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Sec. Snow Report Says Deficit Much Worse than Previously Disclosed

The Treasury report reinforces what the Blue Dogs have been saying for years: there is a complete lack of transparency, honesty, and accountability in the budget process.  With House Republicans set to mark-up their budget next week, the Blue Dog Coalition calls for honesty, accountability and transparency in the budget, and urges Congress to adopt the Blue Dog 12-Step Plan for curing out nation’s addiction to deficit spending.  

One of the startling revelations of the 158 page report, titled “Financial Report of the United States Government 2005”, was the admission from Secretary Snow that the U.S. deficit under practical business accounting methods in 2005 was $760 billion – more than double the more widely reported $319 billion. 

“We all know that this administration prides itself on being friendly with business.  The irony is that if this country were a company, there would be a shareholder revolt.  Eliot Spitzer would be preparing indictments. The Board of Directors would be hiring outside counsel,” said Rep. Dennis Cardoza, Blue Dog Co-Chair for Communications.

“No business in America would operate the way this government is operating, with the U.S. Comptroller General saying it is impossible to get a clean audit from the books of federal agencies. No one is being held responsible and Congressional leaders are not conducting oversight hearings to find out why,” said Blue Dog leader Rep. John Tanner.  “The first thing we need to find out before finalizing a budget is how these agencies are spending the money we have already appropriated.”

In a letter contained within the report, David Walker, Comptroller General of the United States, explains that the accounting model currently used by the government “provides a potentially unrealistic and misleading picture of the federal government’s overall performance, financial condition, and future fiscal outlook.”

“The Financial Report makes it clear.  We’ve got to call for honest budgeting now.  This report, prepared by the Administration, is based on standard business accounting practices used by most American businesses --- and what does it tell us?  That the deficit is more than twice what the Administration indicated in their budget.   Forget $319 billion; Secretary Snow acknowledges here that the real number is $760 billion,” said Rep. Jim Cooper (TN), Blue Dog Co-Chair for Policy.  “It is essential that this little-known report see the light of day, and that all members of Congress join the Blue Dogs in demanding more honesty and accountability from the Administration.”      

The Financial Report explains on page 23 that of the 26 agencies scored under the president’s management agenda, 17 of them were deemed to have “any of a number of serious flaws” when it comes to financial performance.  Walker explains that we should not ignore such a significant problem and that “continuing on this unsustainable path will gradually erode, if not suddenly damage, our economy, our standard of living, and ultimately our national security.” 

“Once again we find the Administration grossly misrepresenting the truth and intentionally misleading the American public,” said Rep. Mike Ross (AR), Blue Dog Whip.  “The Treasury's annual but little known report, complete with the signature of Secretary Snow, uses real accounting practices that all American companies follow, and states that the deficit in 2005 was $760 billion, more than double the claim of the Administration.  The time to restore honesty, accountability, and transparency in our nation's fiscal house is long past due.”

The Blue Dogs are a group of 37 moderate and conservative Democrats whose commitment to fiscal discipline has won them praise from magazine and newspaper editorials around the country.  The Blue Dog Coalition has long served as the voice of reason in the budget debate.  Thursday, they again shined a bright light on the fiscal irresponsibility of this administration and demanded reforms to restore honesty, accountability and transparency to the federal budget.   

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