Budget Deficit For Federal Benefits Programs At $45T, Audit Finds

Main Category: Public Health
Article Date: 19 Dec 2007 - 7:00 PDT

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The U.S. government's current funding deficit for Social Security, Medicare and other benefits programs is $45 trillion over 75 years, according to the Bush administration's "Financial Report of the United States Government" for 2006 released Monday, the AP/Houston Chronicle reports. The report, which was prepared by the U.S. Treasury Department and the Office of Management and Budget, said the deficit increased by close to $1 trillion in one year. It has risen 67.8% since 2003, when the shortfall was estimated at $26.9 trillion.

The report also said that the federal deficit for fiscal year 2007 would have been 69% higher than the $162.8 billion reported two months ago if the government had employed the same accounting methods as private companies. Those methods, under which expenses are reported when they are incurred rather than when they are paid, would have led to a $275.5 billion deficit at the end of the fiscal year on Sept. 30, according to the report.

Comments
Lawmakers said that in light of the impending retirement of members of the baby boomer generation, the problem could escalate if efforts to reform entitlement programs are delayed. Senate Budget Committee ranking member Judd Gregg (R-N.H.) said, "The longer we delay action on the issue of entitlement reform, the more difficult the solution will become."

Rep. Jim Cooper (D-Tenn.) in a statement said, "If we don't take action now, it threatens to destroy our social safety net and ruin our economic prosperity." He said the new report shows the need for legislation he is supporting that would create a bipartisan commission to issue recommendations on changes to entitlement programs (Crutsinger, AP/Houston Chronicle, 12/17).

GAO Response
The Government Accountability Office said the federal government for 11 consecutive years has failed on its own financial audit, CongressDaily reports. GAO said it could not express an opinion on the report, largely due to the Department of Defense's financial management problems, according to CongressDaily (Friedman, CongressDaily, 12/17).

Comptroller General David Walker said, "Our government has made a whole lot of promises in the long term that it cannot possibly keep" (AP/Houston Chronicle, 12/17). In a speech at the National Press Club, Walker said, "If the federal government was a private corporation and the same report came out this morning, our stock would be dropping and there would be talk about whether the company's management and directors needed a major shake-up" (CongressDaily, 12/17).

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