By John Haughey
When President Joe Biden submitted his $5.8 trillion Fiscal Year 2023 budget request to Congress in late March, Truth In Accounting’s (TIA) 12th annual “financial state of the union” report was just three weeks old.
But after reading Biden’s 149-page proposed budget, TIA founder and CEO Sheila Weinberg quickly realized her group’s 2022 Financial State of the Union` report was already obsolete.
In analyzing the Financial Report of the United States Government for FY22 published in February, TIA accountants and fiscal analysts calculated federal government debt to be $133 trillion, with every one of the nation’s taxpayers each shouldering an $836,000 “taxpayer burden.”
After Biden released his proposed budget, TIA’s revised its federal government debt calculation upward to $141 trillion, with each of the nation’s taxpayers now bearing a $919,000 “taxpayer burden.”
In essence, Biden’s budget request instantly imposed an $83,000 per capita federal tax increase on the nation’s taxable citizens, according to TIA.
“Folks in Washington, D.C., seem to have given up totally on the concept of fiscal responsibility,” Weinberg told The Epoch Times. “Fiscal responsibility is dead. The ‘new normal’ is $1 trillion deficits.”
But even that “new normal” is the same old smoke-and-mirrors, she said, noting the $1 trillion “deficit” as presented in the budgets is projected annual spending vs forecast revenues, not a transparent accounting of total public debt, including “unfunded liabilities” in public employee pensions and other debt obligations.
“The thing that people don’t realize,” she said, “is that the total federal government debt is $141 trillion.”
Weinberg, a Certified Public Accountant with more than 40 years of experience in government finance, founded Chicago-based TIA in 2002.
The group has carved a niche for itself among government and spending watchdogs by insisting all liabilities be included—and counted—when analyzing budgets, and then breaking down expenditures-versus-revenues to calculate “taxpayer burdens” at the federal and state levels, and 75 of the nation’s largest municipalities.
TIA’s 2021 Financial State of the States analysis was published in September and it will post its annual “Taxpayer Burden” update in May, Weinberg said.
TIA’s calculations have been frequently dismissed by government agencies and other forensics accounting experts as over-simplified.
Among criticisms, especially regarding TIA’s public employee pension and retiree benefit debt calculations, is it does not account for amortization periods incorporated into budgets.
Texas, for instance, considers pension debt “healthy” if all it “owes” can be paid off through investment returns and contributions within a 31-year period. Georgia requires a 25-year amortization period.
But Weinberg maintains this is an “accounting trick” that allows governments to accumulate debt by drafting budgets on a “cash-basis” and politicians to get elected based on undeserved fiscal acumen.
“The reason that the government doesn’t include [all liabilities] in their debt numbers is they don’t see, they don’t count, anything beyond the checks that are written” in that budget, she said, meaning “those numbers on the other side of the balance sheet” are simply excluded in annual budgets.
According to TIA’s full-ledgered account of federal government finances at the end of FY22, which was Sept. 30, 2021, the United States’ “financial condition worsened by nearly $19 trillion” with its unfunded liabilities—or, “what if all bills came due?”—topping $141 trillion.
TIA cites two main sources of this uncounted debt: $58.1 trillion in Medicare and $45.4 trillion in Social Security “promises” that “the government has not set any money aside to fund.”
The $5 trillion in pandemic relief and recovery packages adopted by Congress in 2020 and 2021 also “had a negative impact on the fiscal health of the federal government last year,” TIA states.
“Just like all the state and local governments, the federal government took on extra costs and had to borrow more money to deal with the pandemic.”
In its analysis of federal FY22 expenditures, TIA documents that $7.4 trillion was spent on health and human services, defense and veterans affairs, Social Security, education, and other expenses, including interest on the debt.
That $7.4 trillion spent is significantly more than the $4.3 trillion in revenues collected by the federal government over the year.
“The system now is unsustainable,” but elected officials in Congress are allowing it to remain so because sooner or later, fiscal reality will force decisions by default, Weinberg said.
“Right now, you have promised to pay $141 trillion and you don’t have a plan on how you will pay those benefits,” she said, which means, by default, “the plan right now is to cut benefits.
“They beat up people who propose fixing Social Security and Medicaid,” Weinberg continued, “but the plan right now is to cut benefits because the system is unsustainable and they’re not doing anything to fix it.
“In fact, they’re doubling down.”