The Washington Free Beacon's Ali Meyer reported last week on the General Accountability Office's (GAO) release of their annual review of the federal government's financial statements, and included testimony by the Comptroller General, Gene Dodaro, before the Senate Budget Committee.
Her report included the following"
“We’re very heavily leveraged in debt,” Dodaro said. “The historical average post-World War II of how much debt we held as a percent of gross domestic product was 43 percent on average; right now we’re at 74 percent.”
"Dodaro says that under current law, debt held by the public will hit a historic high.
"The highest in the United States government’s history of debt held by the public as a percent of gross domestic product was 1946, right after World War II,” he said. “We’re on mark to hit that in the next 15 to 25 years.”
"Another economic projection which assumes that cost controls for Medicare don’t hold and that healthcare costs continue to increase, shows debt rising even further.
“These projections go to 200, 300 percent, and even higher of debt held by the public as a percent of gross domestic product,” said Dodaro. “We’re going to owe more than our entire economy is producing and by definition this is not sustainable.”
"Additionally, the audit found fault with the number of improper payments that should not have been made or were the incorrect amount. The audit found that in fiscal year 2015 there were $136.7 billion improper payments, which was up by $12 billion from the year prior." (emphasis added)
Meyer also reported on the reliability of the government's financial statement, writing:
"The audit also called into question the reliability of the government’s financial statements. According to the report, if a federal entity purchases a good or service, that cost should match the revenue recorded by the federal entity that sold the good or service. The report found that this was not always the case and found hundreds of billions of dollars in differences between transactions between federal entities."
You can access GAO's report, entitled, "FISCAL YEAR 2015 U.S. GOVERNMENT FINANCIAL STATEMENTS: Need to Address the Government's Remaining Financial Management Challenges and Long-Term Fiscal Path," here (both the 1-Page Highlights and 45-Page Full Report). This GAO report is primarily the Comptroller General's written testimony to the Senate Budget Committee.
The Comptroller General's formal report was transmitted to President Obama, President of the Senate, and the Speaker of the House of Representatives on February 25, 2016, and included the "U.S. Government's Fiscal Years 2015 and 2014 Consolidated Financial Statements," a 286-page document (GAO-16-357R).
The consolidated financial statements and the transmittal letter are linked from a CNS News' March 3, 2016 report. Barbara Hollingsworth. ended the CNS News story with a surreal exchange:
“I wouldn’t use the word ‘technical insolvency’,” said Robert Dacey, GAO’s chief accountant, when CNSNews.com asked him whether the federal government was technically insolvent because its liabilities were seven times larger than its assets and its “total net position” was $18.2 trillion in the red.
“Negative net position isn’t normal, but the federal government still has the ability to tax, and there are a lot of other resources [i.e. national parks] that are not recorded” on its consolidated financial statement, he told CNSNews.com.
'However, Dacey agreed with the comptroller general that the current financial condition of the federal government is unsustainable over the long term.
“We tried to illustrate the long-term fiscal situation” in the audit report, he told CNSNews.com. “Over the long-term, receipts are not enough to cover expenses.”
After reading that exchange, Rick Moran's conclusion in an American Thinker blog post on April 8, 2016, seems more than correct:
"Unmanageable, unsustainable, unreal – choose your adjective, because they all describe our debt. In the near future, that debt will inevitably lead to an economic disaster. And as long as the voices that say the debt doesn't matter, or the situation isn't that dire, continue to be heard in Washington, very little will be done to save us from catastrophe."
There is little reporting on the GAO report by the mainstream media's newspapers, according to a Google search. However, we did find several items in what some call the alternative media.
Bloomberg BNA did report on the release of the federal government's annual financial report, including this lede:
"The head of the government's main internal watchdog agency said the Pentagon's inability to clean up its books and account for its property remains a major reason the federal government cannot pass an audit."
Bloomberg BNA's Jonathan Nicholson also wrote:
"Even though the GAO could not express an opinion about the accuracy of the financial report, Dodaro said it showed the government's budget path was still unsustainable in the long run. To keep the debt in proportion to the U.S. economy stable over 75 years, he said, revenue would have to be increased by 35 percent annually or spending cut by 26 percent on the same basis."
In case you need to stop for some lighter reading, the blog Going Concern provides a humorous take
on the the GAO report and the consolidated statements.
Back on February 29, 2016, the Daily Caller News Foundation's Katie Watson also reported on the transmittal letter and consolidated financial statements, and included remarks by Sheila Weinberg, founder and CEO of Truth in Accounting, "a nonprofit organization that analyzes state and federal government books," including:
"Weinberg told The Daily Caller News Foundation it’s “unfathomable” the government gets away with flunking audits every year.“The federal government is the largest financial organization in the world, so you hope that it would be the leader in having its books clean and not flunking its audits,” she told TheDCNF."
Unfortunately, even Capitol Hill's newspaper, The Hill, gave the GAO report short shrift.
In a separate, but related story, the Washington Examiner's Joel Gehrke reported on another Senate committee hearing last week, noting:
"Senate Democrats on Wednesday couldn't agree that federal debt is a national security problem, in a hearing aimed at assessing the long-term strategic implications of the government's $19 trillion debt.
"A realistic discussion about it, and accepting expert opinion that this debt that we have is not actually right now a threat to our country, is I think a more realistic and honorable way of talking to the American people about it," Sen. Ed Markey, D-Mass., said during a Senate Foreign Relations Committee hearing on Wednesday.
"That surprised committee chairman Bob Corker, who concluded the hearing by describing such views as "crackpot," and repeatedly said he expected the panel to demonstrate consensus about the need to limit the debt. Markey also insisted that Republicans drop their interest in changing entitlement programs as they try to mitigate the projected federal debt.
"Budget hawks long have warned about a brewing debt crisis, a concern that gained currency in military circles in recent years. "I've said many times that I believe the single, biggest threat to our national security is our debt, so I also believe we have every responsibility to help eliminate that threat," Navy Adm. Mike Mullen, then-chairman of the Joint Chiefs of Staff, said in 2011.
"Markey suggested that nuclear weapons represent one of the top targets for such debt reduction. "There's a proposal to [spend] $1 trillion of new nuclear weapon systems in our country over the next 20 years," he said. 'That's a crazy number from my perspective.'"
But the Examiner's Gehrke also reported:
"Not all Democrats agreed with Markey's views.
"I don't want you to leave with the impression that the Democratic side of this committee is insensitive to the deficit. We're not," said Maryland Sen. Ben Cardin, the ranking Democrat on the panel. "I think Democrats are very concerned that there be adequate revenues in order to be able to make the investments that we think are important for the growth of our nation."
"I think Republicans are very concerned that we don't hide the costs of spending, particularly on mandatory spending, and that we have a reasonable foreseeable, affordable programs in the future," Cardin added. "And I think we can listen to each other and learn from each other and pass a blueprint that would not only provide for the economic growth of our country but deal with the security issues ... large uncontrollable debt can compromise America's security, no question about it."
So, is it any wonder that Congress's poll ratings are so low?
Growls readers outraged by the failure of Congress to ensure proper financial accounting, bring spending under control, and begin lowering the national debt are urged to write their member(s) of Congress. You can find contact information at the Library of Congress' Thomas website (use left-hand column). Here are Arlington County's members of Congress:
- Senator Mark Warner (D) - write to him or call (202) 224-2023
- Senator Tim Kaine (D) -- write to him or call (202) 224-4024
- Representative Don Beyer (D) -- write to him or call (202) 225-4376
Remember to ask for a written response, and tell them ACTA sent you.