said:
"Given these and other factors, a fundamental re-examination of major spending programs, tax policies and government priorities will be important and necessary to put us on a prudent and sustainable fiscal path. This will likely require a national discussion about what Americans want from their government and how much they are willing to pay for those things."
Posted by Becky Lewis
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