Today, Congressman Marlin Stutzman (IN-03) issued the following statement after the House passed The Budget and Accounting Transparency Act of 2011:
"Hoosiers understand that we have to force Washington to kick the spending habit," said Stutzman. "Unfortunately, Washington isn't giving an accurate picture of our financial troubles. Right now, the federal government considers the borrowing costs of its programs but not the cost of the risk that it incurs by issuing or guaranteeing loans and making investments. The truth is that these are real liabilities with real consequences. Like we saw with Solyndra, taxpayers foot the bill when Washington makes bad bets. By requiring the federal government to adopt the private sector's fair-value accounting practices, taxpayers will have a more complete picture of Washington's commitments. This bill will give us a brutally honest assessment of our country's finances and provide transparency to prevent future excess."
The Budget and Accounting Transparency Act of 2011 establishes fair-value accounting for all federal programs that make direct loans or guarantee loans. Non-partisan estimates show that, by failing to account for market risk, current accounting practices underestimate costs by some $55 billion a year. The legislation also brings the government sponsored enterprises, Fannie Mae and Freddie Mac, onto the budget.
The bill, co-sponsored by Mr. Stutzman, is part of the House Budget Committee's comprehensive set of budget reforms to strengthen spending controls, enhance oversight of government spending, and bring honest accounting to Washington's broken budget process.