Rep. Scott Garrett (R-NJ), senior Member of the House Budget Committee, reintroduced the Budget and Accounting Transparency Act as part of a comprehensive set of reforms that strengthen spending controls, enhance oversight of government spending and bring honest accounting to Washington's broken budget process. These reforms build on the House-passed Path to Prosperity and is the latest instance of House Republicans working to address our spending-driven debt crisis and bringing accountability and transparency back to the federal government's budget process.
Rep. Garrett made the following statement after reintroducing the Budget and Accounting Transparency Act:
"Our federal budget process is broken, and it also grossly distorts the breadth and scope of our spending-driven debt crisis by failing to report all of the costs incurred by the federal government. How can we expect to confront our exploding debt if we can't accurately account for all of the taxpayer liabilities already on the books? We need to be honest with ourselves and the American people and bring all of our existing commitments into the light of day.
"The Budget and Accounting Transparency Act would recognize the budgetary impact of the government-sponsored enterprises (GSEs) Fannie Mae and Freddie Mac by formally bringing the housing giants on-budget and requiring their debt issuance be included in the calculation of the federal debt. This legislation would also ensure that our accounting methods truly account for the risk of government credit programs. We need to bring undocumented taxpayer liabilities out from the shadows to accurately reflect the depth of our country's financial troubles. We can't get our economy back on track until we know what's holding us down."
Rep. Paul Ryan, Chairman of the House Budget Committee, made the following statement after Rep. Garrett introduced the Budget and Accounting Transparency Act:
"I thank Congressman Garrett for introducing the Budget and Accounting Transparency Act. It takes a good step toward a full account of the costs of federal programs, which our families deserve."
The Budget and Accounting Transparency Act would:
-Require fair-value accounting for federal credit programs. The executive branch and Congress would be required to use "fair-value" accounting in calculating the costs of federal credit programs. "Fair-value" accounts for the borrowing costs of the federal government and the costs of the market risk the federal government is incurring by issuing a loan or loan guarantee or by making an investment in a private entity. This reform would bring federal budgeting in line with private-sector accounting practices.
-Bring Fannie Mae and Freddie Mac on-budget to identify the budgetary impact of these housing-related government-sponsored enterprises. New debt issuances of these GSEs would be included in the calculation of the federal debt. Since the financial crisis, these enterprises have become the explicit financial responsibility of the federal government. Accordingly, these reforms would ensure that the budgetary implications of that fact are reflected in the federal budget.
-Study the impact of extending fair-value accounting to federal insurance programs. This reform would require the CBO and OMB to conduct a study on the impact of extending this fair-value methodology to federal insurance programs, which are currently accounted for on a cash-flow basis.
-Require CBO and OMB to conduct a study on the use of budgetary terms related to money collected by the federal government, which has become jumbled and inconsistent over the decades.
-Require that agencies make public the budgetary justification materials prepared in support of their request for use of taxpayer dollars.