Congress Fails to Account for Future Spending
Heritage Foundation has an article pointing to CongressÃ¢â‚¬â„¢s inconsistency in the accounting standards it holds private individuals and businesses and the way it must report spending and liabilities.Ã‚Â Generally Accepted Accounting Principles require companies to report financial obligations as they are occurred, even if they will not come due until in the future.Ã‚Â This includes pensions and other long term promised employee benefits.Ã‚Â Congress, however, only has to account for the cost of legislation in the first five and the first ten years.
This is conducive to massive new government spending.Ã‚Â The short time frame makes incredibly expensive bills like the new prescription drug benefit appear affordable.Ã‚Â In fact, if Congress had to follow the accounting principles it requires by law of others, the debate would have been over an $8trillion new entitlement, instead of the widely reported $0.4trillion ten year cost of the program.
With good reason, Congress prevents companies from using Ã¢â‚¬Å“houseÃ¢â‚¬Â standards like these when calculating pension and healthcare liabilities in order to protect workers.Ã‚Â Unlike companies and individuals, who by law are required to fulfill their obligations, the Supreme Court has found that Congress is not bound to fulfill any promise it makes to workers.Ã‚Â Congress has voted to cut benefits in the past to ensure solvency of programs like Social Security. Ã‚Â All this makes one wonder if legislators are truly serious about entitlement programs when they do not state the full cost of in order to avoid the question of how to fund it.Ã‚Â Certainly making a promise and then breaking it or not paying up in full is one way to go about it.