Economy & Budget

It’s time for a full accounting of Washington’s finances

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When Donald Trump assumes the presidency on Jan. 20, he will be in control of the largest economy in the world, but he will soon find out that the United States federal government is operating under reporting standards that are much looser than he is used to. It’s time for a full accounting of Washington’s finances.

While his businesses—and corporations throughout the country—are required to publish timely and accurate financial information, the federal government has not been able to do the same and the data they do publish is largely inaccurate.

{mosads}The Government Accountability Office (GAO) has tried, for the last 19 years, to audit the federal government as required by law. But time after time, its efforts to produce a comprehensive audit have been hampered by misleading accounting at the Department of Defense, the Department of Homeland Security and other executive departments.

As a result, the American public lacks a clear picture of the nation’s true financial assets and obligations. Are future taxpayers going to be on the hook for unfunded benefits that the government has promised to pay out? We have no way of knowing.

To make matters worse, the budget and national debt figures the federal government publishes do not tell the entire story. The Treasury Department uses accounting gimmicks to hide tens of trillions of dollars in Social Security and Medicare liabilities from the balance sheet by essentially maintaining two sets of books that contain contradictory data: one for the budget decision-making process and one for entitlement programs.

This allows government officials to report that the debt is $19 trillion while leaving out future promised payments people are counting on. When you add up all the payments promised by the federal government including the unfunded entitlements, the national debt rises to $87 trillion. To put this amount in perspective, every person in the United States would have to pay $272,000 for the federal government to be debt-free.

This type of behavior in the private sector would be compared to Enron’s accounting or a Ponzi scheme. President-elect Trump wouldn’t put up with these practices in one of his businesses and I hope that he doesn’t permit them to continue when he manages the largest financial institution in the world: the United States federal government.

I founded Truth in Accounting 14 years ago with the goal of compelling federal, state and local governments to produce accounting data that is timely, truthful and transparent. This information is critical for American citizens. Think about how risky it would be to buy stock in a company that didn’t publish accurate financials or how foolish it would be to give a child your credit card and not once look at the charges as they are accrued.

This is exactly what happens when taxpayers do not have accurate information and when elected officials continue to accept flawed federal accounting practices. I am calling on President-elect Trump to prioritize due diligence and responsible accounting reform during his first term in office.

If he wants to make good on his promises to clean-up government finances, the very first step is to ask Treasury Secretary nominee Steven Mnuchin to work with the GAO and produce an honest audit of our government’s finances, including Social Security and Medicare liabilities. His team must then work with congressional leaders to use this new, accurate data when making decisions about appropriations bills and raising the debt ceiling.

Every American will benefit from a government that operates under the same financial transparency standards and regulations enforced upon publicly traded companies. In the same way that chief executive officers at those companies have a fiduciary responsibility to their stakeholders, Trump will have the same responsibility to taxpayers as president to deliver honest and transparent financial data.

Sheila Weinberg, CPA, is the founder and chief executive officer of Truth in Accounting, a 501(c)(3) nonprofit organization based in Chicago that researches government financial data and promotes transparency for a better-informed citizenry.

The views of Contributors are their own and are not the views of The Hill.

Tags accounting Donald Trump Donald Trump Federal Debt Government taxpayers Washington

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