Congressman Jim Cooper: Budget Changes Needed for Federal Deficit

Democratic Congressman Jim Cooper is a realist, and he wants the U.S. government to get real and give the voters a reality check.

Cooper says the Congress hasn't been truthful with the American people about the actual size of the federal deficit. The problem, says Cooper, is that the government isn't taking into consideration its rather massive future obligations when planning annual budgets. In short, federal accounting procedures are misleading.

"What is going on in the federal government needs to be brought out in the open so taxpayers know the truth about the federal deficit," Cooper said. "The federal government is keeping two sets of books but they only want taxpayers to see one of them. I think it is time to make the government budget the same way they make American businesses operate."

What Cooper wants us to know is that the President's budget, and the subsequent Congressional budget, is based on cash accounting which ignores future commitments to retirees, the sick and the disabled.

But the "Financial Report of the United States," issued by the Department of the Treasury, uses accrual-basis accounting. And under federal law, accrual accounting is required of all businesses with revenues of $5 million or more. This method considers future obligations and presents a clearer, more reliable picture of a company's - or the government's - financial liabilities.

So what's the difference in real terms? Rather massive.

According to the Budget, the deficit was $319 billion in 2005. Meanwhile, the Financial Report says it was $760 billion, or more than twice as large.

That raises some rather obvious questions. Why is this allowed to continue, and why don't we know more about
it?

Unlike the Federal Budget, which is widely distributed to every member of Congress and the media when it is released by the President, the Financial Report is virtually hidden. It is distributed to fewer than 20 members of Congress and is released in the midst of the Christmas holiday season with no accompanying press release or media announcement.