Federal Government Pursues its Own Accounting Tricks
July 16, 2002
If the government kept its books the way companies are supposed to, the bottom line would look far worse than it already does, experts note.
The Office of Management and Budget has just admitted that the deficit for the current fiscal year is going to be more than 50 percent bigger than previously acknowledged -- $165 billion, instead of $106 billion optimistically claimed just five months ago.
- Last year's $127 billion surplus should actually have been a $515 billion deficit -- because the government doesn't book expenses as they are incurred, as businesses are supposed to do, but when payment is actually made.
- For example, Congress wouldn't have been able to hide a $389 billion dollar boost in military retirees' health benefits or other expenses approved last year just because the payments were not made immediately.
- Since 1998, administrations have compiled a little-noticed alternative report that tries to reconcile government spending using real-world accounting standards.
- But the General Accounting Office says the bookkeeping is still too shoddy to get an auditor's seal of approval.
The 2001 report shows $17.3 billion in money that simply couldn't be accounted for. That alone is more than the annual revenues of all but the biggest U.S. corporations.
And that doesn't include the future liabilities of the Social Security program -- the government's biggest unfunded function.
Source: Editorial, "Washington Masks Deficits Using Accounting Tricks," USA Today, July 16, 2002.
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