CHICAGO-AREA GROUP QUESTIONS ACCOUNTING STANDARDS OF BUSH BUDGET; "MAKES NO SENSE," FOUNDER SAYS
Institute for Truth in Accounting challenges federal 2009 budget and calls for improved accounting standards on the national level
Chicago - Today, the Institute for Truth in Accounting, a Chicago-based group, questioned the accounting methods used in President Bush's 2009 federal budget-a budget that claims to put the federal government on a path to balanced budgets, despite wide evidence to the contrary.
"This is financial voodoo at its best," said Sheila Weinberg, founder and CEO of the Institute for Truth in Accounting. "How can you project surpluses when the government's debt is projected to increase at record levels? Why would you need to borrow money if you have extra funds in the form of surpluses? In real-world accounting, this makes no sense."
The President's budget projects surpluses of $48 billion and $29 billion in 2012 and 2013. The same document indicates that the government debt will increase by $413 billion and $410 billion in those years. "This is the same kind of fuzzy math the Clinton administration used to claim balanced budgets," Weinberg added. Balanced budgets were reached then, and are projected now, by the government taking money that was supposed to be set aside for future Social Security and Medicare benefits-and recording this money as current revenue. At the same time, government bookkeeping entries increased the trust funds' assets and increased the debt owed to trust funds.
"If any private citizen or corporation tried to pull this off, they would be either bankrupt or in jail," Weinberg added. "The government needs to stop using budgeting tricks to mislead the public. This is dishonest and makes it impossible for citizens to be informed participants in decisions that will impact our country's and people's financial futures."
The Institute for Truth in Accounting proposes two options for better government accounting. If the government is going to use the "Social Security and Medicare withholdings" for other purposes, as it does now, then these amounts can be recorded as current income. In this case, the public needs to be told that the government does not owe this money back to the people in the form of future benefits and that there is no money saved in trust funds. Option two is for the government not to use "Social Security and Medicare withholding" for other purposes. Then these amounts could be recorded as increases to the trust funds. But the government can't do both at the same time.
"Nowhere in the President's budget does he mention the government's true debt of more than $54 trillion, which includes the promises owed to our veterans and seniors," Weinberg said. "In 2007, these and other accrued costs increased the budget deficit from the reported amount of $162 billion to an accrued deficit amount of $275 billion-and if the Social Security and Medicare promises and related interest were included in the calculation, the deficit amount would have been $1,204 billion or $1.2 trillion."
"Our goal is to bring accurate numbers into the public sphere, and particularly into the public debate in this election year, " Weinberg added. "Our nation faces profound fiscal challenges, and they need to be addressed now. They can no longer be swept under the rug by deceptive budget practices."
For this reason the Institute for Truth in Accounting is sponsoring the Truth in 2008 campaign-to bring awareness to our nation's pressing financial issues. For more information, contact Sheila Weinberg at 847-835-5200 or visit www.truthin2008.org.
About the Institute for Truth in Accounting
The Institute for Truth in Accounting (IFTA) is dedicated to promoting honest, accurate, and transparent accounting at all levels of government. As a non-partisan, non-profit organization, the IFTA works to expose accounting deficiencies while promoting better, more accessible delivery of accurate government financial data-and, in turn, providing a foundation for more informed public policy. The IFTA provides its expertise to develop more effective accounting standards and deliver accurate government financial information to policymakers, opinion leaders, and citizens so that they can work for a more secure financial future. To learn more, please visit our website at www.truthinaccounting.org.