Administration Challenged to Certify the Accuracy of the Government's Books by August 14th.
hollings.senate.gov
Hollings Requests that OMB Director Daniels Certify Accuracy of Government's Financial Reports
Corporate leaders asked to attest to accuracy of financials, government should do same, Hollings says
WASHINGTON, D.C. – Today, U.S. Sen. Fritz Hollings sent a letter to the Bush Administration's Office of Budget and Management Director Mitch Daniels asking that he abide by the same requirements the Administration recently imposed on the CEOs of 947 companies and file a sworn statement attesting to the accuracy and completeness of the government's financial books. The letter requests that the Administration be clear and forthcoming with its accounting and sign this statement by August 14th, the same deadline it gave corporate America to file their financial certifications with the Securities and Exchange Commission (SEC).
In the letter, Sen. Hollings points to the multiple sets of figures that the Administration uses in its Mid-Session Review to calculate the budget deficit. Like Enron, the Administration highlights the number that casts the country in a more favorable financial situation – a $165 billion figure that appears on page one. On page 44, however, the government deficit is shown to be $322 billion for fiscal year 2002. Not until the last page of the review, page 60, do readers find the actual deficit of $412 billion for fiscal year 2002.
"The $412 billion is the true deficit, as it takes into account all government borrowing from the trust funds for Social Security, Medicare, military retirees, civil service retirees and highways," the letter reads. "This bookkeeping is misleading. The government appears to be keeping multiple sets of books, the problem that did in Enron and other companies."
As Sen. Hollings points out, the government only achieves the $165 billion deficit figure by spending fiscal year 2002 surpluses in the nation's trust funds: $157 billion from the Social Security trust fund and another $90 billion total from the rest of the government's trust funds, including Medicare, military retirement, civilian retirement and others. If the government did not employ accounting gimmicks that utilize surpluses from one account to mask ballooning deficits in another, it would report one deficit number – the true $412 billion deficit for fiscal year 2002.
"In the Army, I learned you never ask your troops to do something you would not," Sen. Hollings wrote. "As the government takes the unprecedented step to ask corporate leaders across the country to personally certify their books, I think those in the highest leadership positions of government should do the same for America's books. If we want to truly calm the market and investors, it's time our nation's books come clean."
Sen. Hollings has a long history of advocating for fiscal responsibility and the elimination of the nation's debt. While politicians and media commentators trumpeted "surpluses" in recent years, Sen. Hollings disputed these reports and demanded honesty in federal government accounting. He still contends that the politically popular "surplus" was achieved only by using bogus accounting gimmicks in an effort to cover budget deficits and create a more favorable financial picture.
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