[Congressional Record Volume 153, Number 162 (Wednesday, October 24, 2007)]
[Extensions of Remarks]
[Pages E2227-E2228]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




          INTRODUCTION OF THE TRUTH IN ACCOUNTING ACT OF 2007

                                 ______
                                 

                             HON. PAUL RYAN

                              of wisconsin

                    in the house of representatives

                      Wednesday, October 24, 2007

  Mr. RYAN of Wisconsin. Madam Speaker, I rise in support of the Truth 
in Accounting Act of 2007, which I am introducing today along with Ms. 
Bachmann, Mr. Kirk, and Mr. Cooper. I am hopeful that this bipartisan 
legislation will shed greater light on the long-term fiscal challenges 
facing our Nation and will encourage Members to take a greater interest 
in addressing our out-of-control entitlement spending. At the same 
time, I am also hopeful our approach illustrates a potential way 
forward for the Federal Accounting Standards Advisory Board (FASAB) as 
they continue to discuss different options on how to account for our 
social insurance programs in the Financial Report of the U.S. 
Government.
  This legislation, which is similar to a bill introduced last session 
by Mr. Kirk, Mr. Cooper, and Mr. Chocola, consists of three main 
components. First, it requires the Financial Report to include an 
audited calculation of the net present value of our primary social 
insurance programs, such as Medicare and Social Security, among others. 
Second, it requires the President consider this value when making a 
budget proposal to Congress and fully reveal the impact of his proposal 
on our long-term fiscal situation. Finally, it also requires the 
Secretary of Treasury and the Comptroller General of GAO to testify 
before Congress and provide their assessment of our Nation's long-term 
fiscal exposures on an annual basis. I would like to briefly discuss 
each of these components in greater detail.
  The proposal to include the net present value of the Federal 
government's fiscal exposures comes from last year's Truth in 
Accounting bill. This provision would give the American public a 
clearer picture of the dire fiscal situation that we are facing, and it 
would require the Federal government to take responsibility for 
addressing this issue. According to

[[Page E2228]]

the latest reports of the Medicare and Social Security trustees, we are 
staring at 75-year fiscal exposures of $32 trillion and $4.7 trillion 
for each of these programs, respectively. This means that the current 
level of projected revenues for these two programs is nearly $40 
trillion less than is needed to pay for our projected spending on them 
over the next 75 years. If you include the other obligations of our 
government, our overall fiscal exposures are greater than $46 trillion 
over this time period, or about $375,000 for every full-time worker in 
the U.S.
  We cannot leave this problem unaddressed. The long-term health of our 
economy is at severe risk, as are the benefits that have been promised 
to our constituents. Including this figure in the Financial Report will 
finally force the federal government to level with its citizens and 
admit the daunting fiscal challenges we face. Furthermore, highlighting 
this problem will help encourage Members of Congress to take it more 
seriously, and to work on a bipartisan basis to address it.
  I am also hopeful that this aspect of our proposal can help FASAB 
find a compromise solution to its current impasse over a new set of 
accounting standards for our social insurance programs. Earlier this 
year, FASAB released a proposal that would recognize a liability for 
Social Security and Medicare once a beneficiary had completed 40 
quarters of work in covered employment, the period of time required to 
qualify for these benefits. The liability would show up on the audited 
Statement of Net Cost and Balance Sheet contained within the Financial 
Report. This view was met with substantial controversy and FASAB is not 
expected to move forward with it.
  While I believe that FASAB's primary approach has a great deal of 
merit, I understand the critiques made against it. Opponents 
justifiably pointed out that this proposal fails to credit the 
government for the revenues that these programs are projected to 
receive over the same time period and perhaps inappropriately calls 
these commitments ``liabilities'' even though they do not represent 
contractual obligations. In addition, the primary proposal could make 
the current measure of accrual liabilities unusable since the size of 
the Social Security and Medicare components would dwarf the liabilities 
of other programs and possibly hide their own set of problems and 
concerns.
  Our proposal addresses all of these concerns. It would fully account 
for projected revenues, would use the terminology ``fiscal exposures'' 
instead of ``liabilities'' to reflect the true nature of the 
obligation, and would leave the current accrual measures untouched so 
they could still be used by policymakers. At the same time, it would 
ensure that a measure of our fiscal exposures is on the audited portion 
of the Financial Report for the first time ever. I am hopeful that this 
is the type of compromise that FASAB could accept. While it may not go 
as far as some of the board members and some Members of Congress may 
hope, I believe that it makes real, although admittedly incremental, 
progress at uncovering the true nature of our long-term obligations.
  The second component of this bill comes from an amendment Mr. Cooper 
offered during consideration of the House Budget Resolution in 2006, 
which passed the Budget Committee in a bipartisan manner. I strongly 
support this proposal and commend Mr. Cooper for his leadership on the 
matter. I am hopeful that the Budget Committee, of which I am the 
Ranking Member, will seek to permanently enact this provision. I look 
forward to working with Mr. Spratt and other distinguished Members of 
the Committee to accomplish this.
  Finally, this proposal would require the Secretary of the Treasury 
and the Comptroller General of the GAO to testify before Congress on 
our fiscal exposures. The Secretary of the Treasury would have to 
testify on the Financial Report, which is a document that far too few 
Members of Congress, let alone the public, are aware of. While Members 
such as Mr. Cooper and Mr. Kirk have done a great job in recent years 
in starting to build awareness of this document, this proposal would 
take the next important step.
  The Comptroller General would also have to report to Congress on the 
full extent of our fiscal exposures on an annual basis. This would go a 
long way toward ensuring that Members of Congress and the public start 
paying attention to these daunting figures. Our current Comptroller 
General, Mr. Walker, has fought vigorously on this matter and has done 
an excellent job of alerting people to the challenges we face. This 
would give him a regular forum in which to do so and allow him to 
continue performing an excellent service to the Nation.
  Before I close, I would like to thank the other lead cosponsors for 
allowing me to join their effort. This issue is something that Mr. 
Cooper and Mr. Kirk have worked diligently on for years and I am glad 
to be a part of the latest version of their bill. Ms. Bachmann also 
deserves immense credit for drawing on her financial background and 
striving to become a leader in Congress in this area. She was 
instrumental in putting together this legislation and ensuring the 
participation of such a strong bipartisan coalition.
  I am truly hopeful that our fiscal exposures will not continue to go 
unnoticed and that we can help build congressional support for 
entitlement reform. The challenges we face are too big to ignore. If we 
do not level with the American people about the true nature of this 
problem and seek to address it, we will be jeopardizing the economy and 
standard of living of future generations.

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