Bipartisan Budget Reform Proposed by Young People Introduced in U.S. Senate
Legislation Endorsed by Ten Nobel Laureates in Economics
Washington, DC – The Can Kicks Back, a non-partisan and Millennial-led campaign to mobilize young Americans on the issue of the growing national debt, today expressed its gratitude and encouragement to Senators John Thune (R-SD) and Tim Kaine (D-VA) for introducing the INFORM Act, which would provide additional information to legislators on the impact fiscal policy decisions and changes in the economy could have on young people and future generations.
The INFORM Act (which stands for “Intergenerational Financial Obligations Reform Act”) is based on recommendations made by The Can Kicks Back in its February whitepaper, “Three Smart Steps Toward Solvency.” Senator Rob Portman (R-OH), a former director of the Office of Management and Budget, and Senator Chris Coons (D-DE) are among the first to co-sponsor. Ten Nobel Prize winning economists have endorsed the measure.
Appropriately, the bill’s introduction comes on the same day that President Obama is giving a speech on the economy that promises to chart a course for the long term.
“The federal budget is dangerously skewed toward the present, at the expense of the future,” said Nick Troiano, co-founder of The Can Kicks Back (TCKB). “Our campaign has championed the INFORM Act because it will give lawmakers additional information to help ensure that policy changes promote long-term fiscal sustainability and generational equity.”
The INFORM Act would require the Congressional Budget Office, Government Accountability Office and Office of Management and Budget to incorporate fiscal gap and generational accounting analysis in the budgeting and legislative process.
Fiscal gap analysis calculates the difference between projected government revenue and expenditures, beyond the traditional 10-year budget window. This analysis includes what changes in fiscal policy and economic growth would be needed to close the fiscal gap. Generational accounting calculates the difference between taxes paid and benefits received for each living generation and future generations, to evaluate the liabilities transferred from one generation to the next.
The latest generational accounting analysis completed by the International Monetary Fund in 2011 indicated that if fiscal policy is not adjusted soon, future Americans may face net tax rates up to 21.5 percentage points higher than today.
“The trajectory of our federal budget is not just fiscally irresponsible – it is morally reprehensible,” said David M. Walker, former U.S. Comptroller General and TCKB Advisor. “The INFORM Act will increase both government transparency and accountability.”
Generational accounting was first developed in the early 1990’s and was used by the Office of Management and Budget under the first Bush and Clinton administrations. More than two-dozen countries have since used it worldwide.
“For too long, politicians in Washington have masked the true size and consequences of our fiscal imbalance by focusing on the official deficit, which hides the accumulation of massive off-the-books obligations,” said economist Laurence Kotlikoff, a professor at Boston University who pioneered generational accounting. “The INFORM Act will provide an economically valid measure of our nation's enormous long-term fiscal gap and show its dire implications for our children.”
The Can Kicks Back is a non-partisan, Millennial-driven campaign to fix the national debt and reclaim our American Dream. More information is available at www.TheCanKicksBack.org/informact.